Price Transparency Rules to Expand in 2020

Price transparency has continued to gain political momentum, especially in the last nine years since the passage of the Affordable Care Act. Consumers are using high-deductible plans, paying more out-of-pocket, and expecting to know their costs up front, before receiving care.

The Affordable Care Act first required hospital price transparency in March 2010. Now in 2019, Medicare requires chargemasters to be posted online. And by January 2020, after the Trump Administration issued an executive order this summer, hospitals will have to provide negotiated rates for shoppable services. Those hospitals that comply first and, perhaps, exceed any requirements should consider how their actions can help them better compete in their marketplaces, too.

Think about how you serve your patients today and how you can improve it in the future. More importantly, ask yourself: “What can I do now to prepare before seeing any finalized rules?”

There Will Be a Short Window to Comply

With the proposed rules and executive order, it’s clear that price transparency will remain on the nation’s docket. On September 27, 2019, public comment on the OPPS rule was due and, by January 1, 2020, new requirements will likely take effect. We will not know how the finalized proposed rule will look until November 2, 2019.  Waiting until then to completely steer your organization’s price transparency efforts isn’t a good option for many. It would take a chunk of time in itself to gain expertise in the matter let alone decide how to move forward before an early 2020 deadline.

What Can You do Now to Prepare?

While your facility may have complied with the previous Centers for Medicare and Medicaid Services (CMS) price transparency rule, is it ready to publicly and fully share and present prices to meet forthcoming regulations?

Price transparency will be legislated in some form and fashion. Hoping for this to go away is not a strategy. Make a commitment to become price transparent. You’ll have to consider an array of operational factors that will play into how you move your organization forward.

Tips to Get Started

The following are things you can begin implementing now as we await the final rule:

  • Look at the 2020 OPPS proposed rule
    Start by looking at the Medicare hospital outpatient prospective payment system (OPPS) for 2020. The policy, which was initially implemented in January, requires hospitals to post online a list of standard charges. Some of the reporting requirements include a description of item or service, standard charge, and negotiated rate. Information must be available in a single, digital, and machine-readable file. Hospitals will have discretion on internet location; however, it must be prominently displayed on a publicly available website. The file must include 70 “shoppable” services, as defined by CMS, and the charges must be displayed as a grouping of related ancillary items and services. There are some aspects that hospitals will have to still decide on how to report. It’s worth noting that CMS will shed public light on who isn’t compliant after self-initiating website audits. In addition, they will accept complaints and make them publicly available. This could be a major competitive disadvantage for your hospital.
  • Develop a price transparency committee
    Identify a team, at the highest level, but keep it simple. Too many members will prevent progress. Consider using the American Hospital Association’s Principles for Price Transparency to organize your task force, and posture your information in a way that is easy to access and understand for the patient.
  • Determine chargemaster and negotiated rate
    Even if the final rule does change before it goes into effect, the groundwork you lay now will be invaluable. Start with the 70 shoppable services, as defined by CMS, and then select 230 others to include, for a total of 300. These are services that can be scheduled by a patient in advance for non-urgent care and where patients will begin to shop around. These services should be in areas where you’ll want a competitive advantage. Decide which services are considered a commodity—which ones are at risk? Consider services like imaging, colonoscopies, laboratory tests, pharmacy, rehab services, emergency, etc.
  • Use business analytics
    Business analytics will help you determine what services are involved with the shoppable services. Your financial analyst will really need to look back at historical data to see what was grouped together with a named shoppable service. You’ll need time for this type of analysis.
  • Ensure you have consistency in pricing
    Before you can have price transparency, you need price consistency. Start by checking consistency across your organization: within a department, across departments, and across entities. Are you consistent? Can you defend your costs? These questions are worth considering since the first people to analyze an organization’s price transparency will probably be journalists. Expect media coverage.
  • Consider organizational readiness for information sharing
    How will you display the required information? How will consumers access your rates? You should really consider this from a patient’s perspective. Ideally, this will be displayed on your homepage, where your online tool can allow people to use a searchable database based on their diagnosis. You should also provide them the ability to see their out-of-pocket costs and schedule their procedure. If you take your price transparency efforts one step beyond whatever is eventually required, you can use is as your competitive advantage in your marketplace. Just be sure to make it easy for patients.
  • Develop policies and processes
    You will need to update some organizational policies to coincide with price transparency. Those to consider include out of pocket estimation, financial counseling, point of service collection, patient access accuracy, and eligibility.

Use Price Transparency as a Competitive Advantage

With the increased emphasis on price transparency, this is an issue you will have to face sooner than later. If that date is ultimately January 2020, that gives you only three months or less to compare. Protect your hospital by starting the process now and consider how you can use this to better compete in your market.

 

For more information, contact Healthcare Advisory Practice Leader at Valerie Barckhoff at vbarckhoff@windhambrannon.com

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