CMS updated its hospital price transparency guidance May 22, requiring hospitals to post the actual prices of items and services, not estimates. The update comes after President Donald Trump issued an executive order Feb. 25 aimed at boosting healthcare price transparency.
In the updated guidance, CMS said hospitals must display payer-specific standard charges as dollar amounts in their machine-readable files (MRFs) whenever calculable. This includes the amount negotiated for the item or service, the base rate negotiated for a service package and a dollar amount if the standard charge is based on a percentage of a known fee schedule.
CMS also said hospitals should discontinue encoding “999999999” (nine 9s) in the estimated allowed amount data element within the MRF, and instead encode an actual dollar amount.
CMS said it is aware there are “infrequent scenarios” where a hospital has limited historical claims data to derive the estimated allowed amount, such as when a hospital has just negotiated contracts with new payers. In the past, CMS recommended that hospitals encode nine 9s in the data value to indicate there is not sufficient reimbursement history. But after reviewing the MRF files of 68 large hospitals, CMS determined that hospitals are employing the workaround “much more frequently than expected.”
Hospitals are now being asked to use electronic remittance advice data from the previous 12 months to calculate the “estimated allowed amount.” CMS outlined three scenarios for encoding charges:
- If the negotiated rate was used for only part of the past year, use the average from that period.
- If a service was used at least once, average those charges and note “one or more instances” in the file.
- If a service was not used within the 12-month timeframe, the hospital should encode an expected value in dollars and note that there were “zero instances” of use in the file.
CMS is also seeking public input on how to improve hospital compliance and enforcement, and ensure data shared is accurate and complete. The comment period runs through July 21.