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CMS Price Transparency Audit- What Hospitals Need To Know?

Growing healthcare costs have long been a burden on the United States. Even consumers, employers, and providers bear this burden. But, besides all this, the healthcare charges or fees of services are still not clear or comparable. nnDue to the increase in the regulatory requirements and primary focus on improving overall price transparency of hospital charges and out-of-pocket costs for patients, CMS and different private insurance companies had pushed the healthcare providers to show all the information that includes the cost and values of all the services. nnYes, we talk about the Price Transparency final rule. CMS had done their price transparency audit in January 2021, in which hospitals and health systems are required to meet the terms of the Hospital Price Transparency requirements. nnFor hospitals that didn’t do compliance, CMS takes a corrective action plan or imposes a Civil Monetary penalty of $300 per day and publicizes their penalty on the CMS website. n

Background History

nIn 2010, the Affordable Care Act first introduced the concept of publicizing standard charges for items and services provided by a hospital. From then on, the federal government has taken a harder decision on what hospitals would have to publish, where they would be published, and how compliance would be checked and imposed. nnAs healthcare costs have been increased that forced different entities to establish policies and strategies for cost control. In June 2019, the president signed their first order directed to the Department of Health and Human Services to develop rules which require hospitals to publish consumer-friendly format prices. Which reflects what people actually pay for the services. n

What Is Required?

nEach hospital that is operating in the United States is required to provide clear and accessible pricing information online about the items and services they provide in two ways:n


  • Comprehensive machine-readable file with all items and services that discloses five types of standard charges including gross charges includes descriptions of each item or service; unidentified minimum and maximum negotiated charges and discounted cash price. 
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  • Display of shoppable services in a consumer-friendly format (which can also be scheduled in advance). An online patient-facing price transparency tool would also satisfy this requirement.
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nWith this clear information, it is easy for consumers to shop and compare all prices of different hospitals and estimate the cost of care before going to any hospital. nnBy giving all this information CMS will monitor compliance by reviewing all the complaints that are submitted by individuals and different entities. After checking such complaints if CMS finds any hospital to be non-compliant, then CMS would take additional actions as said above. n

Necessary Requirements

nFollowing are the necessary requirements that every hospital should know. Let’s have a look!n

Items and Services

nIt includes all items and services such as individual items and services and all the services packages that hospitals provide to a patient in connection or outpatient department visit.n

Standard Charges

nCMS recognizes that hospitals may not have standard charges for an item or service, it depends on circumstances and conditions. For this reason, CMS has defined the standard charges that are listed below:n

Gross Charges

nA charge for an individual item or service that is reflected in the hospital charges. This fee does not include any discounts.n

Payer-Specific Negotiated Charges

nThis is the charge that the hospital has negotiated with the third-party payer for the item or service. It does not include the amount ultimately paid by the insurer or patient for the item or service, but only the negotiated base rate. Also, this rate does not include non-negotiated payment rates like a fee for service Medicare or Medicaidn

Discounted Cash Price

nIt is a discounted rate that the hospital charges individuals who pay cash or cash equivalents for an individual unit, service, or package of services.n

De-Identified Minimum and Maximum Negotiated Charge 

nThese charges include the lowest or highest charges that hospitals have negotiated with all third-party payers for an item or service. n

Shoppable Services

nWhen a hospital provides these services, CMS has identified 70 shoppable services for which the appropriate standard fee must be charged. The hospital must select an additional 230 shoppable services based on the prior year’s utilization or rates for the services.nnFor questions related to CMS’ final Price Transparency Rule, or if you need help evaluating how your organization will comply with the Rule, contact one of our specialists at +1 888-598-9181

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