Hospitals across the U.S. are working to comply with the new CMS' price transparency rule.
The CMS final rule, which took effect Jan. 1, aims to make hospital pricing information readily available to patients to compare costs and make more informed healthcare decisions. To aid with this, hospitals in the U.S. are required to post both a machine-readable file with the negotiated rates for all items and services and display the prices of 300 shoppable services in a consumer-friendly format.
Meeting the deadline and maintaining compliance is no small feat for providers. CMS estimates that each hospital may spend 150 hours and nearly $12,000 to review and ensure their posted standard charges are accurate and up to date.
In an effort to better understand how hospitals prepared for the onset of the rule and some of the challenges that remain, Becker's reached out to several U.S. hospitals and health systems.
Here's what they had to say about the new regulation, including what they have done so far to comply and the challenges that remain:
Editor's Note: Responses have been edited for length and clarity.
Question: How has your organization prepared/worked to ensure compliance with the regulation?
Ali Santore, senior vice president of government affairs and social responsibility at Providence (Renton, Wash.) "Even before the rule went into effect, our hospitals already were generating customized out-of-pocket estimates for our patients. Expanding on this service, we now offer an online pricing estimator tool on each hospital website. This self-serve tool enables our patients to get a personalized out-of-pocket estimate for at least 300 services based on their insurance coverage and preferred Providence hospital. Consumers not currently served by Providence can also get estimates by entering their insurance details into the online tool. The estimator only provides individual estimates based on information provided by patients or consumers. This tool also meets the requirements for posting discounted cash prices available to uninsured patients."
Dennis Dahlen, CFO of Mayo Clinic (Rochester, Minn.) "Mayo Clinic has offered an online cost estimator tool for several years. The tool, cited as one of the best available by the CMS administrator, has been a resource for patients at our destination centers in Arizona, Florida and Minnesota, and similar information for patients at Mayo Clinic Health System sites is now online as well."
Ryan Schultz, associate vice president of finance, UAB Medicine (Birmingham, Ala.) "In February of 2020, UAB Medicine established a cross-functional steering committee and project management team to address the requirements as outlined within the 2020 OPPS final rule. While the ability to quickly organize resources and dedicate significant human capital hours were critical to our ability to meet the deadline, having priority and support from executive leadership to meet the mandate by Jan. 1, 2021, was an important element to success.
UAB Medicine also actively participated in several price transparency working groups, allowing providers to share experiences and regulatory interpretation, and implemented an online estimate tool. Populated with over 300 shoppable services, the tool will allow consumers the ability to provide insurance information and receive a customized estimate based on individual coverage terms. This tool will allow UAB Medicine to engage consumers in a manner that demonstrates transparency and builds trust and accountability between provider and patient."
Kimberly Scaccia, vice president of revenue cycle for Mercyhealth (Janesville, Wis.) "We have an extraordinarily large EHR, and they were not ready, so we had to utilize an external vendor for a lot of things. We've done a lot of training, a lot of testing, and we've also done a lot of complaining to our electronic health vendor about the applications not working. I've said from day one this is another example of the government putting undue administrative burdens on hospitals and healthcare systems for no value. The only people who are going to get value out of this are the insurance companies. They're the only ones who are going to win anything out of this because a patient first is going to go where their doctor tells them to, and second, if they are shopping for services, they are going to call. Even with the information online, as an estimate, it clearly states that a patient should call. We cannot give a patient an accurate estimate without validating and verifying everything, and patients don't know how to do that.
Patients don't know how to tell us if they are in a managed care plan PPO plan or if they have met their deductible requirements. We at Mercy have done everything we can to prepare for it. We're in Illinois and Wisconsin, so we've stayed in contact with the Illinois and Wisconsin hospital associations as well. We have a large group of IT folks who have been involved with the Epic application all year and who honestly are some of the best IT people I've ever worked with. We're in compliance, but it's one of those things I think will sit out on our website, with very few hits, and is going to be a waste of time, resources and money."
Richard Miller, executive vice president and chief business strategy officer of Northwell Health (New Hyde Park, N.Y.) "About a decade ago, Northwell became the first health system in metropolitan New York to offer patients an online price estimator. Since then we have continued to devote time and resources to this effort, and believe that with high-deductible plans exposing our community to greater cost-sharing obligations it’s more important than ever for our patients to be able to get an estimate of their out-of-pocket costs before they receive care.
Most recently, we invested approximately $2 million in a state-of-the-art online cost estimator, which more than satisfies the CMS requirement for a listing of prices for 300 shoppable services. This tool, which we launched last year, pings a patient’s insurance carrier for the specifics of the individual’s plan, their copay and where they are in meeting their yearly deductible, so it produces an estimate that’s personalized, up to date and as accurate as possible. We also make available on our website a full and updated list of our charges in a machine-readable form — our chargemaster."
