CMS Proposes Price Transparency Rule For Hospitals

By Jof Enriquez,
Follow me on Twitter @jofenriq

The Centers for Medicare and Medicaid Services (CMS) has proposed a new rule for fiscal year 2015 that would require hospitals to publicly reveal a standard list of prices for inpatient health services and procedures, as part of the Affordable Care Act.

In a 1,688-page proposal regarding the Medicare hospital inpatient prospective payment system (IPPS), CMS said an estimated 3,400 acute-care hospitals and 435 long-term care facilities must disclose prices online or do so after consumers request for information.

Already years behind implementation of tighter regulations, CMS intends to further reduce hospital charges and promote disclosure and transparency to patients and the public.

“Hospital pricing is notoriously variable, as the administration confirmed in a May 2013 release of data on what hospitals charge for common in-patient services,” according to The Hill. “Even within the same geographic area, the cost of a common medical procedure could vary by thousands of dollars, the data showed.”

Under the proposed rule, inpatient hospitals that participate in the Hospital Inpatient Quality Reporting (IQR) Program and are meaningful users of electronic health records (EHR) will receive 1.3 percent more in payments, while long-term care hospitals will get 0.8 percent more. 

Hospitals who do not report quality data and facilities who are not meaningful users of electronic health records would each lose “a quarter of the market basket update” (2.7 percent), according to Beckers Hospital Review.

CMS said it expects aggregate payments to hospitals to decrease by $241 million this year following implementation of the new rules.

In the proposal, CMS also announced pay cuts of up to 1 percent for hospitals with the highest rates of hospital acquired infections. The agency estimates that it would save $330 million, or $438,000 per affected hospital, under the Hospital-Acquired Condition Reduction program.

CMS said it will also raise the maximum penalty for 30-day readmission rates for pneumonia, heart attack, and heart failure, from 2 percent to 3 percent next year. The move is expected to cut $422 million in payments for 2,623 hospitals. According to the agency, the Hospital-Acquired Condition Reduction program has helped decrease Medicare hospital readmissions by 150,000 from January 2012 through December 2014.