Independent practices should take this opportunity to get ahead of price transparency before a mandate forces them into the same situation in which unprepared hospitals now find themselves.
Despite fighting hard against it, hospitals now have only a few months left to comply with a looming price transparency final rule from the Center for Medicare and Medicaid Services.
Many hospitals are scrambling—during a global pandemic, no less—to comply with the rule by January 1, 2021, or face a $300 per day fine for non-compliance.
Independent practices might be breathing a sigh of relief that this rule doesn’t apply to them, but that’s a shortsighted viewpoint. Instead, they should take this opportunity to get ahead of price transparency before a mandate forces them into the same situation in which unprepared hospitals now find themselves.
The final rule will require hospitals to provide price transparency information in two ways.
First: A “comprehensive machine-readable file” which can be read by many different computer systems. The file must include five types of standard charges, one of which is the hospital’s negotiated payer rates. These rates have historically been kept confidential, and hospitals worry that revealing them will negatively affect their future negotiations with insurers.
Second: A consumer-friendly price list for 300 “shoppable” services, i.e., services that can be scheduled in advance. Seventy of those services are specified by CMS; hospitals can choose for themselves the other 230.
In addition to saying that it puts them at a negotiating disadvantage, hospitals argue that the rule is burdensome—especially during the pandemic—and flawed because it won’t truly help consumers understand what they’ll be required to pay out of pocket.
However, in June, a federal court rejected a lawsuit from the American Hospital Association, the Association of American Medical Colleges, the Children's Hospital Association, and the Federation of American Hospitals and upheld the rule.
Although hospitals might be the first entities to be hit with a price transparency requirement, they may not be the last. The rule could have a ripple effect that goes beyond hospitals to impact all types of healthcare facilities. Already, for instance, there’s a "Transparency in Coverage" proposed rule that would apply to insurers.
In particular, the CMS hospital rule’s focus on “shoppable” services should raise a warning bell that independent physician practices could be the next focus of a price transparency push, since scheduled services are often their core offering.
Even without a requirement forcing physician practices to act, consumers who grow accustomed to healthcare price transparency will likely come to expect accurate cost estimates from all providers, not only hospitals. Independent practices that provide accurate price estimates and can easily prove transparent pricing will no doubt have a competitive advantage over those that don’t.
There are several factors that providers should consider at an operational level when it comes to price transparency, and they all require considering the healthcare experience from a consumer perspective.
Patients are already on the phone at the time of scheduling so use that opportunity to give consumers personalized cost information prior to their service. Use a tool that can generate accurate eligibility, estimates, and payment information.
Upfront estimates can help practices stay ahead of post-service collection headaches. If a patient says they can’t pay the estimated amount, set up a payment plan in advance of service or connect patients with financial counseling services.
Savvy patients may do online price comparison shopping before they ever call or email to make an appointment or schedule a procedure. Offer an online, self-service price estimator that allows patients to enter the procedure that they’re shopping for, along with their own demographic and insurance information.
Simply publishing a list of how much procedures cost won’t help patients understand what they’ll truly pay. Instead, tailor price transparency efforts to each patient using their insurance coverage.
Help patients understand the basics of insurance coverage. An easy-to-read, patient friendly primer on common insurance terms like deductible, co-pay, and co-insurance can help build trust and ensure that patients can decipher—and pay—their bills.