California Chargemasters Regulations
While the federal requirements are new, California has required hospitals to submit Chargemasters, which contain the prices of all goods, services and procedures which are used to generate patient bills, since AB2015 was passed in 2005. Further research indicates the last time MCDH filed these reports was for 2014 and the penalties allow for a fine of $100 per day. California’s Office of Statewide Health Planning and Development (OSHPD) does not have authority to modify or grant exemptions, so it appears that in addition to the transparency voters deserve, the hospital may face another stiff fine! For more information, visit https://oshpd.ca.gov/data-and-reports/cost and you can read the regulations and check the data reports.
HHS Takes New Steps in Secretary Azar’s Value-Based Agenda
On Tuesday, HHS’s Centers for Medicare & Medicaid Services (CMS) released the draft Fiscal Year 2019 Inpatient Prospective Payment System rule, which contains proposals to advance HHS Secretary Alex Azar’s agenda for moving to a healthcare system that pays for value, as well as a request for information regarding future value-based reforms.
Secretary Azar issued the following statement:
“America’s healthcare system has to change, and President Trump’s Administration recognizes that. This payment proposal takes important steps toward a Medicare system that puts patients in charge of their care and allows them to receive the quality and price information needed to drive competition and increase value.
“The rule also solicits feedback on further bold actions, which will be necessary to disrupt our existing system and deliver real value for healthcare consumers. Through boosting interoperability and maximizing the promise of health IT, promoting price and quality transparency, pioneering new models, and removing government burdens, we are going to move toward a system that provides better care for Americans at a lower cost.”
CMS’s proposed policy changes include:
- Requiring hospitals to post their standard list of prices on the Internet and in a machine-readable format, rather than just being required to make them available in some form
- Focusing the Electronic Health Record Incentive Program on promoting interoperability, to allow patients to control their records and access them in a usable format
- Eliminating duplicative. overly burdensome, or out-of-date quality measures through the “Meaningful Measures” initiative
CMS also issued a Request for Information soliciting comment on new ways to:
- Stop “surprise billing” by providers
- Provide patients better information up front about the out-of-pocket costs they will face
- Encourage further transparency from providers, including providing tools for comparing prices and making public which institutions are out of compliance with transparency measures
- Push providers reimbursed by Medicare to take more steps in making their electronic health records interoperable
The Tuesday announcement follows Monday’s announcement about other steps in Secretary Azar’s value-based agenda, including CMS’s publishing of public comments regarding a new direction for the Center for Medicare & Medicaid Innovation and the announcement of a new Request for Information on direct provider contracting: https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2018-Press-releases-items/2018-04-23.html
For more on Secretary Azar’s vision for value-based care, click here or visit: https://www.hhs.gov/about/leadership/secretary/speeches/2018-speeches/remarks-on-value-based-transformation-to-the-federation-of-american-hospitals.html?new.
California Reporting Requirements
AB 1045 repealed the requirement that each hospital annually submit a list of 25 services or procedures commonly charged to patients. Instead, each hospital is required to annually submit a list of charges for 25 common outpatient procedures beginning July 1, 2006.
Two reporting requirements established by AB 1627 remain intact. Each hospital is still required to annually submit a copy of its chargemaster and an estimate of the percentage change in the hospital’s gross revenue due to any price change during the 12-month period beginning with the effective date of the previous chargemaster filed. The initial reporting of the estimate calculation and supporting documentation will commence July 1, 2006, using the prices in effect on June 1, 2005 as the beginning date.
To obtain modifications to the requirements specified for electronic file formats, effective date of the documents, submission date of the documents, or methods of submitting electronic files, hospitals must file written requests for modification with OSHPD. Hospitals must have an OSHPD-approved modification prior to implementation of any change to the applicable requirements. Modification requests shall specify the precise changes being requested and the reason(s) the changes are needed. OSHPD will either approve or disapprove requests for modification on a case-by-case basis.
Hospitals must have copy on site except small and rural ones so MCDH may be exempt.
