Is Your Hospital Ready to Comply With the New CMS Price Transparency Requirements?
On August 2, 2018, the Centers for Medicare & Medicaid Services (CMS) issued an inpatient final rule that included requirements for hospitals to make public via the internet, a list of their standard charges. The policies in the inpatient final rule advance CMS’ priority of achieving greater price transparency. Under the current law, hospitals were only required to establish and make public a list of their standard charges. In an effort to encourage greater price transparency by improving public accessibility to charge information, effective January 1, 2019, CMS has updated its guidelines to require hospitals to make public a list of their standard charges via the internet in a machine-readable and searchable format, and to update this information at least annually.
CMS has clarified through their “Frequently asked Questions Regarding Requirements for Hospitals to Make Public a List of their Standard Charges Via the Internet” with the following additional information:
- The format of the public list of standard charges is the hospital’s choice as long as the information represents the hospital’s current standard charges as reflected in the hospital’s chargemaster;
- The requirements apply to all items and services provided by the hospital;
- CMS encourages hospitals to undertake efforts to engage in consumer-friendly communication of their charges to help patients understand their potential financial liability for services, and to enable patients to compare charges for similar services across hospitals.
- A hospital is not precluded from posting quality information or price transparency information in addition to its current standard charges in its chargemaster;
- A machine readable format is a digitally accessible document but more narrowly defined to include only formats that can be easily imported and read into a computer system (i.e., XML, CSV). A PDF document cannot be easily imported or read into a computer system;
- There are no hospitals operating within the United States with exemptions from this requirement; and
- Hospitals who participate in a state online price transparency initiative are not exempt from satisfying all federal requirements.
CMS is also concerned that challenges continue for patients due to insufficient price transparency including being surprised by out of network bills for physicians involved in hospital care such as: anesthesiologists, radiologists and emergency room physicians. CMS is now seeking public comments on the following topics for consideration in future rulemaking:
- What are the barriers preventing providers from informing patients of their out-of-pocket costs?
- What changes are needed to support greater transparency around patient obligations for their out-of-pocket costs?
- What can be done to better inform patients of these obligations?
- What role should providers play in this initiative?
Overall, there are a lot of mixed opinions in the industry regarding the new requirement. Many are concerned regarding how their charges will be perceived by healthcare consumers as it is expected that the new transparency requirements will reveal significant variations in charges between hospitals. There is also concern because the new requirements only address the cost of a test but does not address what is most important to the healthcare consumer, and that is “what is the cost to me”. For example, if a patient requires a knee replacement, there is not enough information when looking solely at a hospital chargemaster to determine the charges that will be billed, and most importantly what the insurance company will pay based on the specific patients health insurance.
With the advent of High Deduction Health Plans (HDHP) over ten years ago, the patients responsibility amount continues to increase so it is understandable that there is an urgent need for meaningful and transparent information. Unfortunately, many providers feel the new CMS requirement alone only gives part of the equation to healthcare consumers and others feel the CMS language is too vague and providers will interpret the regulations differently.
Hospitals may need to evaluate their overall price transparency approach as they roll out their efforts to comply with CMS’ newest mandate. Some hospital approaches consist of the following:
- Publish prices in addition to policies and instructions for accessing. Some include direct access to a hospital employee;
- Integrate data quality rankings into the pricing information that is shared;
- The implementation of cost estimator tools that will address the issue of communicating the cost for a particular service based on the patients individual insurance;
- Explore enhanced real-time APP functionality for easy use with smart phones and tablets that will allow patients to access the total cost of hospital services;
- Utilize existing call centers with financial experts who are readily available to educate patients on what their costs will be;
- Development of a marketing strategy to increase general awareness of your hospitals cost estimator tools; and
- Monitoring of how patients are accessing your current price transparency tools. This will assist in refining what is available and the future changes that are needed.
Some hospital’s have made significant strides in improving price transparency over the past few years. Pricing services and technology advances, in addition to a cohesive strategy are all components to achieving this goal. It is evident that these newest efforts by CMS are part of a much larger effort to empower patients and we can expect more and more requirements from CMS in the future as they continue to analyze more data and obtain comments from hospital providers.
Recommendations
- Re-evaluate your hospitals overall price transparency strategy; and
- Monitor regularly and benchmark monthly the number of patient website inquiries following the 1/1/19 CMS change.
- If only chargemaster prices were provided to meet the 1/1/19 deadline, explore adding charges at a case level after the deadline. Also explore adding policies and instructions for patient access as a Phase Two of this CMS price transparency change.