CMS price transparency deadlines are around the corner — Here’s what hospitals should know

In the past, many hospitals haven’t had the time, money or bandwidth to arm patients with transparent pricing information; providing actionable data requires extensive work by hospital staff because of complex reimbursement methodologies and service packaging.

Despite these challenges, mounting state-level requirements and CMS’ deepening involvement have given hospitals less flexibility in how they handle price transparency, experts said during a July 24 webinar sponsored by Healthcare Financial Resources and hosted by Becker’s Hospital Review.

The presenters were:

  • Randi Brantner, vice president of analytics for Healthcare Financial Resources
  • Ryan Ripper, software developer for PARA HealthCare Analytics, an HFRI Company

For several years, states including California, Colorado and North Carolina have required annual posting of chargemasters, a selection of hospital financial reports and/or a listing of common procedures. On the federal level, CMS began establishing price transparency requirements in 2015. Two new requirements are set to take effect Jan. 1, 2021.

While HFRI sides with the American Hospital Association in its assertion that some of these impending CMS requirements will cause confusion among patients and disrupt contract negotiations between payers and hospitals, the company is “moving forward with implementing price transparency solutions for our hospital clients and assisting in the data-mining required to report this information to CMS,” Ms. Brantner said.

She and Mr. Ripper explained the two requirements in place for 2021:

1. On its public website, each hospital must post a single comprehensive, machine-readable file containing each item and service it provides. Accessible file formats include Microsoft Excel, comma separated values (CSV), Java Script Object Notation (JSON) and extensible markup language (XML). The following data points should be identified:

  • The chargemaster price or gross charge associated with each line
  • The self-pay or cash price
  • The negotiated price for each third-party payer, listing out the specific payer-negotiated charge for each insurance contract
  • The lowest negotiated price of the third-party payers, presenting a de-identified minimum without specifically noting which contract is associated with this price
  • The highest negotiated price of the third-party payers, presenting a de-identified maximum where the specific contract associated with the price isn’t noted

“There exist elements to the file that do not lend to effectively providing information. So, with that, we acknowledge the consumer will be misled when identifying individual lines to obtain an estimate, contradicting the usefulness of the comprehensive, machine-readable file itself,” Mr. Ripper said. “Understanding these considerations makes sense for why CMS introduced the second requirement.”

2. Hospitals must publish a secondary document listing 300 “shoppable” services, including 70 preselected by CMS. If a hospital doesn’t provide one of the preselected services, it should note that the service isn’t available and replace the unavailable service with one of its choosing. The remaining 230 services are to be chosen by the individual hospital. PARA recommends including services that are high-volume and pulling from areas such as ambulatory surgery, laboratory, radiology, COVID-19 diagnostic testing and women’s services.

As with the first requirement, hospitals must include payer-specific negotiated rates in this 300-item listing. The document must also be prominently displayed and available for download on the facility’s public website. However, this second requirement “does a better job of providing more meaningful information,” Mr. Ripper said, because hospitals must include any ancillary services that are customarily included with the primary shoppable services, as well as any supplies, drugs or other costs that go hand-in-hand. 

Conclusion

Both of these looming CMS price transparency requirements center on the idea that patients should be as informed as possible. Patients who do not have the resources to compare hospital prices or to understand their financial liability may be blindsided by large bills, but they also largely contribute to hospitals’ bad debt issues, Ms. Brantner said. So, to improve patient satisfaction and reduce bad debt, hospitals must help patients fully understand their estimated financial liability and payment options.

“This all depends on our ability to provide that information in a consumer-friendly, intuitive manner,” Ms. Brantner said. “We believe that facilities must go the extra mile to ensure that the information we are providing to patients is useful and intuitive.”

Click here to view a recording of the webinar.

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