How hospitals are preparing for CMS' price transparency change

CMS aims to increase price transparency for patients with its annual Inpatient Prospective Payment System rule released Aug. 2. 

Under the rule, hospitals are required to publish a list of their standard charges on the internet. They must present the information in a machine-readable format that can be easily imported into a computer system, and update the information at least annually. Currently, hospitals are required to make this information publicly available or available upon request. The new change takes effect Jan. 1. 

Becker's recently caught up with several hospitals and health system executives to see how their organizations are preparing for the change and to gather their general thoughts on the rule.

How UAB Health System is preparing for mandated price transparency

Birmingham, Ala.-based UAB Health System aims to break down charges in a way that is easy for patients to understand.

"To comply with the requirement, we will publish our standard list of charges," said CFO Dawn Bulgarella. "However, we want to provide a more patient-focused approach by making charges more understandable to patients, including perhaps documentation that explains what medical terminology means, as well as estimators of what the patient will owe based on their insurance plan, and where they can get more information."

UAB updates its chargemaster annually and said it knows how prices can affect patients' healthcare choices.  

"Price transparency is important — no one wants to pay more for healthcare. However, helping our patients understand the complexities of their insurance coverage, their out-of-pocket costs and most importantly the quality of the services we are providing them is what we are striving for," Ms. Bulgarella said.

UAB is implementing a price transparency tool, which it plans to develop over time. 

"We will meet the Jan. 1 deadline requirements but will likely continue to develop our tool as we go taking into account patient feedback and online experience data," said Ms. Bulgarella.

Ms. Bulgarella also expressed some concerns about the new price transparency rule. She specifically questioned how helpful posting standard charges online will be for patients seeking estimates for their actual expected out-of-pocket costs.

"I don't know how helpful providing hospital charge data will be to most of our patients because most of our patients want to know what is it going to cost me and that is a function of their insurance, their deductible, have they met their deductible, and if the service going to be provided in an inpatient setting or in the ambulatory setting," said Ms. Bulgarella.

Additionally, Ms. Bulgarella expressed concerns about the language of CMS' new rule, saying it is too vague and that hospitals will interpret it differently.

Sharp HealthCare questions whether rule will achieve intended result    

In California, hospitals are required to make their standard charges available to patients on request. They must also submit a copy their chargemasters, a list of average charges for 25 common outpatient procedures, and the estimated percentage change in gross revenue due to price changes each summer to the California Office of Statewide Health Planning and Development. California hospital charges are publicly available on the OSHPD website.

Gerilynn Sevenikar, vice president of revenue cycle at San Diego-based Sharp HealthCare, said her organization's standard charges are already posted online as part of the state law. However, Sharp will confirm its format is machine-readable to ensure compliance with the IPPS rule.

Ms. Sevenikar said the rule aims to provide price transparency and give patients the ability to search care options and make informed decisions on their care, but that may not be the result.

"Unfortunately, knowing you need a hip replacement (for example) does not give you enough information to look at a chargemaster and know what charges would potentially be billed, what your physician preferences might be, what complications may be likely due to your personal health status, what your insurance would cover and what your out-of- pocket might be," she said.

Tufts Medical Center wants more guidance

Boston-based Tufts Medical Center has worked with its IT department, revenue integrity and the patient financial services department to begin talking about CMS' new requirement, said Michele Muse, director of health information management at Tufts. The medical center will also participate in a roundtable with peers nationwide at the end of October.

"This rule will allow our No. 1 customer, [patients], to have the flexibility to make well-informed decisions and provide pricing transparency for services across different facilities," she said. "We need to take the time to carefully focus and right staff internally to ensure we are providing the patient with resources to talk through any questions they may have on potential costs in anticipation of their upcoming visits."

Ms. Muse said Tufts is optimistic about the change, but she wants to see additional guidance from CMS to help ensure hospitals publish the chargemaster "in a uniform fashion from the patient's perspective."


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