Section 2718(e) of the Public Health Service Act, which was enacted as part of the Affordable Care Act, updated Medicare payment policies to require that “each hospital operating within the United States, for each year, establish (and update) and make public (in accordance with guidelines developed by the Secretary) a list of the hospital’s standard charges for items and services provided by the hospital.” CMS provided guidance for implementation and stated hospitals are required to make the list of their standard charges, or their policies for public access to the list, available upon inquiry.

CMS has updated its guidance in a final rule published for the Hospital Inpatient Prospective Payment System and available online at Effective January 1, 2019, hospitals are required to make a list of their current charges available via the Internet in a machine readable format and to update the list at least annually, or more often as needed to reflect current charges. The rule provides the list may be in the form of the chargemaster itself or another machine readable format of the hospital’s choosing.

The rule seeks public comment on other actions that may be appropriate to improve the transparency of hospital charges and to enable patients to compare charges for similar services across hospitals. For example, public comment is requested on whether “standard charges” should be defined to mean average rates for the items on the chargemaster; average rates for groups of services commonly billed together (such as for a MS-DRG) as determined by the hospital based on its billing patterns; or the average discount off the chargemaster amount across all payers? CMS is evaluating making noncompliance with Section 2718(e) of the Public Health Service Act public as well as additional enforcement mechanisms in future rulemaking.

We will continue to monitor this issue and report new developments.