Live Interactive Discussion Recap: The clock is ticking to meet federal price transparency mandates

By nThrive | Posted: 08/19/2020

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Price transparency is a hot topic in the health care industry today as the deadline fast approaches for health care organizations to be compliant. In a recent live interactive discussion, Kyle Sherseth, vice president, Advisory Services, conducted a live dialogue with attendees, responding to questions related to price transparency mandates, which go into effect on January 1, 2021.

Based on an initial polling question, more than half of the attendees said they had begun preparing for the new price transparency requirements but still had questions, while approximately 23% said that they had yet to begin. To the group who said they haven’t started, Sherseth commented, “You are not alone. We’ve talked to a lot of organizations who are just now beginning to think about these new regulations. You can still meet the deadline, but you need to begin preparing now.”

Here are just a few of the burning questions Kyle answered during the session:

Q: What is going to be required on January 1, 2021?

A: Under the current price transparency regulation, hospitals and health care organizations are required to post their standard charges in a machine-readable format on their website, which means posting a copy of your Charge Description Master (CDM) and your gross charges on your website. However, the Centers for Medicare and Medicaid Services (CMS) has redefined the term standard charges in the new regulation. On January 1, 2021, you not only will need to include the gross charge or list price from the CDM, but also your payor-specific negotiated rates, your self-pay cash price based on your policy, and your de-identified minimum/maximum negotiated rates across all of your commercial payors.

Q: Are payor negotiated rates based on current payor contracts or historical claims data?

A: The legislation requires health care organizations to display current payor rates and update the files annually to ensure posted rates stay current (government payors such as Medicare, Medicaid and TRICARE are exempt).

Q: What about the “shoppable services” requirement?

A: You’ll also be required to show 300 “shoppable services” in a consumer-friendly format (70 are defined by CMS; the remaining 230 are defined by the health care organization). CMS defines shoppable service as “a service package that can be scheduled by a health care consumer in advance, thus allowing patients to price shop and schedule the service at a time that is convenient for them.” CMS wants to see these shoppable services provided on your website in a format that enables patients to quickly access reimbursement rates for common procedures and determine their out-of-pocket expenses.

Q: Are hospitals required to include professional fees for providers as part of the shoppable service requirement?

A: The legislation states that professional fees for all clinicians practicing in hospital-based clinics are not required, however professional fees for physicians and non-physician practitioners employed by the hospital are required for inpatient or outpatient hospital services. The legislation states, “physicians and non-physician practitioners who are not employed by the hospital are practicing independently, establish their own charges for services, and receive the payment for their services; we do not believe the charges for their services fall within the scope of section 2718(e) of the PHS Act as they are not services ‘provided by the hospital.’”

Q: What about pharmacy and cancer center infusions?

A: If the pharmacy and cancer center infusion charges are incurred within the “hospital” as defined by CMS, these charges must be included.

Q: If we use an estimator, do we not need to post shoppable services on the machine-readable file?

A: If you use a patient-facing estimator tool, you are exempt from separately posting the 300 shoppable services file. However, you are still required to post the machine-readable CDM file that covers all items and services provided by your hospital.

Q: If using an estimator technology solution, is it okay for patients to enter their insurance information themselves, as opposed to using automated benefits responses for out-of-pocket responsibility?

A: Yes, based on our interpretation, giving the patient the option to enter their own benefits information is allowed. The only guidance provided by the price transparency legislation on entering information into the technology solution for shoppable services is that users cannot be required to use any form of account, username or password to access the tool.

Q: What about services/procedures that require multiple line items to come to a complete cost? How will everyday patients know what charges or services to combine for a complete cost estimate?

A: Within the machine-readable CDM file, it will be difficult to calculate a total cost as it is a listing of reimbursement rates and is not intended to reflect reimbursement methodologies to derive a total cost of care. The patient-facing estimation tool or the shoppable services file is the “consumer-friendly” component of the regulation and allows patients to see a complete cost estimate that takes into account any health solution charges or services (supplies, pharmacy charges, etc.) that are included in the payor-negotiated rate.

Q: Does the whole CDM have to be posted, even if you use an estimation tool?

A: Yes. The entire machine readable CDM must contain all charges, regardless of whether you choose to use a patient estimation tool to comply with the 300 shoppable services component.

Q: Will the $300 penalty be enforced if a hospital is only partially compliant by January 1, 2021?

A: The legislation does not specifically address health care facilities that are partially compliant, however, if CMS determines a facility is noncompliant, the facility will be given an opportunity to provide a corrective action plan. If your facility will not be fully compliant by January 1, 2021, we recommend posting a stop-gap file to show you are trying to move toward full price transparency compliance.

Q: What effect do you see price transparency having on the overall health care market in terms of relationships with payors and future contracted reimbursement rates?

A: The release of negotiated rates is likely to have a large impact on future contract negotiations when all rates are public. Competitor information will be utilized by both hospitals and insurance companies to create leverage. It remains to be seen if these requirements will have a positive or negative effect on the cost of care for patients and their respective health solutions.

At nThrive, we have the expertise, advisory services, and revenue cycle management technology solutions to help your hospital or health care organization prepare for the upcoming 2021 price transparency requirements. Are you ready to learn more? Visit nthrive.com/contact-us/, click Sales Questions, complete the short form and we’ll be in touch soon.