Insight

Price transparency: Requirements for hospitals and health plans

Several price transparency requirements for hospitals and health plans take effect in 2021; stakeholders must prepare

Larry Kocot

Larry Kocot

Principal, Advisory, KPMG LLP

+1 202-533-3674

Price transparency has been a key priority for the Trump Administration to empower consumers to make informed choices about the care they receive and to encourage competition. Following an October 2017 Executive Order on “Promoting Healthcare Choice and Competition Across the United States,” the Department of Health and Human Services (HHS), Department of the Treasury, and Department of Labor issued a report in December 2018 on “Reforming America’s Healthcare System Through Choice and Competition.” Among other things, the report recommended “developing price and quality transparency initiatives to ensure that newly empowered health care consumers can make well-informed decisions about their care.”

President Trump signed an Executive Order in June 2019 entitled, “Improving Price and Quality Transparency in American Healthcare to Put Patients First.” The Executive Order required HHS rulemaking to require hospitals to publicly post standard charge information and HHS-Treasury-Labor rulemaking to solicit comments on requiring health plans to provide access to expected out-of-pocket costs for patients. Building upon hospital price transparency requirements established by the Affordable Care Act (ACA) and the interoperability requirements and vision under the 21st Century Cures Act, this Executive Order set in motion a number of regulatory actions over the past year to increase price transparency reporting requirements for hospitals and health plans and the availability of data to support consumer-directed third party applications.[1] Most recently, the Inpatient Prospective Payment System (IPPS) final rule for FY2021 (“IPPS Final Rule”) requires hospitals to report median payer-specific negotiated charges for Medicare Advantage (MA) organizations on cost reports beginning in January 2021. Failure to comply with this requirement could result in providers not receiving Medicare payments.


 

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