Implementing the new era of price transparency
Several months into CMS’ price transparency requirements, hospitals have had a chance to survey the landscape, but a clear picture is far from emerging. Although some hospitals have gone above and beyond the requirements, others have struggled to hit the right mark—and some have failed to fulfill the letter of the law. At the same time, many have pointed out that a lack of clarity in some portions of the rule may partially be to blame.
Revenue integrity professionals recognize that this is only the beginning of a new era. By comparing their organization to others and identifying best practices, they’re positioning themselves to improve compliance, refine processes, and lead the conversation on what price transparency truly means to patients and the industry.
A significant project
Preparing to comply with CMS’ price transparency requirements wasn’t simple. The Hospital Price Transparency final rule is complex and represents a major shift in how the industry operates. The emergence of the COVID-19 pandemic also monopolized hospitals’ attention, forcing them to redirect resources from price transparency and other projects. As the compliance deadline drew closer, revenue integrity professionals stepped up and put in the extra hours to ensure their organizations would meet CMS’ requirements by January 1.
A head start, a well-developed plan, and plenty of teamwork ensured Beaumont Health in Southfield, Michigan, was able to stay on track, says Meagan Windler, CHRI, corporate director, charge description master at Beaumont.
“We were able to work quickly and adapt, but we didn’t wait until the last minute to start. We knew what needed to happen, and those conversations had been going on throughout the year,” Windler says. “Like any other organization, everyone is feeling the financial impact of COVID. We just have to roll up our sleeves, and sometimes we just have to take on things that we maybe normally wouldn’t take on. That’s part of being with an organization and working with individuals who are willing and open to collaborate with each other.”
Meeting the requirements was a significant investment for every organization. CMS estimated that it would cost hospitals $1,200 and 150 hours to ensure their posted charges were accurate and up to date. However, experts agree that actual costs far outpaced the estimates.
“I can assure you that when it’s all said and done, we spent well more than 150 hours in total getting ready for this,” said NAHRI Advisory Board member Angela Lynne Simmons, CPA, vice president of revenue and reimbursement at Vanderbilt University Medical Center in Nashville, on the January 28 episode of The Revenue Integrity Show: A NAHRI Podcast. Simmons appeared on the episode with Grace Upleger, MBA, PMP, CPHIMS, director of patient financial services at Vanderbilt, and NAHRI Advisory Board member John D. Settlemyer, MBA, MHA, CPC, CHRI, associate vice president of revenue cycle at Atrium Health in Charlotte, North Carolina, to discuss implementing the requirements. “It was quite significantly more time and effort to get this ready, to interpret the rules, to understand them, and to make sure that we put Vanderbilt’s best face forward when presenting something to the public.”
Fulfilling the requirements demanded an interdisciplinary effort, with dozens of staff putting in hundreds of hours, Settlemyer agreed.
Organizations that worked with vendors to build price estimators and other tools to fulfill CMS’ requirements may have seen an even larger price tag, Upleger added.
Pulling together
CMS’ requirements are complex and call for collaboration and deep expertise across departments. As leader of Beaumont’s price transparency initiative, Windler brought together a team with representatives from compliance, managed care, finance, IT, material management, pharmacy, medical, and general counsel.
Compliance and legal, including outside counsel, provided critical assistance in analyzing and clarifying the rule and the organization’s responsibilities, Windler explains. Managed care worked to certify negotiated rates on the professional fee side, while on the hospital side they helped review files generated by Epic to ensure that the negotiated third-party payer rates were as accurate as possible.
She also brought in staff from the marketing department to ensure the organization was crafting a clear, unified message.
“Our marketing group was very hands on, making sure that for the procedures that were noted in the price estimator tool, there was a clear description,” Windler says. “Marketing also helped us make sure everything was in line on our website, that the links all worked, and everybody was on the same page as far as what the message was and information that was going to be made public for price transparency.”
Price transparency will be an ongoing project, so revenue integrity professionals need to have processes to support continuing maintenance. Files will need to be updated regularly, and organizations must stay abreast of changes to the rule. Windler has kept the conversation going at her organization to ensure they stay one step ahead. Throughout the year, she’ll be meeting with the same leaders who participated in the initial project to address significant changes to the chargemaster or alterations to the rule that could require additional action.
