Are you prepared for price transparency? The countdown to 2019 is on and nThrive can help!

By Rebecca Marsh, M.B.A., CPC, CHC nThrive Vice President, Advisory Solutions | Posted: 11/07/2018

Price Transparency

The outcry for better health care transparency has intensified with the August release of the Inpatient Prospective Payment System (IPPS) rule by the Centers for Medicare and Medicaid Services (CMS). Effective January 1, 2019, this marks the first federally-regulated health care transparency rule, mandating hospitals to publish their standard charges online in a machine-readable, searchable format.

While some states already have legislated similar requirements, resulting in medical organizations publicly posting their Charge Description Master (CDM) data, this is just a starting point to satisfy the new federal requirements, which call for publishing the price of all items, services, and health solutions, including supplies and pharmacy items which do not typically have a price hard-coded in most Charge Description Masters.

Taking a holistic health care solutions approach

At nThrive, we recommend a holistic approach to better defend your Chargemaster data relative to the costs and the resources utilized for each medical service. This involves ensuring your CDM is compliant and structured to reflect industry best practice standards and published in a machine-readable format that readily links to your existing website. We also recommend including a disclaimer to enhance patient education and overall patient satisfaction. By doing so, patients will recognize that what they are seeing is a list price, and may not reflect their actual out-of-pocket costs.

Conducting a comprehensive review of your Chargemaster should include analyzing it from both a compliance and medical coding perspective. Completing a price transparency analysis on the data and validating it against recent industry benchmarks is integral to developing a competitive pricing strategy that proactively takes consumer-driven services into account.

Some questions you will want to ask, include:

  • Is the structure of my Chargemaster adequate?
  • Is the information contained within it accurate?
  • Does it reflect industry best practice standards?
  • Is our pricing related to the costs and resources utilized? Can we defend it?
  • How does it compare in the market based upon benchmarks?

At nThrive, we have found that doing a thorough risk analysis helps hospitals prepare criteria, policies and procedures around not only their Chargemaster structure, but their pricing model in general. Because there is no national criteria currently defining how hospitals should charge for services not defined by a CPT/HCPCS code, organizations must be able to defend their structure and justify pricing based upon the cost and resources utilized. All of this plays into how you develop your pricing year-over-year and address questions when they arise.

Advocating for national standards

Dating back to 2007 and beyond, Medicare has indicated an intent to develop national criteria for Evaluation and Management Services (E/M), however it is almost 2019 and they still do not exist. In addition to both clinic and emergency room levels, additional key high risk areas include routine nursing, daily room and board charges, equipment, billable versus non-billable supplies, and surgical services not traditionally defined by a current procedural terminology (CPT) or Healthcare Common Procedural Coding System (HCPCS) code.

Questions also exist on whether hospitals should disclose CPT or HCPCS details as part of the public reporting mandate, potentially breaching American Medical Association (AMA) licensure requirements, however clarification is expected before year end. Look for a statement on the AMA website: ama-assn.org.

Estimating patient responsibility

Along with addressing CDM issues and determining the appropriate level of data to publish (charge code, department, description, CPT/HCPCS code, primary price, etc.), health care organizations should also consider incorporating an estimator such as nThrive’s Carepricer, to accurately determine patient responsibility based on other variables such as insurance coverage. This is an important addition to help minimize patient confusion and complaints that might result from published pricing data while increasing your organization’s patient satisfaction.

While today’s estimators are typically utilized by a hospital employee at registration, nThrive’s CarePricer estimating tool also makes it is possible to create an external link, enabling patients to access a health care organization’s web portal to input procedure details and independently create an estimate on out-of-pocket costs.

Imagine going onto a hospital website and, in short order, getting a general sense of what a hip or knee replacement would cost. Having an external estimating component provides that next step to price compare.

Today, patients already routinely shop for services provided by freestanding imaging centers and emergency rooms that are not associated with a hospital network. Faced with high deductible health plans and lots of alternatives, shopping is becoming more prevalent as health care consumers prioritize value when considering health care dollars spent. Health care organizations must get onboard to compete with these other patient solutions.

In a very real sense, enacting federal transparency regulations could well be Medicare’s way of saying, “from a federal perspective, we’re going to make this a requirement, so people can make more informed choices.”

Look for more clarification in 2019

While no penalties or punitive consequences have been published yet by Medicare about the 2019 transparency requirements, it’s a safe bet they are not far behind. As is typically the case, Medicare will likely evaluate the compliance response in Q1 2019 and ask, “What did we really intend to have happen?” From there, they will likely refine the rule, making it more specific over time.

What’s important is to take steps early to meet the 2019 ruling requirements, not only to achieve compliance but to leverage transparency as a competitive advantage to better serve patients. Whether you are in state that already has some experience publishing pricing data, or are encountering it for the first time, there is much to be gained by preparing for what is sure to become the new normal.

Ready to take the next step toward price transparency? Download nThrive’s “Prepare for pricing transparency,” guide with more information on how nThrive can help your health care organization. To speak with an nThrive expert today, call us at 678-323-2500.