What Hospitals Need To Know About Price Transparency

The CY20 Final Rule expanded the transparency requirements described in the FY19 Final Rule. What does that mean for hospitals and systems?

Our recent webinar broke down what we expect.


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The Final Rule is about definitions

Section 2718(e) STANDARD HOSPITAL CHARGES —Each hospital operating within the United States shall 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, including for diagnosis-related groups established under section 1886(d)(4) of the Social Security Act.

FY19 IPPS FINAL RULE – As one step to further improve the public accessibility of charge information, effective January 1, 2019, we announced the update to our guidelines to require hospitals to make available a list of their current ​standard charges via the Internet in a machine readable format and to update this information at least annually, or more often as appropriate. This could be in the form of the chargemaster itself or another form of the hospital’s choice, as long as the information is in machine readable format.”

Definition of “Hospital” and “Hospitals” regarded as having met requirements​:

The final rule formally defines a “hospital” very broadly to include most types of hospitals from all areas of the US and US territories. The only exceptions to the reporting requirements would be “Federally-owned or operated institutions” as these facilities “are not accessible to the general public, except in emergency situations, and already make their charges publicly available are deemed to have met the requirements of Section 2718(e).” Ambulatory Surgical Centers (ASCs) or other non-hospital sites-of-care (lab, imaging centers) are also excluded.

Definition for “Items & Services:”​

CMS is defining what is meant by providing pricing information for “all items and services” to be inclusive of all “individual items and services and service packages that could be provided by a hospital to a patient in connection with an inpatient admission or an outpatient department visit for which the hospital has established a standard charge”​

  1. ALL ITEMS in the chargemaster and/or provided to patients, including drugs and supplies​
  2. SERVICE PACKAGES – meaning all other types of “aggregation of individual items and services into a single service with a single charge” the hospital could be paid under – including, MSDRGs, per diems, and other packages including those in outpatient settings​
  3. PROFESSIONAL FEES – charges for employed physicians and non-physician practitioners

There are two key disclosures that will be required beginning January 1, 2021:



WHO/WHEN: Each hospital location operating under a single hospital license that has a different set of standard charges must separately make public the standard charges that are applicable to that location – updates at least once per year (annually)

FORMAT: A single machine readable file – examples include (.XML, .JSON, .CSV – but not .pdf). While it must be one searchable file, the file could have multiple worksheets to display the different types of items, services, service packages, and types of standard charges 


  • Description of each item or service​
  • All five standard charge types – also, any IP/OP pricing differentials that might exist​
  • Accounting/Billing codes – as example, HCPCS codes, DRG codes, or other common payer identifier


  • Prominently displayed on the web without barriers for patients to access​
  • Document must have CMS naming convention

WHO/WHEN: Each hospital location operating under a single hospital license that has a different set of standard charges must separately make public the standard charges that are applicable to that location – updates at least once per year (annually)

QUANTITY: CMS is requiring 300 items and services be provided (including 70 CMS-specified and 230 hospital-selected)​. If the hospital doesn’t provide one of the 70 it should note that but still select replacements so that the total is at least 300.  If 300 aren’t provided to fit the definition then as many as possible should be provided.

SELECTION: A ‘shoppable service’ is a service that can be scheduled by a health care consumer in advance. The hospital should select services that are commonly provided to its patients.

LOCATION/ACCESSIBILITY:​ Prominently displayed on the web without barriers for patients to access


  1. Plain-language description and primary code used by the hospital for accounting/billing​
  2. Ancillary services that the hospital customarily provides in conjunction with the primary shoppable service​
  3. Location and whether the standard charge applies for IP, OP, or both settings​
  4. Standard Charges – **ALL FIVE EXCEPT GROSS CHARGE**


  1. Hospitals have discretion to choose a format for making public the consumer-friendly information​
  2. CMS will deem a hospital as having met the requirements if the hospital maintains an internet-based price estimator tool that meets the following requirements:​
    • There are still at least 300 services provided (including the CMS 70) ​
    • Provides an **estimate** of the amount the patient will be obligated to pay for​
    • Is prominently displayed on the hospital’s website and accessible to the public without charge and without having to register or establish a user account or password

Want to learn more? Contact us!

How key language changed:

2010 ACA:​ The Original Request

Section 2718(e) STANDARD HOSPITAL CHARGES.—Each hospital operating within the United States shall 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, including for diagnosis-related groups established under section 1886(d)(4) of the Social Security Act.

2014 FY15 IPPS Final Rule:The Reminder 

In the FY 2015 IPPS/LTCH PPS proposed rule (79 FR 28169), we reminded hospitals of their obligation to comply with the provisions of section 2718(e) of the Public Health Service Act. We appreciate the widespread public support we received for including the reminder in the proposed rule. We reiterate that our guidelines for implementing section 2718(e) of the Public Health Service Act are that hospitals either make public a list of their standard charges (whether that be the chargemaster itself or in another form of their choice), or their policies for allowing the public to view a list of those charges in response to an inquiry. MedPAC suggested that hospitals be required to CMS-1607-F 1205 post the list on the Internet, and while we agree that this would be one approach that would satisfy the guidelines, we believe hospitals are in the best position to determine the exact manner and method by which to make the list public in accordance with the guidelines.

2018 FY19 IPPS Final Rule:​ The Requirement

As one step to further improve the public accessibility of charge information, effective January 1, 2019, we announced the update to our guidelines to require hospitals to make available a list of their current standard charges via the Internet​ in a machine readable format and to update this information at least annually, or more often as appropriate. This could be in the form of the chargemaster itself or another form of the hospital’s choice, as long as the information is in machine readable format.

Want to learn more? Let us know!