nThrive Webinar recap: How to stay ahead of new price transparency requirements

By Kyle Sherseth, Vice President, nThrive Advisory Services | Posted: 02/03/2020

nThrive Price Transparency Webinar for Hospitals

Many of our health care clients are asking, “What can we do today to stay ahead of the new transparency requirements?” which go into effect January 1, 2021.  First, it is important to have a good understanding of the final ruling, followed by establishing key steps to prepare your hospital or health care organization for compliance. 

In our recent Webinar-on-Demand (WOD) we discussed:

  • The evolution of price transparency
  • A high-level overview on the rule and what health care organizations need to know
  • The rule’s finer details and who’s impacted in health care
  • Next steps to be compliant on January 1, 2021

While a year may seem like a long time to get your ducks in a row, it is not too soon to start thinking about how you're going to implement this new regulation in your medical organization.

Evolution of price transparency

Price Transparency regulations aren’t new, as states have been putting measures into place for some time now. For instance, California has required hospitals to release their gross charge information and put it on a state-run website since 2017. In Massachusetts, hospitals are required to release negotiated rates, as well.

Of course, adopting these types of regulations federally takes health care price transparency to a new level, pushing all states to provide everything from patient solutions charges and quality information to out-of-pocket patient estimates, aimed at helping patients make more informed health care choices while improving patient access and patient satisfaction.

What’s in the rule?

The Centers for Medicare and Medicaid Services (CMS) started the ball rolling on federal price transparency requirements in 2019, initially requiring hospitals to post their standard charges to the internet in a machine-readable format, updated at least annually. This remains in effect through December 31, 2020. From a practical standpoint, the rule entails posting the charge description master (CDM) to the hospital website, showing gross charges and list prices for patients to access.

In June 2019, President Trump signed an executive order outlining a more aggressive plan, with

CMS releasing the 2020 hospital Outpatient Prospective Payment System (OPPS) proposed rule in July 2019. This was adopted on November 15, 2019, despite a backlash of more than 1,400 comments from hospitals and health care organizations, which has since led to legal action (read our blog here on the lawsuit).

Breaking down the details

Effective January 1, 2021, if the ruling stands, hospitals will be required to include reimbursement information in the machine-readable chargemaster that is posted on their website. This includes standard, gross charges, payor-specific negotiated rates and self-pay cash prices. A $300-per-day penalty will be imposed for every day this information is not available online.

In addition, the ruling requires organizations to post gross charges and reimbursement rates for 300 “Shoppable Services” patients can schedule in advance. CMS has released 70 specific “Shoppable Services” that they want to see in the website format, with hospitals using their discretion on the additional 230. It is important to note that CMS will exempt the shoppable services requirement for hospitals that utilize a patient-facing cost estimator tool, like our industry-leading nThrive CarePricer Payment Estimator, to determine patient out-of-pocket costs.

Who should comply?

To ensure widespread compliance, CMS has more broadly defined what constitutes a hospital, going beyond bed count to any institution licensed as a hospital at the state level. This includes critical access hospitals, inpatient psychiatric facilities, rehab facilities, community hospitals and long-term care hospitals. Physician-owned facilities are included, meaning that their CDM information will also have to be posted online.

Not included are freestanding ambulatory centers associated with the hospital, however CMS is currently encouraging these entities to release the same information as their parent organizations. For patients to get a holistic out-of-pocket comparison between different entities, this information needs to be as available as well.

Federally owned hospitals are also excluded; for example, Veterans Administration (VA) hospitals aren’t required to post this information.

Detailing items and services

Items and services encompass any charge that's connected with taking care of a patient while they are in the hospital. This includes supplies for procedures, room and board charges and facility fees, as well as professional fees. All must be included in the machine readable CDM, including each Diagnosis-Related Group (DRG), Current Procedural Terminology (CPT) code and Activity-Based Costing (ABC) payor rates.

This level of specificity was not included in the 2019 regulation, but CMS wants to see it now. One question that came out during the comment period was, “Not every line in the CDM has a reimbursement rate, so how do we account for DRG and Healthcare Common Procedural Coding System (HCPCS) rates?” As a solution, CMS is considering packaged rates as part of standard charges that are listed in this machine-readable charge description master, but no real guidance has been provided specific to the new fields that may need to be included in the CDM.

Standardization will likely be key, enabling patients to more easily pick out the health solutions that they're receiving to find standard charge information.

Next steps to prepare

Since it is impossible to know the outcome of the impending lawsuit, our best recommendation is to focus on what best serves the patients’ financial experience, leveraging our powerful nThrive technology suite where possible to reduce or eliminate administrative burden while helping patients determine their out-of-pocket costs.

Here are things your hospital or health care organization can do today to get a head start on price transparency:

  1. Deploy a patient-facing estimator to provide patients with accurate, out-of-pocket estimates
  2. Take a hard look at your CDM to make sure it's compliant
  3. Determine if your CDM structure is defensible
  4. Review your charge capture practices
  5. Identifying risk areas and ensure that your pricing is in line with your market

At nThrive, we have the expertise and the solutions to help health care organizations prepare for the next wave of price transparency requirements. Ready to learn more? Visit nthrive.com/contact-us/, click Sales Questions, complete the short form and we’ll be in touch soon.