By Vandana Macha | August 2024

Healthcare costs are skyrocketing, and many people don’t know what’s included in those costs.  In 2023, employers spent an average of $8,435 on single coverage annual premiums, an increase in 7% from the previous year. They want to understand these costs and find ways to reduce them.

In 2021, the Centers for Medicare and Medicaid Services (CMS) introduced the Hospital Price Transparency rule. This rule requires hospitals to publish their charges for services, including gross charges, discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum charges. However, only a third of hospitals fully comply with these rules as of 2024.

CMS has now updated the price transparency rule. Hospitals must now explain their negotiated rates and provide an accuracy and completeness statement.  This update will increase data and price transparency and help CMS identify non-compliant hospitals more easily. Carol Skenes, a principal strategist at Turquoise Health, emphasized that the “2024 requirements allow for more consistent and automated file review, assessment, and where needed, corrective actions by CMS.”

Complying with price transparency helps consumers and employers make informed healthcare decisions. Consumers can see the prices of services they might need, while self-insured employers can view payer-specific negotiated rates to determine their own pricing.

These price transparency requirements don’t have to burden hospitals and health plans. They can use price transparency data to understand the market, prioritize consumer engagement, and personalize their technology. Archetype dived in to these specific tools in this article.

Still unsure of where to start? Here are a couple of ways employers and health plans can use the price transparency data to their advantage:

• Revise current contracts: The new requirement to include reasonings behind negotiated rates can provide valuable insights into pricing decisions. Employers and health plans can use this information to inform changes to their current contracts.
• Improve individual marketing: Health plans can use the published negotiated rates to aid discussions with potential clients about their own respective rates.
• Inform growth potential: Price transparency data can be used by employers and health plans to evaluate areas for savings and growth

The new requirements are a step forward in increasing price transparency compliance and holding healthcare providers accountable. The requirements are pushing the industry towards greater openness and fairness in pricing.