Skip to Content

Hospital Price Transparency

on Thursday, 6 September 2018 in Health Law Advisory: Zachary J. Buxton, Editor

Per the hospital inpatient final rule that was published in the Federal Register on August 17, 2018, effective January 1, 2019, hospitals must make available a list of their current standard charges via the internet in a machine readable format and must update this information at least annually, or more often as appropriate. CMS clarified that this could be in the form of the chargemaster itself or another form of the hospital’s choice, as long as the information is in machine readable format.

Section 2718(e) of the Public Health Service Act, which was enacted as part of the Affordable Care Act, requires that each hospital establish (and update) and make public a list of the hospital’s standard charges for items and services provided by the hospital. In the 2015 hospital inpatient final rule, CMS stated: “Our guidelines for implementing section 2718(e) of the Public Health Service Act are that hospitals either make public a list of their standard charges (whether that be the chargemaster itself or in another form of their choice), or their policies for allowing the public to view a list of those charges in response to an inquiry.” The new 2019 guidelines, when compared to the prior 2015 guidelines, require that this information be made available via the internet in a machine readable format and that hospitals update this information at least annually, or more often as appropriate.

In updating the guidelines, CMS noted that:

  • It was not requiring that any information be published in a payer specific manner
  • Nothing precludes hospitals from taking additional steps or continuing to provide the information they currently provide
  • Nothing precludes hospitals and payers from working together to provide information on out-of-pocket costs for patients and to improve price transparency for patients
  • Nothing precludes a hospital from providing charity care to uninsured patients

In terms of what was already required under state law in Nebraska, hospitals must provide: itemized bills upon request (Neb. Rev. Stat. § 71-464); a written estimate of average charges of health services for a particular condition or procedure upon request, including posting notice of this service (Neb. Rev. Stat. § 71-2075); and an estimate of the average charges for the 20 most common procedures, updated every 6 months, upon request (Neb. Rev. Stat. § 71-2076).

As for Iowa, SF2026 was introduced in the most recent Iowa legislative session and would have required hospitals to disclose and make available the prices charged for the 75 most common inpatient and the 75 most common outpatient health services. SF2026 did not pass. However, there is a mechanism for Iowa hospital consumers to see hospital charges. The prices for Iowa hospitals can be viewed in a searchable data base on the Iowa Hospital Association website under “Hospital Charges Compare.”

Posting a list of their current standard charges via the internet in a machine readable format and updating this information at least annually will be new to those Nebraska and Iowa hospitals that were not already doing this voluntarily. Because this may be a new standard operating practice, it is recommended that hospitals begin making plans to comply with the new guidelines as soon as possible to meet the January 1, 2019 deadline.

Joseph P. Loudon

1700 Farnam Street | Suite 1500 | Omaha, NE 68102 | 402.344.0500