Biden administration proposes new rule to improve healthcare price transparency

A rule proposed by the Centers for Medicare and Medicaid Services last month, if implemented, would aim to increase hospitals’ price transparency with patients, pushing back against estimate-based pricing.

“As President Biden made clear in his [Competition Executive Order], a key to price fairness is price transparency,” said HHS Secretary Xavier Becerra in a CMS press release. “With today’s proposed rule, we are simply showing hospitals through stiffer penalties: concealing the costs of services and procedures will not be tolerated by this Administration.”

The meat of the rule includes provisions to standardize hospital data reporting and make it easier to look up on their websites, simplify payment systems for radiation treatment, reverse a 2021 plan to eliminate procedures from the Inpatient-Only list, and more strongly penalize hospitals noncompliant with price transparency rules. Among the proposed methods to improve transparency is a “consumer-friendly expected allowed charges” category pertaining to the different ways hospitals set their prices – typically covering what they expect insurance companies to reimburse. Measures to improve healthcare equity and improve emergency care access in rural areas were also included in the proposal.

However, the process of increasing price transparency in hospitals remains a tricky one. Specific prices can often be difficult to pin down due to the need of healthcare to be flexible to patient needs.

“Each patient is unique and uses a slightly different bundle of services,” said Professor Gerard Anderson of the Johns Hopkins Bloomberg School of Public Health. “You might be in the operating room for 30 minutes, or it might be 45.”

While hospital compliance has been increasing, the exact rate of this has also been a contentious subject. According to a Patient Rights Advocate study released last month, only 36 percent of the 2,000 hospitals it reviewed were fully compliant with current transparency laws. The American Hospital Association fired back shortly after, releasing a statement accusing the study of being “intentionally misleading” and countering that the CMS itself found 70 percent of hospitals to be compliant with current laws.

(Photo courtesy of Ralf Roletschek | CC BY-SA 3.0)


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