The new year has brought another round of updates to federal hospital price-transparency rules.
The latest update, which took effect on Jan. 1, requires hospitals to include additional data in their public price files to create consistency and make it easier to compare prices. Specifically, hospitals must now report three new data points: “estimated allowed amount,” details on drug measurements, and billing modifiers.
These updates represent the third and final phase of the Centers for Medicare and Medicaid Services’ (CMS) hospital price-transparency initiative, which began with its initial rollout in 2021. That first phase required hospitals to post comprehensive pricing information online, including a machine-readable file detailing all items and services they provide, as well as a consumer-friendly display of services.
One of the most notable changes this year is the addition of the “estimated allowed amount,” which shows the average payment a hospital has historically received from an insurer for a specific service or procedure. In the past, hospitals often left these fields blank, labeling them “not applicable” when payments were determined by formulas or algorithms.
The changes to drug reporting aim to standardize how hospitals disclose drug types and units of measurement. Inconsistent reporting has long made it challenging to compare medication costs across providers.
And the inclusion of billing modifiers will also standardize in how services are coded and priced. Modifiers are two-digit codes that explain key details about a procedure, such as whether it was performed on both sides of the body or whether it was repeated.
With these changes in place, CMS aims for patients to have the tools to make more informed decisions. However, a report from nonprofit Patient Rights Advocate from November found that only 21.1% of the 2,000 U.S. hospital websites it analyzed were fully compliant with the rules.