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New Hospital Pricing Transparency Regulations

By Keith Givand, Consultant, Financial Reimbursement Services

On November 15, 2019, the Centers for Medicare & Medicaid Services (CMS) issued a final rule that will require hospitals to make public a list of their standard charges for items and services furnished to patients starting January 1, 2021. The rule comes on the heels of the release of the Calendar Year (CY) 2020 Outpatient Prospective Payment System (OPPS) final rule, in which CMS stated that it received over 1,400 comments on its hospital standard charges proposals. This rule imposes new reporting requirements on providers and reflects CMS’s desire to bring greater price transparency across the healthcare industry.

Since January 1, 2019, CMS has required hospitals to report publicly a listing of standard charges via the internet. In the CY 2020 OPPS Proposed Rule, CMS proposed to expand that requirement to require hospitals to disclose, among other things, the prices for “shoppable services” and all payer-specific negotiated charges. Under the Final Rule, hospitals must comply with the following requirements starting January 1, 2021:

  • Make public all their standard charges (including gross charges, payer-specific negotiated charges, de-identified minimum and maximum negotiated charges and discounted cash prices) for all items and services online in a single digital file.This file must be in a machine-readable format and the information must be easily accessible, digitally searchable and free of charge. This information must include a description of each item or service (including both individual items and services and service packages) and any code (for example, HCPCS codes) used by the hospital for purposes of accounting or billing.
  • Display, in a consumer-friendly format, payer-specific negotiated charges, de-identified minimum and maximum negotiated charges and discounted cash prices for at least 300 “shoppable services.” Shoppable services are defined as services that can be scheduled by a healthcare consumer in advance. If a hospital does not provide one or more of the 70 CMS-specified shoppable services, the hospital must select additional shoppable services, such that the total number of these is at least 300. If a hospital does not provide 300 shoppable services, the hospital must list as many as they provide.

These price transparency requirements apply to every facility licensed as a hospital, or that is approved by the state or local agency responsible for licensing hospitals, even if the facility is not enrolled in the Medicare program. This likely excludes ambulatory care facilities, physician offices, or community health centers from the definition of “hospital” under the rule, but the rule is expected to include most inpatient rehabilitation facilities, critical access hospitals, and rural hospitals to the extent that those entities are licensed as hospitals by the applicable state or local agency. While acknowledging that the Final Rule imposes burdens on resource-limited facilities, CMS declined to offer any exemptions or deeming provisions.

Facilities that fail to publish the price transparency requirements by the deadline are subject to a civil monetary penalty of up to $300 per day, and CMS may publicize such penalties on its website.

CBIZ suggests that hospitals utilize a number of strategies to ensure that they are in compliance with the new regulations and that they have conveyed the relevant information in a clear and concise manner. Here are some recommendations:

  • Inquire to see if their electronic health record (EHR) can assist in this area. If it can, ensure that corresponding EHR settings are adjusted properly.
  • Utilize patient advocates to help facilitate communication. Have them review your organization’s pricing transparency information to ensure that it is clear, concise and understandable to patients. Direct concerned patients to them. Involving patient advocates in these steps will help improve processes and overall communication between your organization and its patient population.
  • Provide extensive sample bill explanations online so that patients can better understand these pricing transparency information. This process will help establish more realistic patient expectations. Hospitals should include inpatient and outpatient bills for Medicare, Medicaid, commercial, managed Medicare and other payers it deems relevant.
  • Create a working group of hospital employees to address this issue. This group should involve patient accounting, managed care services, compliance and patient advocates. The working group should meet on a regular basis to address compliance and patient advocacy issues relating to the new regulations.

For additional information, please contact Rick Parker at 609-918-0990.

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