Hospital Pricing Transparency

Starting January 1, 2021, each hospital operating in the United States will be required to provide clear, accessible pricing information online about the items and services they provide in two ways:

  1. As a comprehensive machine-readable file with all items and services.

  2. In a display of shoppable services in a consumer-friendly format.

This information will make it easier for consumers to shop and compare prices across hospitals and estimate the cost of care before going to the hospital.

CMS plans to audit a sample of hospitals for compliance starting in January, in addition to investigating complaints that are submitted to CMS and reviewing analyses of non-compliance, and hospitals may face civil monetary penalties for noncompliance.

Most institutions in the United States that are licensed as hospitals or otherwise approved as meeting applicable licensing requirements must post their standard charges prominently on a publicly available website.

For additional details on the definition of hospital refer to 45 CFR §180.20 and on the federally owned or operated hospitals already deemed to be in compliance refer to 45 CFR §180.30.

These changes in hospital billing practices will be significant if accomplished and properly enforced. Consumers will have a menu of services to choose from prior to admission, similar to a dinning experience. They will also be able to contest any fees for services that did not occur during hospitalization. Patient's may also be able to choose pharmaceutical preferences, generic versus name brand to reduce costs. However, this new availability of choice may confuse a patient, people in pain do not make good decisions and the burden of upfront pricing may cause additional anxiety and suffering.

These changes may have significant impact across the medical and legal industries. Defense of medical negligence may attempt to show that the consumer choose the wrong services therefore are responsible for negligence incurred.

For the personal injury attorney this will mean that a TRUE cost of care can be determined prior to entering into settlement agreements. This will also allow for effective subrogation lien reviews, eliminating any costs not directly related to a particular case and allowing claimants to recover higher settlement funds.

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