CMS proposes further price transparency

Following up on an executive order signed earlier in the year, Kaiser Health News recently reported on a proposed rule by the Centers for Medicare & Medicaid Services (CMS, also known as Medicare) that hospitals disclose prices for common procedures (mandated last year), including negotiated prices (new). The proposed rule requires "payer-specific negotiated charges" so a procedure should have multiple prices listed (one for the cash rate, and one per insurer). We are pleased that CMS is proposing that the prices are to be published in a machine-readable format, which should make it easier for websites to incorporate the data. Even more powerful would be if this regulation applied to clinics as well, where a number of outpatient procedures may occur.

Understandably, the American Hospital Association was not happy about the proposal. Interestingly, America's Health Insurance Plans was also against the proposal, suggesting that insurers feel confident about the effectiveness of their negotiations. If this proposal goes through (legal action to prevent it is expected), I think we will find that some insurers had been more successful than others in negotiating prices.