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Bradley Olin

By: Bradley Olin on January 4th, 2019

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Additional FAQs: CMS' Provides Clarity on Price Transparency Final Rule

Just when we thought CMS was finished updating the requirements for the new price transparency ruling, they release another FAQ list that provides additional clarification to certain questions and includes new items to be added to your list of standard charges. 

These 7 questions cover a list of which additional items need to be included in your CDM, the format to use for presenting the charge data, and even states that there will be a penalty for those providers that aren't able to meet the standards by January 1, although they haven't yet specified what that will entail. 

“If you’re buying a car or pretty much anything else, you’re able to do some research. You’re able to know what the quality is. You’re able to make comparisons. Why shouldn’t we be able to do that in healthcare? Every healthcare consumer wants that,” says Seema Verma, CMS Administrator.

This new requirement takes effect January 1, 2019. Let’s review what we now know:

Here’s What We Know (according to the new CMS FAQs)

1) Q: Do the requirements apply to drugs and biologicals?

A: Yes, the current requirements apply to all items and services provided by the hospital.

2) Q: Is a hospital required to post its standard charges for drugs, biologicals, or other items and services that it provides if those standard charges are not reflected in its chargemaster?

A: Yes, it is the responsibility of the hospital to establish (and update) and make public a list of the hospital’s standard charges for all items and services provided by the hospital, including all drugs, biologicals, and all other items and services provided by the hospital.

CMS encourages hospitals to undertake efforts to engage in consumer friendly communication of their charges, including for drugs and biologicals, to help patients understand what their potential financial liability might be for services they obtain at the hospital, and to enable patients to compare charges for similar services across hospitals. A hospital is not precluded from posting additional price transparency information in addition to its current standard charges.

3) Q: In addition to establishing (and updating) and making public a list of the hospital’s standard charges for all items and services provided by the hospital, what hospitals are required to establish (and update) and make public a list of their standard charges for each diagnosis-related group established under section 1886(d)(4) of the Social Security Act?

A: All hospitals operating within the United States are required establish (and update) and make public a list of their standard charges for all items and services provided by the hospital. Under current guidelines, subsection (d) hospitals are additionally required to establish (and update) and make public a list of their standard charges for each diagnosis-related group established under section 1886(d)(4) of the Social Security Act.

The format for standard charges for each diagnosis-related group is the hospital’s choice. CMS posts information regarding inpatient charges for subsection (d) hospitals at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/Inpatient.html. Subsection (d) hospitals may, but are not required to, use this format with respect to the additional requirement that the hospital establish (and update) and make public a list of the hospital’s standard charges for each diagnosis-related group established under section 1886(d)(4) of the Social Security Act.

4) Q: What happens if a hospital does not make public a list of its standard charges via the Internet?

A: The hospital will not be in compliance with the law. In the FY 2019 IPPS/LTCH proposed rule (83 FR 20549), CMS sought comment on the most appropriate mechanism for CMS to enforce price transparency requirements. As indicated in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41686), specific additional future enforcement or other actions that we may take with the guidelines will be addressed in future rule making.

5) Q: Are Inpatient Rehabilitation Facilities and Inpatient Psychiatric Hospitals required to make public a list of their standard charges via the Internet?

A: Yes, this requirement applies to all hospitals operating within the United States.

6) Q: Are Critical Access Hospitals and Sole Community Hospitals required to make public a list of their standard charges via the Internet?

A: Yes, this requirement applies to all hospitals operating within the United States.

7) Q: Why isn’t a PDF considered machine readable?

A: We have defined a machine readable format as a digitally accessible document that includes only formats that can be easily imported/read into a computer system (e.g., XML, CSV). A PDF does not satisfy this definition because although it is a digitally accessible document, it cannot be easily imported/read into a computer system.

 What’s Still Up In The Air

  • What message strategy will providers use to present their list of charges and how effective will this be to educate the consumer?
  • Will these FAQs provide clarity to providers on their added responsibility?
  • Does posting the chargemaster list actually help the consumer or create more confusion about hospital's prices?
  • What is the penalty for providers who are unable to meet these standards by the Jan 1, 2019? 

Why This Matters

  • This ruling sets a higher expectation for healthcare price transparency, and hospitals will have to be prepared to present this pricing information in a positive light.
  • Because the chargemaster rate for a procedure is often much higher than the actual price the patient pays out-of-pocket, hospitals that only publish the chargemaster rates could run the risk of losing patients to competitors that are presenting more relevant pricing information, such as estimates for actual out-of-pocket costs. 
  • Hospitals will need to educate patients on the difference between chargemaster rates and their actual out-of-pocket costs to make the consumer feel more in control over their personal healthcare.
  • To prepare for this rule change, hospitals need to develop strategies for educating their staff on how to discuss the patient’s financial responsibility to prevent payment issues.
  • With these updated FAQ being released just a few weeks before the Jan. 1 deadline, hospitals will have to work fast if they want to be able to make the necessary adjustments to their CDM without facing the late penalty.
  • Although not required, CMS strongly recommends hospitals provide estimates of any drugs and biologicals to ensure that the patient is fully aware of their financial responsibility for any services rendered. CMS also recommends that hospitals post all price transparency information pertaining to these new items in the chargemaster as well. 

What Healthcare Providers Should Do Now

Healthcare providers will need a strategy beyond just publishing their standard chargesWithout a strategy, hospitals will lose the ability to control the pricing message and could lose patients as a result.

PMMC is helping hospitals prepare for the impending January 1, 2019 CMS price transparency ruling with a price transparency strategy session that allows hospitals to control the pricing message while satisfying the CMS requirement.

Book Your Strategy Session

 

About Bradley Olin

Bradley Olin is the Marketing Communications Specialist at PMMC, a leading provider of revenue cycle management solutions for hospitals and other healthcare organizations across the U.S. Brad offers a modern outlook into the evolution of the healthcare industry and general practices used to grow an organization’s revenue integrity.