Significant changes are set to take place this year that will enhance price transparency in health care, impacting all parties, including providers, payers, and even patients.
With national health care spending projected to outpace economic growth, the Centers for Medicare and Medicaid Services (CMS) is focused on price transparency, which they believe, through varying federal regulations, will reduce overall health care expenditures.
Tiered Consequences
CMS plans to enforce regulations on any health care party that doesn’t comply with federal price transparency laws, beginning with a warning notice and then escalating to a corrective action plan. The agency is prepared to enforce monetary penalties and may even publicize such penalties.
Payers should be aware that CMS performs frequent audits of websites to ensure compliance and actively investigates complaints that are filed with the agency.
Hospital Price Transparency Changes
Beginning January 1, 2025, hospitals are now required to report and publish new fields in their publicly available chargemasters. An overview of these new fields is noted below.
Estimated Allowed Amount: The estimated allowed amount is the average dollar amount the hospital has historically received from payers. Often, the published contract amount is not historically the paid amount due to modifiers and outliers.
Drug Pricing: Along with the drug name, hospitals are now required to include the unit and unit of measurement.
Modifiers: Hospitals are required to include any applicable modifiers that affect the standard negotiated rate. A description of the modifier and how it affects payments must also be included.
Key Implications for Stakeholders
Providers, payers, and patients will all be impacted by these new price transparency rules and regulations. As we are now well into 2025, providers and payers, especially, should be aware of these changes by implementing robust compliance strategies and leveraging the data for improvements in health care delivery. Some of the most notable implications health care organizations should expect are described below.
Providers: Must ensure all publicly available price transparency data is correct and meets CMS guidelines. Some providers may find it helpful to secure outside consultants to include these additional fields necessary to comply with the accepted data template.
Patients can also expect to benefit from increased transparency, which will empower them to factor financial considerations into their health care decisions. Providers should prepare for how to best counsel patients navigating cost concerns to support the best outcomes.
Payers: Price transparency data will provide payers with improved insights into market pricing. This data can be leveraged to establish not only new market entrance rates but also a comparison of hospitals in an existing market for benchmarking competitors.
Planning For Your Future
As we are now in 2025, stakeholders should be aware of these price transparency changes by implementing robust compliance strategies and leveraging the data for improvements in health care delivery.
TOG helps payers turn new regulations into opportunities. Gain valuable market insights, refine your negotiation strategies, and improve member satisfaction with our comprehensive solutions. Learn more about our network intelligence services or contact us to book a new obligation consultation today.