Time is of the essence to meet 2021 price transparency mandates

By Kyle Sherseth, Vice President, nThrive Advisory Services | Posted: 07/07/2020

nThrive price transparency solutions to be compliant

U.S. District Court Judge Carl Nichols set the clock ticking on June 23rd when he ruled in favor of price transparency requirements mandating hospitals to reveal private, negotiated rates beginning January 1, 2021. Largely in a “wait and see” mode, hospitals and health care organizations must now play catch up to be compliant by the turn of the new year.

Unfortunately, there is no quick fix to meet the mandated year-end deadline. Complying will require process and technology implementations with typical cycle times of four to five months to fully bring up. With just six months left in 2020, time is of the essence and nThrive’s industry leading revenue cycle management solutions can help you succeed.

The 2020 Final Rule on Price Transparency

To understand how to move forward and achieve price transparency at your health care organization, let’s review the four key ruling requirements as they stand:

  1. Include all “standard charges,” including negotiated rate information, in a machine-readable website Charge Description Master (CDM) at the individual charge level and by service package (DRG, APC, etc.)
  2. Post negotiated rate and self-pay information for all core and ancillary charges associated with 300 “shoppable services” in a “consumer friendly” format
    • Hospitals with patient-facing estimation technology are exempt if they can provide estimates for at least 300 shoppable services
  3. Include specific CDM information in the machine-readable file and post the information in an easily accessible location on the hospital website
  4. Comply or be subject to a $300/day penalty

To meet the first two requirements, it is important to define “standard charges,” which is a term from the Affordable Care Act that Health and Human Services (HHS) has redefined to include:

  1. Gross charge – The charge for an individual item or service that is reflected on a hospital’s chargemaster, absent any discounts
  2. Discounted cash price – The charge that applies to an individual who pays cash, or cash equivalent, for a hospital item or service
  3. Payer-specific negotiated rate – The rate that a hospital has negotiated with a third-party payer for an item or service
  4. De-identified minimum negotiated rate – The lowest rate that a hospital has negotiated with all third-party payers for an item or service
  5. De-identified maximum negotiated rate – The highest rate that a hospital has negotiated with all third-party payers for an item or service

ALL standard charges (meaning ALL the above) must be included in the machine-readable charge description master (CDM) provided on your hospital website by January 1, 2021. Exceptions include government reimbursement rates (Medicare, Medicaid, TRICARE, VA, etc.) since they are not negotiated and already available to the public.

Price transparency preparation

nThrive recommends five things health care organizations should do today to be ready for Price Transparency in January. These include:

  1. Identify areas of risk and opportunities to improve your CDM structure
  2. Ensure your CDM reflects accurate, compliant billing
  3. Review pricing to ensure optimal market positioning
  4. Update your machine-readable CDM with ALL standard charge data
  5. Create the “consumer-friendly” shoppable services file or deploy estimation technology to allow patients to pull their out-of-pocket cost themselves on the internet

Making it happen

Given the short window to execute, it is important to seek guidance from a demonstrated expert on interpretation and implementation of regulatory requirements. You may also need expert help responding to inquiries related to regulatory requirements.

Creating a machine-readable CDM with required standard charge data is the next big lift, and the information included in file should be backed up by policies to defend the CDM structure, pricing methodologies and compliance with price transparency regulation requirements.

In addition, you’ll need to develop packaged service groupings for 300 shoppable services in a consumer-friendly format with standard charge information for the primary service and common ancillary charges. Implementing an online estimation tool such as nThrive CarePricer Payment Estimator is strongly advised, both to meet the shoppable services requirement and better facilitate consumerism.

Will the regulation be delayed?

There has been much speculation that the COVID-19 public health emergency or the pending lawsuit would delay implementation of the price transparency regulations. At this point, there is no indication that the timeline will be delayed, and there has recently been a push on Capitol Hill to codify the price transparency regulations as part of an economic stimulus package. A draft version of the CARES act included these requirements, but they were removed from the final bill that Congress passed. There has recently been talk about including the requirements in a new stimulus package currently under negotiation. If these price transparency requirements become codified law, then they will be much more difficult to overturn in the courts.

The current AHA lawsuit, which argues the HHS price transparency requirements are unconstitutional, faced initial defeat in the federal courts, but an appeal has already been filed. While there is still a chance to overturn these requirements through legal avenues, hospitals should not count on this outcome. At nThrive, we recommend that hospitals and health care organizations across the country begin preparing now and assume the requirements will go into effect on January 1, 2021, as planned.

Meeting the deadline

While this may seem like a massive amount of work in a short amount of time, the good news is that you still have time to fully prepare for the 2021 price transparency requirements, eliminating the risk of fines and, more importantly, better meeting patient needs while improving patient satisfaction. It doesn’t look like price transparency requirements are going anywhere and you could argue that COVID-19 has made it more relevant than ever.

At nThrive, we have the technology expertise, revenue cycle management and price transparency solutions to help your hospital or health care organizations 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.