Street sign comparing pricesCMS is looking into what other actions it should take to makesure that hospitals display price information in a way that's mostuseful to consumers. (Image: Shutterstock)

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In its quest to improve price transparency, the Centers forMedicare and Medicaid is on the hunt for a company that has theexpertise to help it create a price comparison tool for consumers to checkprices at hospitals.

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That's according to Modern Healthcare, which says that despiteindustry opposition, CMS is plunging ahead with its plan. Why theopposition? According to industry arguments against the action, thecost of any given procedure is more dependent on the kind of insurance carried by the consumer, notthe provider of the procedure.

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Related: CMS pushes price transparency forhospitals

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But CMS isn't having any of that argument and has updatedits previous pricing transparency guideline taken from theAffordable Care Act to now require “hospitals to publish a list ofstandard charges in an online, machine-readable format startingJan. 1.” In addition, hospitals “must update that chargeinformation, drawn from their retail chargemaster list, at leastannually.”

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According to Modern Healthcare, while CMS has released asources-sought notice to see if any companies have the expertise tocreate the consumer tool, it's not clear whether that action isrelated to the update to the pricing transparency guideline.However, CMS did say earlier in the month in a rulemaking statement that it's working ondetermining what other actions it should take to make sure thathospitals display price information in a way that's most useful toconsumers so that they can more easily compare providers on priceand quality.

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The sources-sought notice requires that contractors responding“must have experience with transmitting and storing medicalprovider information and using bid or auction data for healthcareprocedures. Responding companies should also have specificexperience supporting provider pricing and transparency efforts andcurrently offer support for the development and maintenance ofweb-based price comparison tools, bidding systems andapplications.”

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“Ask any hospital, lab or physician the price of anything andall you ever get back is a question: 'What insurance do you have?'”Steven Weissman, an attorney and former hospital president, toldModern Healthcare. “Each patient's price depends on how muchcan be extracted.”

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And according to the American Hospital Association and otherhospital industry sources, the right source for pricing data shouldbe payers, not hospitals, since those prices will determine whatconsumers will end up paying out of pocket. They also dismissprovider charge and payment data are proprietary, and not useful toconsumers who want to know what their own bottom-line cost willbe.

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Again, CMS dismissed such arguments this month in a rulemaking,saying “nothing justifies a delay in the provision of chargemasterinformation to the public.”

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Marlene Satter

Marlene Y. Satter has worked in and written about the financial industry for decades.