CMS updates price transparency FAQs as new requirements take effect

CMS published updated FAQs on hospital price transparency requirements to assist organizations in their efforts to comply with a new set of requirements that took effect on January 1. As of this date, hospitals should be including the estimated allowed amount, drug unit and type of measurement, and modifier data elements in their machine-readable files (MRF).

Hospitals have some flexibility in determining an appropriate data source to calculate the estimated allowed amount, according to the FAQs. However, the data source(s) they use must be able to produce an estimate, in dollars, of the amount they expect to be reimbursed on average for the item, service, or package. For example, organizations can use historical claims information or EDI 835 electronic remittance advice transaction data to calculate this amount.

CMS provided additional information on the drug measurement data elements. The drug unit of measurement should reflect the amount of the drug a patient would receive at the standard charge amount established by the hospital, which is usually expressed as a dose, according to the FAQs. The agency noted that the current data dictionary valid values listed on its GitHub repository follow National Drug Code and National Council for Prescription Drug Programs standards.

CMS answered several questions on the inclusion of modifiers in the MRF. Hospitals are required to include modifiers only to the extent that the standard charge is dependent on or can be contextualized by that modifier, according to the FAQs. Organizations can choose how they encode modifiers in their MRFs, but CMS suggested the following two approaches:

• Separately encode each modifier and describe how they affect the standard charges established by the hospital
• Encode the standard charge that results from each possible combination of codes and modifiers for each item/service provided by the hospital

Along with answering questions on the new data elements, CMS clarified why cells can be blank in the spreadsheet format of a hospital’s MRF. Blank cells within a human-readable spreadsheet could signify that the hospital did not have any applicable data to encode in the cell, according to the FAQs. However, the presence of blank cells does not mean that the MRF is incomplete or inaccurate. For example, a hospital may have established a gross charge for a service but has not established the corresponding payer-specific negotiated charge.

The FAQs also include information on monitoring activities and penalties for noncompliance. Revenue integrity professionals can visit CMS’ price transparency GitHub repository for more technical guidance.

Editor’s note: Find more NAHRI coverage on price transparency here.