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Hospital Price Transparency Measures Coming From CMS

The Pricing and Quality Transparency Executive Order (EO) recently signed by President Trump could mean price transparency like the public has not yet seen. The goal, of course, is to make patients better-informed consumers of healthcare services by comparing prices before selecting a provider and facility. Furthermore, “the Centers for Medicare & Medicaid Services (CMS) has taken bold actions to implement key elements of the EO. CMS is proposing historic changes on hospital price and quality. The rule proposes price transparency requirements that will increase competition among all hospitals by requiring them to make pricing information publically available to help patients shop for healthcare that meets their needs and budgets.” (*)

These price transparency measures plus the Medicare Procedure Price Lookup tool already available to beneficiaries put patients in the driver’s seat when managing their care relative to their budget by more fully understanding their out-of-pocket (OOP) costs.

The proposals for the calendar year (CY) 2020 includes historic changes that would require hospitals to take the following actions:

  • Make public their “standard charges” (defined as two types of charges: gross charges and payer-specific negotiated charges) for all items and services provided by the hospital.
  • Make public standard charges on the Internet in a machine-readable file that includes additional information such as common billing or accounting codes used by the hospital (such as Healthcare Common Procedure Coding System (HCPCS) codes) and a description of the item or service. This provides a common framework for comparing standard charges from hospital to hospital.
  • Make public payer-specific negotiated charges for common shoppable services in a manner that is consumer-friendly.
    • “Shoppable” services are services that can be scheduled by a health care consumer in advance. Examples of shoppable services include x-rays, outpatient visits, imaging and laboratory tests or bundled services like a cesarean delivery, including pre-and post-delivery care.
    • Consumer-friendly means the hospital charge information must be made public in a prominent location online (or in written form upon request) that it is easily accessible, without barriers, and searchable. It also means the service descriptions are in ‘plain language’ and the shoppable service charges are displayed and grouped with charges for any ancillary services the hospital customarily provides with the primary shoppable service.

Possible Issues

While it sounds like these measures could produce nothing but positive outcomes, there are some possible issues to consider. Disclosure of provider-specific negotiated rates could cause a reverse effect on competition and increase consumer pricing. Because of this, CMS is soliciting feedback in ways to prevent this adverse side effect. Also, quality transparency is apart of this initiative as well, but it is much harder to quantify and provide to consumers in a useful way. These issues will need to be sorted out before implementation, but hospitals need to have an idea of what is coming so they can remain compliant.

Trump Administration Announces Historic Price Transparency Requirements to Increase Competition and Lower Healthcare Costs for All Americans

November 15, 2019 ruling will be a significant change to American healthcare markets. It will shine the  light on the costs of our healthcare system and hopefully finally putting the American patient in control. Stay tuned we have more info to come!

Looking Forward

CY 2020 will be here quickly. It is essential to consider how these changes will affect your organization and how the implementation will take place. Especially since noncompliance can result in corrective action plans and civil monetary penalties of $300 per day, make sure you have the right team in place to manage this new policy implementation.

Sunlit Cove Healthcare can help you implement price transparency requirements, keeping your organization compliant. Give us a call to get started.

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Sunlit Cove Healthcare Consultants

We provide management and consulting services to help healthcare businesses run efficiently. Navigating the dynamic and complex revenue cycle management is a challenge for many health plans, health care vendors, and providers. Our consulting services are available to assist with your day-to-day operations and provide expertise in growth and change management. We manage all aspects of your enterprise from the development of the revenue cycle management process to the completion of your business cycle.

Related: Policy and Procedure Development and Implementation