KNOW BEFORE YOU GO: CMS SHOULD USE HOSPITAL PRICE TRANSPARENCY RULE ENFORCEMENT TO ENCOURAGE CONSUMER-DRIVEN HEALTH CARE FOR COST CONTAINMENT

Abstract

The United States (U.S.) has the distinction of being the only developed nation where an accident or injury can easily end in financial jeopardy or ultimately end in bankruptcy. Americans describe the U.S. healthcare system as both expensive and broken, with many healthcare economists believing meaningful cost containment will not occur unless healthcare prices become transparent to consumers. Healthcare prices are transparent when consumers receive cost-of-care information prior to getting services. Price transparency empowers consumers to access the information they need to make informed healthcare choices for non-emergency care. In 2019, the Centers for Medicare and Medicaid Services (CMS) published the first hospital price transparency rule listing hospital requirements, which was followed in 2021 by the second hospital price transparency rule with regulations promulgated to clarify requirements and change penalties. Before the federal price transparency rules, most consumers across the U.S. did not have the means to determine the cost of care or their expected out-of-pocket amounts for shoppable services. A consumer's out-of-pocket amount is what the consumer is expected to pay for their care, and a service that can be scheduled in advance is considered a shoppable service.

The price transparency rules should be enforced, and the rules' requirements expanded to control rising U.S. national health expenditures so that consumers are empowered to shop for high-quality low-cost care because consumer out-of-pocket amounts are forcing individuals to amass medical debt and delay care. Part I of this paper will discuss U.S. healthcare spending, covering the cost of care and medical debt consequences. Part II will explain the federal price transparency regulatory framework together with hospital compliance and CMS enforcement activity. Part III will examine hospital price transparency policy strengths and weaknesses. Lastly, Part IV of this paper will suggest the next steps toward U.S. healthcare cost containment.