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Federal Government Increases Focus on Price Transparency

The Trump administration continues its focus on making information about medical costs more available as a strategy to help patients become more price- and cost-conscious in their choice of hospitals, physicians, and prescription drugs. The administration’s current effort to increase price transparency for hospitals stems from the 2019 inpatient and long-term care hospital proposed payment final rule.

The rule, which went into effect in January of 2019, requires hospitals to post charges for all services and items for which they bill patients or their insurance companies, including all procedures, tests, drugs, and any other service charges that may be associated with the patient’s care. The information has to be made available in a machine-readable format (a format easily processed by computers) on a hospital’s website. Requiring the easy accessibility of charge information to patients is a dramatic change in the attitude of hospitals; as a 2017 article in the New York Times described, hospitals regarded the codes and master price list comprising their billing strategies as “trade secrets” to be used as part of their negotiations with private payers.

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