Image via maderahospital.org
Written by Donald A. Promnitz
A new federal regulation is taking effect at the beginning of the year to promote greater transparency at hospitals. While California has a similar rule, state hospitals will have to make some adjustments in order to comply with the national rule.
Approved in April and officially taking effect on New Year’s Day 2019, the rule will require hospitals across the United States to post what’s called a “charge master of service prices” on their websites for patients to review. This regulation comes as part of the U.S. Department of Health and Human Services’ 2019 Inpatient Prospective Payment System. Placed under the supervision of a hospital chief financial officer, a charge master is a list of prices for treatments, medicines and other services provided by a hospital.
Prices on this list will be based on the average charge per the Medicare Severity-Diagnosis Related Grouping (MS-DRG) system. These rates vary from hospital to hospital.
According to Alex Azar, HHS secretary, the purpose of the rule is to encourage transparency and stop “surprise billing.”
“America’s health care has to change, and President Trump’s administration recognizes that,” Azar said in a press release. “This payment proposal takes important steps toward a Medicare system that puts patients in charge of their care and allows that patient to receive the quality and price information needed to drive competition and increase value.
In California, hospitals are already required to provide charge masters in accordance to the Payers’ Bill of Rights, with this information available on the California Office of Statewide Health Planning and Development (OSHPD) website. However, Mark Foote, CFO for Madera Community Hospital, said that the hospitals will have to post these on their own sites, along with making sure that they comply with the MS-DRG costs.
Foote cautioned that the additional information might not be of substantial use to the patients, regardless of the intent. This is because there are multiple fluctuating variables to consider, including the cost of insurance, the provider in question and federal programs the patient may be on. Foote added that the completed lists could run anywhere from 10,000 to 20,000 lines or longer, with charges accumulating for more procedures, tests and treatments.
“You can’t just pick these charges out of a list and say: ‘I’m going to get charged x amount of dollars for this service,’” Foote said. “That doesn’t quite work that way.”
Regardless of the outcome, though, Foote said that Madera Community Hospital will be in compliance with the new rules. Likewise C.J. Bhalla, senior vice president and CFO for Kaiser Permanente Northern California, said that their hospitals will be fully compliant with the new federal requirements. This will include their Fresno location.
“We support transparency in pricing for the benefit of our members and consumers,” Bhalla said.
Other hospitals in the Valley are also expected to fall in line.