Transparency in pricing is considered by many to be essential to any competitive market, even in healthcare. In an effort to reduce healthcare costs and help patients make informed decisions, the Centers for Medicare and Medicaid Services (CMS) price transparency rule went into effect January 1, 2021. Now, nearly 6 months in, industry analysis suggests hospital compliance has room for improvement.
What is The Hospital Price Transparency rule?
According to CMS.gov, the rule requires all hospitals operating in the United States to provide clear, accessible pricing information online about the items and services they provide in two ways:
- As a comprehensive machine-readable file with all items and services
- In a display of shoppable services in a consumer-friendly format
The goal of the rule is to make it easier for consumers (patients) to shop across hospitals, estimate the cost of care in advance, and make informed decisions about their own healthcare. Making this complex cost information consumer-friendly is key to empowering patients.
Further, the rule requires that each service have certain corresponding data elements to enable patients to compare prices across facilities. These include:
- A plain language description of each service
- The payer-specific negotiated charge and the name of the payer associated with the charge
- Additional price information related to the service, including the discounted cash price and the de-identified maximum and minimum negotiated charge
- A list of all ancillary items and services (and their prices) that the hospitals provides with the shoppable service
- The location at which the services is provided
- Any primary code used by the hospitals for accounting or billing purposes, include CPT, HCPCS or DRG
CMS also encourages hospitals to provide any additional information that would maximize the consumer-friendly nature of their price estimator tools, such as notifying the consumer of any financial aid or payment plans available, and displaying the information in languages other than English to meet the needs of the communities and populations served.
Monitoring, enforcement, and potential penalties
In the final rule, CMS outlined a monitoring and enforcement plan for the requirements including audits of hospital websites, evaluations of complaints, and review of third-party analysis of noncompliance. Violations include failing to make standard charges public in the manner required by the price transparency rule, and providing the information in a patient-friendly format on the hospital website.
Hospitals found to be non-compliant will receive a written warning regarding specific violations, and are then expected to submit a correction plan directly to CMS. CMS may also impose a civil monetary penalty of up to $300 per day, as well as publicly post online which hospitals have not responded to requests for compliance or have not provided a plan to correct violations.
Mixed hospital compliance so far
In the last few months, many industry analysts have conducted surveys of hospital websites to gauge compliance with the CMS price transparency rule, and the takeaway is all the same: hospitals have some work to do. Results have shown that while many hospitals are posting some pricing information, none of them are completely compliant.
- In a recent study conducted by HealthAffairs, they found that 65% of the 100 largest hospitals are non-compliant in some way.
- Results from a separate analysis completed by the consulting firm, Guidehouse, polling more than 1,000 providers across 27 states found that 30% of hospitals weren’t complying with either the machine-readable file or consumer-friendly file method.
ADVI Analytics reviewed the websites of 20 of the largest hospitals and analysts identified common issues such as:
- Data was not downloadable in a useable format
- Hospitals not providing Healthcare Common Procedure Coding System (HCPCS) codes for services
- Variability in hospitals’ terms for the pricing information.
Many have cited challenges are due to a lack of resources available as a result of the COVID-19 pandemic, but still, lawmakers have expressed concern over the lack of compliance, urging the U.S. Department of Health and Human Services (HHS) to conduct regular audits and possibly revisit the amount of civil penalty. To reinforce the seriousness of this new rule, CMS began sending warning notices in April to hospitals that were audited and deemed non-compliant.
Taking steps towards consumer-friendly information and price transparency in healthcareWhile compliance with the new rule may feel daunting, hospitals already have much of this information in their electronic health record and claims processing systems. With the right tools, assembling and posting this information in a consumer-friendly way is achievable.
Leveraging a pre-mapped content set that translates industry standard codes such as HCPCS, CPT and ICD-10 to easy-to-understand language for consumers can remove the manual effort from hospital staff, and help make an important step forward on the road to better patient engagement and experience.
Contact us today to learn more about the Wolters Kluwer, Health Language Consumer Friendly Descriptions content set.