Healthcare Revenue Cycle Management, ICD-10, Claims Reimbursement, Medicare, Medicaid

Policy & Regulation News

92% of Providers Concerned About Hospital Price Transparency Rule

About 43 percent are also unsure how they will publish their pricing information to comply with the CMS hospital price transparency rule by Jan. 1, 2019.

Hospital price transparency

Source: Thinkstock

By Jacqueline LaPointe

- Ninety-two percent of healthcare providers are concerned about the new hospital price transparency requirement recently finalized by CMS, a new poll shows.

CMS finalized the hospital price transparency requirement in the 2019 Inpatient and Long-Term Care Hospital Prospective Payment System (IPPS/LTCH PPS) rule in August 2018. The requirement mandates that hospitals publicize a list of their standard charges online in a machine-readable format by 2019.

The federal agency intends for the new hospital requirement to foster a “patient-centered healthcare system” through healthcare price transparency.

However, healthcare providers participating in a recent survey conducted by PMMC and HBI (Healthcare Business Insights) expressed concerns with the hospital price transparency mandate. The majority of the 150 participants are concerned to some degree about how the public will perceive their standard charges.

Only eight percent of respondents said they were not concerned by the hospital price transparency rule slated to be effective in less than two months.

READ MORE: The Role of the Hospital Chargemaster in Revenue Cycle Management

Most healthcare providers are worried that the standard charges will not help patients make more informed healthcare decisions. CMS designed the hospital price transparency rule to make healthcare decision-making more like the retail experience.

“If you’re buying a car or pretty much anything else, you’re able to do some research,” CMS Administrator Seema Verma said in an exclusive interview with HealthITAnalytics.com after her agency proposed the requirement. “You’re able to know what the quality is. You’re able to make comparisons. Why shouldn’t we be able to do that in healthcare? Every healthcare consumer wants that.”

But publishing standard charges online may not actually help patients understand what they will be paying at the doctor’s office, providers have argued.

The majority of patients do not pay the hospital’s chargemaster price for a service. The patient’s insurance plan covers a portion, if not all, of the costs of a procedure, item, or service. And then patients are responsible for the remaining balance.

“Chargemaster prices serve only as a starting point; adjustments to these prices are routinely made for contractual discounts that are negotiated with or set by third-party payers. Few patients actually pay the chargemaster price,” the Healthcare Financial Management Association (HMFA) explained to policymakers in May 2018.

READ MORE: CMS Clarifies Healthcare Price Transparency Rules for Hospitals

To truly promote healthcare price transparency, initiatives should shift their focus away from standard charges set by hospitals and instead work to share out-of-pocket cost information, the association argued.

“In our view, effective price transparency should involve the release of information that is clear, accessible, and actionable so that consumers easily can determine the cost of their premiums, deductibles, copayments, and non-covered services (out-of-pocket costs), prior to purchasing health insurance coverage as well as receiving medical services,” HFMA stated. “This will allow consumers to make meaningful comparisons to help inform patient-centered care choices.”

Healthcare providers in the PMMC and HBI survey shared similar concerns and those issues are informing their compliance strategies with the new hospital price transparency rule.

Most healthcare providers participating in the survey (43 percent) still do not know how they will address the mandate despite the January 1, 2019 deadline.

However, 66 percent of providers said they are somewhat confident that they will meet the mandate by the deadline, and 26 percent said they are very confident.

READ MORE: Is Billing Some Patients at Hospital Chargemaster Rates Legal?

Only eight percent said they were not confident that they would be able to publish their standard prices online by the new year.

More prepared providers are split on how they will publish their pricing information. About 22 percent of providers plan to just post their standard charges online per the hospital price transparency requirement.

But 29 percent of providers expect to publish additional pricing information alongside their standard charges. The respondents did not share what additional pricing information they plan to share.

But the survey report advised hospitals to present “personalized cost of care” information in conjunction with their standard charges. “This allows the hospital to control the price message and will prevent patients from potentially visiting a different provider in favor of a better price,” the report stated.

Technology can also help hospitals and other providers prepare for compliance with the hospital price transparency rule and other state laws requiring price transparency from providers. For example, Colorado requires providers to give patients a price list of their 15 most commonly delivered services, and hospitals in California must disclose prices for the top 26 outpatient services, as well as submit their chargemaster to a state-run website.

Software and other health IT systems that use historical claims data can help providers implement healthcare price transparency, explained Sean Lundy, CMPE, of the Hand & Wrist Center of Houston.

“It is critical for providers to use accurate estimates when collecting the patient responsibility, as inaccuracies can generate added follow-up expenses, such as refunds and bills, which may turn profitable procedures into losses,” he wrote.

“Since obtaining current allowable amounts directly from payers can be challenging, to say the least, providers should use software tools that assess historical data and estimate allowable expenses for specific payers and procedures,” he continued.

Educating staff and patients on how to use pricing information, such as standard charges, will also help hospitals respond to the price transparency requirements.

“As prices become more transparent, be prepared to explain why prices may be different for different care purchasers,” the HFMA stressed in a price transparency resource for providers.

When discussing prices with patients, the AHA also recommends that providers and staff emphasize that prices are estimates, notify patients of cost changes, explain what is and is not included in the price estimate, and tell patients about any other medical bills they may receive for the service.

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