Health Law Informer

CMS finalized the Outpatient Prospective Payment System hospital price transparency rules on November 15, 2019. As of January 1, 2021, hospitals will have to publicly post (and update annually) two sets of data: first, a comprehensive list of standard charges for items services offered by the hospital, and second, a consumer-friendly list of 300 “shoppable” services, including 70 selected by the Centers for Medicare and Medicaid Services (“CMS”).

The first transparency requirement states that each hospital operating within the United States must establish and make public a list of the hospital’s standard charges for items and services provided by the hospital, including diagnosis-related groups (DRGs). Standard charge is defined as “the regular rate established by the hospital for an item or service provided to a specific group of paying patients. This includes: (i) gross charge, (ii) payer-specific negotiated charge, (iii) de-identified minimum negotiated charge, (iv) de-identified maximum negotiated charge, and (v) discounted cash price.” Items and services is defined as “all items and services, including 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.” Examples include supplies and procedures and room and board.

CMS recently issued long-awaited draft guidance on hospital co-location with other hospitals or healthcare facilities, providing some potential insight on the otherwise ambiguous prohibition on “shared space.” This prohibition loosely stems from the requirement that a Medicare participating hospital is evaluated “as a whole” for compliance with the Conditions of Participation (“CoP”), among other state and federal regulatory requirements. Previously, it was believed that the provider based regulations at 42 C.F.R. § 413.65 governed this prohibition (this section was cited in a 2016 memorandum from the Pennsylvania Department of Health), but the CMS guidance did not cite this particular section.

In recent years, CMS has started to crack down on provider based hospital departments that physically share space with non licensed or separately owned hospital facilities, generally prohibiting shared staff, waiting rooms, check-in desks, patient bathrooms, and other similar items and costs. Although the prohibition was not absolute (CMS had permitted certain things to be shared, such as staff lounges and shared main lobbies), hospitals that sought to attain and maintain compliance struggled with the lack of clear guidance from CMS, and had to rely largely on word of mouth, occasional information distributed by State Survey Agencies, or even citations received if the hospital was caught with prohibited shared space or staffing. This was especially troubling in light of the fact that remediation potentially involved large scale, expensive construction and a hiring and staffing model revamp, among other mandatory modifications.