New Hospital Cost Transparency Rule Now in Effect

The Hospital Price Transparency rule issued by the Department of Health and Human Services (HHS) went into effect Jan. 1, 2021. The rule affects all hospitals operating in the United States. Federally owned and operated hospitals such as Veteran’s Administration, Indian Health or Department of Defense operated hospitals are exempt.

The Centers for Medicare & Medicaid Services (CMS) issued a sepa- rate rule that imposes price transparency requirements on health insurers, including employers who offer self-funded plans. Insurers must ensure that members have access to information about out-of-pocket costs and other vital price information before they receive treatment.

Both rules are in response to an executive order issued by President Donald Trump on June 24, 2019. Trump directed HHS to adopt regulations improving price and quality transparency and implement statutes added by the Affordable Care Act. Trump said the new rules were a major victory for patient choice and affordable health care because they would stop people from getting “ripped off.”

Consumers will now be able to shop and compare prices between hospitals. Previously, patients often didn’t know the cost of a service until after it was performed. The “2020 Outpatient Prospective Payment System and Ambulatory Surgery Price Transparency Requirement for Hospitals to Make Standard Charges Public” requires hospitals, including non-Medicare and non- Medicaid hospitals, to make their “standard charges” public (including rates negotiated with third parties).