Steve Schooff, director of external communications of Froedtert Health (Wauwatosa, Wis.) "In 2016, we introduced a healthcare cost estimation telephone consultation service, then added a self-service tool on froedtert.com in 2019. The cost estimation tool is an excellent resource for healthcare consumers seeking price and cost information. To meet the new requirements, we enhanced our existing online cost estimation service with two new features.
First, we’ve updated the service to include a machine-readable file as required by CMS. Detailed pricing data for all items and services in the cost estimation tool will be published on our website in this file format, which can be imported or read into a computer system for further processing. For example, a user will now be able to import information from the file into a computer program such as Excel.
Second, we’ve expanded our existing cost estimation tool to provide specific estimates for more than 300 services at each hospital in the Froedtert & MCW health network. While the new rule requires just the posting of hospital fees, both professional fees and hospital fees are included in the tool as a convenience to consumers."
Kaiser Permanente (Oakland, Calif.) "To support our members, we developed easy-to-use cost estimate tools that allow them to obtain a personalized estimate of their out-of-pocket costs for common clinical services as well as expected costs for their prescription drugs.
In addition to these tools, Kaiser Permanente provides federally mandated information on five standard charges for all hospital services and items. This information is available in downloadable spreadsheets on KP.org. Starting on Jan.1, we also provided government-required pricing for 300 hospital-related shoppable services. In markets where we operate hospitals, each Kaiser Permanente hospital's dedicated webpage on KP.org will include the shoppable services pricing data in a downloadable spreadsheet."
Bethany Pope, media relations manager at Mercy (St. Louis). "Mercy currently has a list of shoppable services available on mercy.net. These estimates have been available in the past. However, having them available online will make the process easier for our patients."
Question: What challenges remain in ensuring compliance?
Ali Santore: "It was definitely challenging to respond to the rule in the middle of a pandemic, given that we have all hands on deck to care for thousands of patients. We actually went beyond what is required under CMS transparency regulations for shoppable services. While the price estimator was complex and required significant resources, it relieves patients from having to manually sort through complicated lists of charges and prices that do not reflect their personal costs. The information patients and consumers want most is the amount they will actually be billed or asked to pay, so we went the extra mile and expanded our existing services. We support the overall intent to increase transparency for consumers and are hopeful that future policy direction will encourage collaborative solutions in the best interests of all health care consumers."
Dennis Dahlen: "The price for any service that a patient pays depends upon several factors, and we encourage patients to consider all relevant factors, including outcomes, experience and overall cost of care, when selecting their medical provider. We are working diligently to compile information on our negotiated rates and expect to post that information in early 2021. Mayo Clinic is committed to providing high-quality, high-value care for all its patients, and to ensure that financial considerations are not an obstacle between patients and the care they need."
Ryan Schultz: "First and foremost, the 2020 OPPS rule was not the curtain call for price transparency. Hospitals now have to provide Medicare Advantage median pricing data as required in the 2021 IPPS final rule. This, along with required annual updates to information released Jan. 1, should keep hospitals engaged in price transparency efforts for the foreseeable future.
This is the first time providers and payers will be privy to information historically considered highly confidential. Will we begin to see payers begin to take a firmer stance around hospital reimbursement? Could price disclosures result in increased cost as hospitals seek higher or more competitive payment rates? Could disclosure increase the risk for industry participants to engage in activity that could violate antitrust statutes? Will this information unfairly paint academic medical centers as “high cost” with no consideration for the cost of activities such as teaching? These are but a few of the unanswered questions.
In addition to challenges inside the healthcare industry, hospitals will have to engage external consumers as they begin to make sense of the terabytes of information that now exist online in the form of standard charge files and shoppable service lists or online estimate tools. In this regard, hospitals will have to be both creative and pragmatic. Those within the healthcare industry understand the complexity of variables and interactions required to establish pricing and negotiate with payers in an effort to remain financially viable. The challenge will be how to translate that into easily understandable language to avoid creating confusion and exacerbating public frustration."
Richard Miller: "We are working to comply with the new CMS requirement to post a more robust machine-readable list of standard hospital charges, including gross and payer-negotiated rates. This list requires an analysis of more than 200 million data points, and we are working toward posting it as soon as possible — while also, like healthcare institutions around the country, focusing on the rollout of the COVID-19 vaccines and meeting the needs of large numbers of seriously ill patients."
Kelly Gooch contributed to this article.