For our providers
What action has the Centers for Medicare & Medicaid Services (CMS) taken related to hospital price transparency?
CMS has finalized a rule that requires hospitals to establish, update and make public a list of their standard charges for the items and services they provide. Hospitals must provide this information in a machine-readable format and a consumer-friendly format, and must update the information annually. This final rule is effective on January 1, 2021.
What are the standard charges that CMS says hospitals must make public?
Under this rule, five standard charges must be made available to patients:
- Gross charge for an individual item or service as reflected on the hospital’s chargemaster, minus any discounts
- Discounted cash price for a hospital item or service
- Charge that a hospital has negotiated with a third-party payer for an item or service
- Lowest charge that a hospital has negotiated with all third-party payers for an item or service
- Highest charge that a hospital has negotiated with all third-party payers for an item or service
Why did CMS establish this rule?
CMS believes this action is necessary to promote price transparency in health care and public access to hospital standard charges. They want members of the public – including patients, employers, clinicians and other third parties – to have the information they need to make more informed decisions about their care. CMS also believes these final policies will help to increase market competition and ultimately drive down the costs of health care services, making them more affordable for all patients.
How is Texas Children’s addressing the provisions of the CMS rule?
Texas Children’s began efforts to improve transparency several years ago, well before the CMS finalized this rule. We are committed to transparency and want to educate our patients and their families regarding their financial obligations.
- In 2019, Texas Children’s began publishing its chargemaster online. The chargemaster is used by hospitals to create a summary of charges and services, which are submitted as claims to health plans. A hospital’s chargemaster data also tracks service volume, costs and revenue.
- Texas Children’s also created and launched an online estimator tool in 2019 to help families better understand what their unique out-of-pocket expenses will be based on their individual insurance/health plan. With this tool, our patients and families can access this important information at their fingertips, rather than calling to request an estimate from one of our teams.
- In 2021, Texas Children’s will begin posting online the negotiated rates that health insurers pay for services.
Where is this pricing information located?
The chargemaster, online estimator tool and negotiated rates are all available on Texas Children’s website.
Why is the self-estimate tool more useful for patients than our chargemaster?
Patient’s want to know what their personalized cost will be. The self-estimate tool takes into account the patient’s health plan coverage and the services they are receiving to help them understand their personalized out of pocket cost. The chargemaster does not provide health plan benefits and personal copay, coinsurance or deductible.
For our patients and families
Why do Texas Children’s costs seem so much higher than other institutions for the same procedures?
Hospital rates are evaluated by reviewing each charge versus similar hospitals – our market peers for general services, and our pediatric peers for specialized services. Charges alone do not tell the whole story and should not be the sole basis in your decision-making. Physician experience, research conducted, hospital quality and outcomes should also play a role in your decision. As one of the top ranked children’s hospitals in the nation, Texas Children’s strives to provide the best care possible with rates that are comparable to other children’s hospitals.
Why am I paying so much more for my room as compared to other hospitals?
Texas Children’s Hospital is a full-service, free-standing pediatric hospital with the complete complement of services needed to care for children in an environment built and designed to specifically meet their needs. When looking at room rates, it is important to make sure that you are comparing Texas Children’s to other free-standing children’s hospitals.
Why does Texas Children’s charge a facility fee?
Facility fees occur when a physician is seen for some services in a hospital outpatient setting.
Why is the charge on my insurance EOB different than the charge listed on the chargemaster?
Your EOB does not provide line item charges and typically includes more than one service code. The charges you see on your EOB represent a bundled group of charges.
Why can’t I find a certain procedure in the pricing information and estimate tool provided online?
The estimate tool is intended to provide estimates for scheduled procedures, enabling our patients to obtain their out-of-pocket cost prior to their scheduled services.
Who can I talk to if I have questions regarding my bill, charges for services or other costs?
Please contact Texas Children’s customer service team at 832-824-2004 to discuss any questions related to billing, charges or costs.
Key terms and definitions
- Charge: The dollar amount a provider sets for services rendered before negotiating any discounts. The charge can be different from the amount paid.
- Price: The total amount a provider expects to be paid by payers and patients for health care services.
- Cost: The definition of cost varies by the party incurring the expense.
- Cost is the amount payable out of pocket for health care services, which may include deductibles, copayments, coinsurance, amounts payable by the patient for services that are not included in the patient’s benefit design, and amounts “balanced billed” by out-of-network providers. Health insurance premiums constitute a separate category of health care costs for patients, independent of health care service utilization.
- Costs can also be expenses incurred by a hospital in providing patient care. This can include the direct costs of patient care such as nursing, room and board, medicines and supplies, as well as, and equally important, indirect costs such as overhead for administrative expenses including complying with federal and state regulatory requirements, infection control, medical records, building maintenance, and equipment.
- Out-of-Pocket Payment: Your expenses for medical care that aren’t reimbursed by insurance. Out-of-pocket costs include deductibles, coinsurance, and copayments for covered services plus all costs for services that aren’t covered.
- Provider: An entity, organization, or individual that furnishes a health care service.
- Payor: An organization that negotiates or sets rates for provider services, collects revenue through premium payments or tax dollars, processes provider claims for service, and pays provider claims using collected premium or tax revenues.
- Price Transparency: In health care, readily available information on the price of health care services that, together with other information, helps define the value of those services and enables patients and other care purchasers to identify, compare, and choose providers that offer the desired level of value.
- Value: The quality of a health care service in relation to the total price paid for the service by care purchasers.
- Chargemaster: A hospital’s comprehensive list of items and services provided to patients. The charges listed typically do not correspond to the amount paid by patients and insurers.