Hospital Revenue Cycle Readiness Series: Price Transparency – Part One

By Valerie Barckhoff

Today, we begin our series of blog posts dedicated to the topic of ensuring your hospital is ready to navigate the complexities of today’s healthcare revenue cycle. Managing the revenue cycle has become a challenge for any healthcare organization. A “perfect storm” of financial disruption is impacting hospitals today, from reduced Medicare reimbursements to escalating costs and staffing shortages to changes associated with the Affordable Care Act and other legislation. Hospitals, particularly those in rural areas, find themselves under great pressures to be efficient and effective in all aspects of the revenue cycle.

This first installment of our 10-part blog series focuses on price transparency. The ability for patients (consumers) to understand their potential out-of-pocket expenses has become more important as they take on more of the responsibility for payment. Payers are increasingly shifting more financial responsibility to patients through high-deductible health insurance plans in an effort to curb healthcare spending. As of January 2017, 52 health insurance providers reported 21.8 million high-deductible health plan (HDHP) and health savings account (HSA) enrollees, up from 20.2 million in 2016, according to research from America’s Health Insurance Plans (AHIP), the national trade association representing the health insurance community. 

Price-transparency requirements for hospitals currently exist under the Affordable Care Act. However, compliance hasn’t exactly been enforced. Hospitals are supposed to develop, publically list and maintain updates of standard charges for items and services provided―but none of the requirements outline how hospitals should publish the information. To address that, the Centers for Medicare and Medicaid Services (CMS) is proposing a new rule that makes it mandatory for hospitals to make public a list of their current standard charges through the internet by Jan. 1, 2019, with additional requirements for annual updates.

Today’s patients who are taking on more financial responsibility expect their healthcare experience to emulate their online retail experience where prices are readily available to allow for easy comparison shopping. Unfortunately, hospitals lack the necessary tools and resources to provide the price transparency patients are looking for. 
Research shows approximately 63 percent of providers reported challenges with offering healthcare price transparency for patients. Many providers report not having patient-facing cost-estimation tools; the necessary staff to address price concerns; and the inability to provide convenient payment options, such as automatic payments or online bill pay. In fact, a recent price-transparency report revealed that 43 states received a failing grade for their inability to meet minimum standards for healthcare price transparency.

Complying with existing―and future―price-transparency requirements requires a thoughtful, methodical approach that will give patients the necessary answers to their questions about healthcare prices. The steps to developing a successful approach to price transparency should include:
  • Form a price-transparency task force
  • Analyze the current marketplace
  • Evaluate staffing resources as well as available services and technology tools
Additional steps are available for Revenue Cycle Consortium members. For rural hospitals and healthcare facilities struggling with financial challenges and revenue-cycle issues, the Consortium can provide additional assistance through more in-depth consultation; access to more tools and educational resources; and shared best practices regarding price transparency. The Consortium is a membership model designed to be a cost-effective way for hospitals to identify and realize true cash, net-revenue opportunities, and establish preventative measures to ensure compliance regulations are met consistently.

Click here for immediate information on how the Revenue Cycle Consortium can assist your hospital or healthcare facility with price transparency challenges, or contact Windham Brannon Healthcare Practice Leader Valerie Barckhoff at vbarckhoff@windhambrannon.com.