Getting an estimate
Providing price estimates to patients wasn’t completely foreign territory for many organizations, Upleger pointed out. Patients who scheduled a surgery at an organization could often obtain an estimate of their expected out-of-pocket costs. However, individuals who weren’t already patients with a scheduled procedure sometimes found it difficult to get price estimates and compare costs between facilities.
CMS aimed to address that in the rule by requiring hospitals to post a separate list of 300 shoppable services. Hospitals could also fulfill this requirement by offering a patient-facing price estimator tool.
Some organizations, such as Beaumont, were able to use price estimator tools that were already built into their EHR, Windler says. Even prior to the rule, Beaumont fleshed out its price estimator tool and can now offer more than 500 price estimates, she adds.
Organizations without that capability in their EHRs faced a difficult choice, Upleger said. These organizations needed to rely on their IT department to build a tool or partner with a vendor to provide one.
Aside from technical challenges, estimating the cost of a procedure or service isn’t always cut and dried. The price a patient actually pays for a service depends on many variables, Upleger said. For example, the listed charge for a service at an academic medical center that employs its physicians may be higher than the same service at a different hospital that doesn’t employ its physicians. Some patients may choose to schedule their procedure at the second hospital, believing that the price is truly lower and not understanding that they will also be billed for the physicians’ services.
This is challenging because although patients may accept that the price estimate and their actual cost may be different, they will expect the two to be as close as possible. And when patients compare prices across organizations, the variables in play may mean they’re not getting the whole picture.
“We were worried that it wasn’t always an oranges-to-oranges, apples-to-apples comparison and that it really had to be disclosed what that price actually includes,” Upleger said. “We […] have put out there on our shoppable estimates that this includes our professional and technical charges. We know some institutions don’t have one or the other because, for example, if they don’t have professional charges because they don’t employ their own physicians.”
The apparent price variance between organizations that employ physicians and those that don’t will likely cause confusion, Simmons agreed. Organizations that employ physicians are required to include those charges in their estimates and full machine-readable files. Those that do not aren’t required to provide any information on professional charges.
“The consumer is not going to be able to know which is which because I don’t think the average consumer is aware of the employment status of the physicians within a particular health system,” Simmons said. “I think that just lends for confusion and will cause the consumers to not understand. I think that’s something to pay attention to going forward.”
In addition, data accuracy and availability issues could further blur the picture for patients, Settlemyer pointed out. A quick scan of hospital websites reveals that not all of them interpreted the rule in the same manner and some are not compliant with one or more requirements. This will only add to patients’ confusion and make it more difficult for them to understand the information that is available.
Uncertain forecast
So, what’s next? Unfortunately, there’s no clear answer. In December 2020, CMS announced that in January 2021 it would begin auditing organizations for compliance with price transparency, although the agency did not announce when it expected to report the audit results. Individuals can also report noncompliant organizations to CMS. It’s not yet clear how the Biden administration will approach price transparency, said Ogi C. Kwon, JD, MHA, manager of regulatory compliance at R1 RCM in Chicago, during the January 26 NAHRI Quarterly Call. Revenue integrity professionals should remain alert for information on the audits and the potential for changes to the rule.
“With the new presidential administration, there may be a slight refocusing of enforcement and/or provider education around price transparency. Obviously, the previous administration had been largely involved in putting out a lot of the price transparency rules and regulations,” Kwon said. “Now while I believe that price transparency is here to stay, at least for now, I don’t believe that price transparency is necessarily a terribly partisan issue. It still remains to be seen exactly the way the current administration will be interpreting the nuances as it relates to price transparency, especially auditing and enforcement.”
Regardless, the cat is out of the bag: The public and payers have both had the opportunity to examine detailed hospital price information, and it will likely influence their behavior. Revenue integrity professionals need to closely monitor payer behavior and should listen closely to patients’ questions about prices and price estimates.
“We did hear from other institutions that there may be a concern payers may begin to take a firmer stance on hospital reimbursement seeing that that data is out there, particularly […] the machine-readable file, from payer to payer and code to code,” Upleger said. “We don’t know yet what that payer response is going to be.”
Organizations will be grappling with the financial impact of the pandemic for some time. With so much already uncertain, the broader effects of CMS’ price transparency requirements are impossible to predict. Revenue integrity professionals must continue to conduct regular monitoring and maintenance to keep their organizations in compliance. And they’ll also need to keep tabs on how CMS, commercial payers, and patients respond to develop sound pricing policies that are fair and sustainable.
Resources
Revenue integrity professionals can look to the following resources for more information: