CMS Warns a Common Hospital Price Transparency Approach is Noncompliant with New Requirements

Although the transparency rule explicitly barred the use of averages, said Jeff Leibach, a partner at Guidehouse, averaging makes sense to determine an all-items-and-services rate when health plan payments are based on per diem, percentage of charge or DRGs. “The reality is that there are an infinite number of combinations and permutations of reimbursement methods out there,” Leibach. “So, everybody is left to their own devices to figure out how to best meet their interpretation of CMS’s regs, FAQs and clarifications with the resources they have at their disposal.” Averaging can allow hospital officials to obtain “as close to a negotiated rate for that item or service as [they] can, even if it’s part of a package price,” Leibach said.

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