As we near the fourth quarter of 2020, HBI has begun to receive an influx of questions from revenue cycle leaders who want to know what others are doing to comply with the CMS price transparency rule going into effect January 1, 2021. There are two overarching requirements hospitals will need to comply with:
- Publicizing expanded standard charge information, including negotiated rates for payers and plans
- Publicizing standard charges for 300 “shoppable services”
Some organizations may be behind in working toward compliance due to setbacks caused by COVID-19. Others may have been waiting to find out if CMS would push back the compliance date because of the pandemic or the lawsuit initiated by the American Hospital Association and other industry groups and providers. The lawsuit was rejected by a federal judge on June 23, and CMS has not yet shown any indication that it plans to move the date of compliance. In fact, it only appears to be digging its heels further into price transparency, with the newly released 2021 IPPS Final Rule noting that CMS will use hospitals’ published inpatient negotiated charges with Medicare Advantage plans to set MS-DRG relative value weights starting FY 2024.
Additionally, if an organization does not comply with the 2021 price transparency rule, it may be subject to penalties of up to $300 per day until the violation is corrected. However, CMS will primarily be monitoring this reactively, relying on complaints received from patients and other entities to identify incidences of noncompliance. As a result, some organizations have noted that they are currently weighing the pros and cons of complying with the full rule.
Where to start?
Despite uncertainties around the rule, HBI believes it is in the best interest of organizations to ensure compliance. Given the extensive information organizations need to publish, there are a variety of strategies revenue cycle leaders may consider using.
Develop a team or task force dedicated to planning and implementing a compliance strategy. Start by determining an overall plan for what compliance will look like for your organization, and then break it down into smaller steps for each component of the rule. A leader at one pediatric organization based in the Southern U.S. that HBI spoke with has an enterprise working group tasked with ensuring compliance with the rule. This group is divided into three subgroups that are responsible for handling different aspects of compliance. One is dedicated to the standard charges portion of the rule, another to the shoppable services portion, and a final to developing a marketing and communications strategy. Given the widespread impact of publishing the expanded pricing information, organizations should include a multidisciplinary group of leaders and staff on such a task force, including from all areas of revenue cycle, IT, data analytics, marketing, and legal teams.
Connect with your organization’s EHR and price estimation vendor representatives to see how they can help. Given the sheer amount of pricing information hospitals need to publish, leaders are looking for ways to expedite the process of compiling this data. At the aforementioned pediatric organization, the standard charge subgroup is working closely with its EHR and price estimation vendor, Epic, to develop a solution for pulling all necessary data in an efficient way. For the shoppable services, Epic has provided the organization with a workbook of data showing its case volumes. The shoppable services subgroup has been using that to identify the additional 230 services it will include in its online price estimator (CMS has preselected 70 of the 300 services hospitals must include). Of course, organizations with a different price estimation vendor than their EHR vendor may also need to involve both groups in these discussions.
Identify if your organization will be using a self-service estimator to fulfill the shoppable services portion of the rule. According to HBI survey data, the number of organizations that offer patients the ability to generate their own estimates grew from 15% in 2017 to 50% in 2020. Updating or implementing a self-service estimator may ultimately be more efficient than separately posting the 300 shoppable service charges. It can also be a draw for price shoppers who want an easy way to obtain an estimate. CMS is purposefully vague in its requirements for such an estimator, in order to account for the variety of tools available on the market. The only criteria CMS requires such a tool to have is that it:
- Provides estimates for at least 300 shoppable services, including as many of the 70 required by CMS that the hospital provides
- Generates estimates in real time
- Is prominently advertised on the hospital website and free to use
- Does not require patients to register to use it
Hence, if an organization only offers an estimator to patients through a password-protected portal, it would not apply and the shoppable services would need to be separately posted per CMS rule.
Develop a strategy for educating and communicating with patients about price transparency. One of the most common concerns HBI has heard from leaders about the rule is that the standard charge information they have to publish will not be helpful to patients. Without proper context, this information may create confusion about the cost of care. Proactively educating patients about factors that can influence their final bill can help to prevent this. Organizations with robust estimation processes should also work to advertise the availability of estimates—or even provide them proactively to scheduled patients..
Although there is still a great deal of uncertainty around complying with the rule, taking these steps may help put organizations on solid footing as we near the compliance date. Stay in touch with HBI as we continue to gather perspectives on adhering to the rule and insight on how leaders can provide price transparency in a meaningful way.