A hospital charge description master, also known as a chargemaster or CDM, contains the prices of all services, goods, and procedures for which a separate charge exists. It is used to generate a patient’s bill. As required by the Payers’ Bill of Rights, each hospital is required to submit a copy of its chargemaster, a list of average charges for 25 common outpatient procedures, and the estimated percentage change in gross revenue due to price changes each July 1.
It is important to note that the State of California does not currently possess the authority to set or limit the prices that are included on the submitted hospital chargemasters. Furthermore, the submitted chargemasters are reviewed for compliance with the statutes specified below, and a full audit of this information is not performed. Therefore, the Office of Statewide Health Planning & Development (OSHPD) is not able to provide an assessment on the accuracy of the submitted information and is not responsible for this information in any manner. The responsibility for any of the submitted data provided regarding the chargemasters rests with hospital management.
The chargemasters are currently not required to be provided in a standardized format. Therefore, it is currently not possible to generate an aggregate statewide chargemaster.
Hospital chargemasters and related pricing information are available online. To purchase/order a copy of hospital chargemaster information on CD/DVD, please contact us and will assist you with your order.
Is a rural hospital required to submit its chargemaster to OSHPD?
Yes. All rural hospitals are required to submit the required pricing information to OSHPD. However, a hospital defined as “small and rural” according to Section 124840 of the Health and Safety Code is exempt from making a written or electronic copy of its chargemaster available at the hospital’s location or posting a copy on the hospital’s Internet website.
7. Is there a penalty for non-submission?
Yes. AB 1045 adds the provision that a hospital may be liable for a civil penalty of $100 per day if it does not file the required information to OSHPD.
Who should I contact if I feel a hospital is in violation of the Payers’ bill of Rights?
You can contact the California Department of Public Health (CDPH) at the local district office in the county where the hospital is located. Phone numbers for CDPH can be obtained on their Licensing and Certification Program.
AB 1045 and the Payers’ Bill of Rights
AB 1045 (Chapter 532, Statutes of 2005) amended the Payers’ Bill of Rights established by AB 1627 (Chapter 582, Statutes of 2003). These statutes require all licensed general acute care hospitals, psychiatric acute hospitals, and special hospitals in California to make certain pricing information available to the public and to submit this information annually to OSHPD. Health facilities licensed as a Chemical Dependency Recovery Hospital or a Psychiatric Health Facility are exempt from these requirements.
The Payers′ Bill of Rights still requires each licensed hospital to make a written or electronic copy of its chargemaster available at the hospital′s location or on its website. A hospital that is statutorily classified as “small and rural” is exempt from making its chargemaster available on-site.
To view the Payers’ Bill of Rights visit the California Law website. Follow the prompts to search for Health and Safety Code 1339.50 – 1339.59.
OSHPD has adopted regulations for reporting hospital chargemasters and related pricing documents in compliance with AB 1627 and AB 1045.
If any person feels that a hospital is in violation of the Payers’ Bill of Rights, they may file a claim with the California Department of Public Health (CDPH), who is responsible for investigating such claims and informing that person of its determination on whether a violation has occurred and what actions it will take. This process would also pertain to any person who has no healthcare coverage and requested a written estimate from a hospital for healthcare services, procedures and supplies or requested information and/or an application for financial assistance or charity care and received no response from the hospital. See the Licensing and Certification Program to determine which CDPH location to contact (the local district office in the county where the hospital is located).
Major Changes to Payers’ Bill of Rights
Effective January 1, 2006, AB 1045 requires each hospital to provide upon request a written estimate of the amount the hospital will require an uninsured person to pay for hospital services that are reasonably expected to be provided, based on average length of stay and services provided for the person’s diagnosis. Estimates are not required for emergency services. Each hospital is also required to provide information about the hospital’s financial assistance and charity care policies to uninsured patients, along with contact information for a hospital representative, to obtain more information about these policies.
In addition, AB 1045 adds the provision that a hospital may be liable for a $100 per day civil penalty if it does not file the required information to OSHPD.
Lastly, each hospital is required to provide a list of charges for 25 common outpatient procedures and an OSHPD-developed list of charges for common inpatient DRGs to any person upon request.