Recommendations to Providers on Price Transparency Priorities to Address Now
Read Unpacking CMS’ 2020 Proposed Expanded Rules for Hospital Price Transparency to gain a better understanding of the Proposed Rules for Hospital Price Transparency released by CMS on July 29, 2019. The comment period ended September 27, 2019, and the final rule is forthcoming.
After review of public comments on the proposed Hospital Price Transparency Rule, CMS will certainly move forward with some version of expanded rules for price transparency. Stakeholders should expect a patient population prepared to shop their options and a regulatory agency prepared to enforce the rules.
In the proposed rule, CMS states that “a number of insured consumers are finding that some services are more affordable if the consumer chooses to forego insurance” and pay out-of-pocket or as a self-pay. We agree that this is occurring due to the advent of high deductible plans, and patients increasingly are shopping. For this and other reasons, it is increasingly important for providers to implement and continuously monitor and update their chargemaster prices so that the most shoppable items are competitive or at least rational and defensible.
While some argue transparency will foment a race to the bottom, we believe recent CMS Price and Quality Transparency initiatives and consumer behavior provides the impetus for proactive health systems to take a serious look at the competitiveness of their charges and the profitability of their payer contracts. Forward thinking providers should develop consumer friendly technology to present their data in a manner that goes beyond the CMS requirement providing the consumer with the information they need while presenting the provider services in the most favorable light.
Panacea has established the following essential priorities for providers to address now:
- Ensure their hospital and employed physician and non-physician practitioner charges are rational and defensible
- Identify for each provider within a health system the 300 non-urgent shoppable procedures taking into account utilization and other criterion. Be sure to first isolate the 70 required by CMS
- Adjust line item charges if necessary, for shoppable procedures to be more defensible or competitive however NEVER change a price without sophisticated net revenue modeling first being performed at the CDM line item and if necessary, claims level (for case rate lesser-of and stop-loss impact modeling).
- Create low, mid and high average charge and payment profiles for shoppable items at payer plan code level as more user-friendly supplement to the final CMS requirement.
- Create summary of negotiated rates by payer for shoppable items and determine how best to present to consumer.
- Consider posting cash discount options (CMS suggests this) however consider payer restrictions if applicable.
- Consider adding annual volume, quality and comparative pricing data to the consumer online pages for shoppable items where adding such information will provide the consumer with information that goes beyond the current CMS requirement
- Begin discussion with IT department regarding the expanded requirements obtain the exact specifications from CMS website when final rule is published. There will be specific requirements for both the machine-readable file for ALL SERVICES and the presentation of data for the “shoppable items.”
About Panacea
Panacea is the nation’s leader in hospital, physician and pharmacy transparent pricing technology and services. Its Hospital Zero-Base Pricing® and Physician Pricing system, and other CDM modules, for more than six years, has received the coveted Healthcare Financial Management Association Peer Review Status.
