Opaque Results of Federal Price Transparency Rules and State-Based Alternatives.

Abstract

On January 1, 2019, the Centers for Medicare and Medicaid Services (CMS) issuedmandate CMS-1694-F, which requires inpatient and long-term care hospitals to publicly display a list, or chargemaster, of their standard charges for items and services provided. The reports must be updated annually and provided in electronically importable format (eg, .XML, .CSV files). We commend the focus on price transparency; however, this mandate falls short of its stated goal to “empower patients through better access to hospital price information.” For the insured patient, chargemaster prices demonstrate a poor correlation between the insurer payment and the patient cost-sharing responsibility. Conversely, there are state-led initiatives, such as the California Public Employees Retirement System (CalPERS), which have successfully implemented robust price transparency programs using a public all-payer claims database (APCD), demonstrating that price transparency can be a dominant solution (lower total and out of pocket [OOP] costs without worse outcomes). Price transparency is most useful for patients when costs are accurate, relevant, and paired with value-based insurance that minimize OOP costs for services deemed highest value.