Hospital Price Transparency Rule Could Impact IT Budgets and Systems

In November 2019, CMS issued its final hospital price transparency rule. To comply, hospitals must disclose their negotiated rates with payers online, beginning in 2021. In response, the American Hospital Association, Association of American Medical Colleges, Children’s Hospital Association, and the Federation of American Hospitals sued HHS. 

The argument from the organizations was that HHCS lacked statutory authority to demand such disclosures. The court ruled in favor of HHS, meaning hospitals must comply. Compliance with the hospital price transparency rule is likely to impact healthcare IT budgets and systems significantly. 

Hospital Price Transparency Rule Specifics

The final rule requires hospitals to post their “standard charges” online in a machine-readable file. Standard charges include:

• Gross charges
• Discounted cash prices 
• Payer-specific negotiated charges
• De-identified minimum negotiated charges
• De-identified maximum negotiated charges

The disclosure must cover all items, services, supplies, facility fees, and professional charges. 

Hospitals also must post payer-specific negotiated rates so that they are searchable and consumer-friendly for 300 services. This essentially allows patients to “shop around” for the best prices. The rule defines 70 of those services. The other 230 are of the organization’s choice. 

Noncompliance with the rule can lead to fines of up to $300 a day. 

The Impact on Healthcare IT

The stain on healthcare IT relates to the disclosure specifics. The lawsuit against the rule argued that hospitals would have to create files with hundreds to thousands of columns for rates. These spreadsheets would have to include descriptions, codes, gross charges, and columns for each health plan issuer contract. 

Some hospitals could have over 100 contracts with health plans and multiple negotiated rates. Hospitals argue that the size of such files could cause websites to crash. An outage of their public-facing websites could cause a host of problems. 

Large healthcare systems likely have site reliability engineers (SREs) to bolster the continuity of their websites. However, smaller ones probably don’t. In either case, healthcare IT bandwidth is already a challenge. 

What’s Next?

The plaintiffs are reviewing the appeals court decision and are urging the new administration to review the rule. Hospitals will also have to increase IT budgets to comply and formulate a user-friendly “shopping” experience that doesn’t take down their network. 

We’ll continue to follow this rule and the possible solutions. Organizations that need data support should contact our healthcare data experts to see how we can help.