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News - Latest on Price Transparency

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What to Watch in 2020

As is usually the case at the beginning of a year, health care providers can expect new rules and regulation changes from the Department of Health and Human Services.

Recently, there has been significant policymaker focus on the issues of price transparency. Here’s a look how some of the changes could impact health care providers and insurance plans.

Hospitals Must Provide Standard Charges

As we discussed in last week's update, the OPPS rule will require hospitals to provide patients with clear, accessible information about their "standard charges" for the items and services they provide, including through the use of standardized data elements, making it easier to shop and compare across hospitals.

The final rule will require hospitals to make their standard charges public in two ways beginning in 2021:

  • Comprehensive Machine-Readable File
    Hospitals will be required to make public all hospital standard charges (including the gross charges, payer-specific negotiated charges, the amount the hospital is willing to accept in cash from a patient, and the minimum and maximum negotiated charges) for all items and services on the Internet in a single data file that can be read by other computer systems.

    The file must include 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 to provide common elements for consumers to compare standard charges from hospital to hospital.
  • Display of Shoppable Services in a Consumer-Friendly Manner
    Hospitals will be required to make public payer-specific negotiated charges, the amount the hospital is willing to accept in cash from a patient for an item or service, and the minimum and maximum negotiated charges for 300 common shoppable services in a manner that is consumer-friendly and update the information at least annually.

To ensure that hospitals comply with the requirements, the final rule provides CMS with new enforcement tools including monitoring, auditing, corrective action plans, and the ability to impose civil monetary penalties of $300 per day.

In response to public comments, CMS is finalizing that the effective date of the final rule will be January 1, 2021 to ensure that hospitals have the time to be compliant with these policies.

Shoppable Services

CMS defines "shoppable" services as a service package
that can be scheduled by a healthcare consumer in advance.
For example, x-rays, outpatient visits, laboratory tests,
or bundled services like a cesarean delivery.

Proposed Rule for Health Plans

The "Transparency in Coverage" rule would require most employer-based group health plans and health insurance issuers offering group and individual coverage to disclose price and cost-sharing information to participants, beneficiaries, and enrollees up front.

With this information, patients will have accurate estimates of any out-of-pocket costs they must pay to meet their plan's deductible, co-pay, or co-insurance requirements, according to the HHS press release. 

If finalized, the rule would require health insurance plans to:

  • Give consumers real-time, personalized access to cost-sharing information, including an estimate of their cost-sharing liability for all covered healthcare items and services, through an online tool that most group health plans and health insurance issuers would be required to make available to all of their members, and in paper form, at the consumer’s request. This requirement would empower consumers to shop and compare costs between specific providers before receiving care.

  • Disclose on a public website their negotiated rates for in-network providers and allowed amounts paid for out-of-network providers. Making this information available to the public is intended to drive innovation, support informed, price-conscious decision-making, and promote competition in the healthcare industry. Making this information public directly helps the consumer, but, more importantly, creates new opportunities for researchers, employers and other developers to build new tools to help consumers.

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How Providers Can Tackle Transparency

Industry experts suggest that hospitals and group practices may want to form a “Price Transparency Committee” that can be one aspect of handling price transparency.

They suggest including a small number of people at the highest level to be on the team – to keep it simple.

Consider using the American Hospital Association’s Principles for Price Transparency to form the task force, if you have not already done so. Within the task force, there should be a leader from the revenue cycle, chargemaster analyst, managed care, and business & data analytics, as well as a physician leader.

One of the top duties of a team would be to determine what price transparency means to the organization.

Next, look at the requirement, which is proposing that you put 300 machine-readable shoppable services on your website. 70 of those are pre-selected by CMS, so you’ll need to look at those 70 services listed and determine whether you provide them.

For a fact sheet on the Transparency in Coverage Proposed Rule (CMS-9915-P), please visit: 

CMS - Transparency in Coverage Proposed Rule

If you haven't already read last week's post, you may want to check out News - Latest Rules & Legislative Updates. It provides additional summaries on issues pertaining to price transparency, health IT and the Final Rule from the Centers for Medicare & Medicaid Services regarding the Medicare Physician Fee Schedule (MPFS).
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