The Centers for Medicare & Medicaid Services’ (CMS’s) initial price transparency rule went into effect on January 1, 2021. While January 1st, 2024, marks the three-year anniversary of this sweeping regulation, the rule is still evolving, and compliance is proving to be an ongoing challenge for many organizations. If your organization hasn’t yet achieved full compliance, fines are avoidable. However, you can mitigate the scope and severity of fines by prioritizing key updates to your pricing strategy. CMS regulators will be evaluating your organization to determine whether it has made a good-faith effort to achieve price transparency. They will also be evaluating your website to ensure it has the appropriate text file and footer link. Join us as we further explore these requirements, the fining process, and what you can do to protect your organization’s revenue in 2024. We’ll also highlight what changes go into force in 2024, what key deadlines to look out for, and what they mean for you.
In the near future, hospitals will compete for business just like other service industries, i.e., restaurants and retailers, to name a few. For example, consider how someone finds the best speaker to buy on the market. They go online and compare prices, specs and quality. Knowing this information, they can then decide whether they will choose a certain speaker or not. For years, healthcare was immune to this level of consumerism, but since the push for stricter price transparency laws in healthcare, the consumer now has all the information they need to choose your hospital or not. The truth this change brings is that consumerism isn’t going anywhere. In fact, it is only going to get ramped up. As it will affect their bottom line, hospitals should take this seriously and plan to align with consumer demands and expectations.
Of the various factors that impact your healthcare organization’s profitability, pricing is an often overlooked lever that you have control over. Even those healthcare organizations that do address pricing sometimes undermine their strategic pricing strategies by failing to address lesser-of-charge clauses or skipping the charge description master (CDM) modeling process, which can wreak havoc on their bottom line. The price transparency mandate added another layer of complexity, as raising prices to eliminate lower reimbursement may have adverse effects.
During the height of the COVID-19 pandemic, patient volume declined by 60%, overall claims volume decreased, and revenue plummeted for healthcare organizations and hospitals nationwide. However, insurers were paying for virus treatment and testing services, which helped offset some of the financial impacts of the epidemic.
In July 2023, CMS proposed some major price transparency changes with the release of the 2024 OPPS rules. Most notably, the proposed rule changes move to standardize the formatting of the machine-readable files (MRF), increase data accessibility and greater accountability. This can lead to a significant impact on hospitals that are not completely compliant with existing regulations. Even if you believe your organization is 100% compliant today, the proposed changes may expose your hospital to penalties. Let’s examine the proposed price transparency changes and highlight how PMMC is quickly moving to incorporate these changes to help our clients remain compliant.
The CMS’ hospital price transparency laws are in full effect. In addition to requiring hospitals to post pricing data online, these regulations also make it mandatory for facilities to provide estimates to patients upon request and include estimates for ancillary providers as well.
Contract modeling software can help healthcare decision-makers look beyond their revenue cycles and adapt to industry trends to maximize profitability. Partnering with an experienced contract modeling system provider like PMMC is also helpful for evaluating payer contracts and ensuring that they’re being fully maximized. Let’s further examine contract modeling software, including why hospitals need them and the benefits they provide.
Over the last several years, hospitals and healthcare groups have been ravaged by pandemic-related revenue losses. According to the American Hospital Association, in 2021 alone, U.S. hospitals lost approximately $54B in net income. Despite that, hospital leaders strive to achieve an economic resurgence by reducing operating expenses, streamlining operations, and perhaps most importantly, restructuring payer proposals to maximize their returns.
Most hospitals have been feeling the effects of ongoing staffing challenges. Hospitals across the nation are struggling to hire and retain both frontline care providers and administrative talent like accounting personnel.
Since early 2020, hospitals have been contending with unprecedented challenges that have negatively impacted their revenue and profitability. Throughout 2022, 53% of hospitals had negative margins, according to the American Hospital Association, and even those projected to end the year with positive margins are still recouping from the financial hurdles of the last few years.