Seeing Price Transparency Clearly

Mar. 23, 2022

Non-Compliance Will Cost You

Leg_900x400_PriceTrans

By Amy Yaeger, vice president strategic services, Legato Healthcare Marketing

Calling all hospital price transparency offenders!

Now that we have your attention, it’s time to take a serious look at what your healthcare organization needs to do immediately in order to meet CMS’s price transparency requirements.

Along with healthcare law experts from von Briesen & Roper, s.c., we recently co-hosted a webinar for our clients on hospital price transparency; below is a snapshot of what we covered in that session.

Price Transparency in a Nutshell

We’ll get to the details a little later in this blog, but the basic requirements of hospital price transparency are that, since January 1, 2021, all hospitals operating in the United States are required to provide for consumers: A) a machine-readable file for items and services that have an established standard charge, and B) a consumer-friendly list of 300 shoppable services; these materials must be prominently and freely displayed on your organization’s website.

That doesn’t sound too difficult, does it? Well, it isn’t – and it is.

Unfortunately, for a variety of reasons, from the chaos of the pandemic to simple misunderstanding, a lot of healthcare organizations have not disclosed discounts or negotiated rates.

But now CMS is conducting audits – and they’re serious about the consequences of noncompliance: As of January 1, 2022, penalties for failure to comply are now based on the number of beds in the offending facility, which means that annual penalties can reach more than $2 million.

Dates to Know: How Hospital Price Transparency Came to Be

2010: The Affordable Care Act required hospitals to make public “a list of the hospital standard charges for items and services provided”

2018: A chargemaster had to be online in a machine-readable format

June 2019: Trump Executive Order – U.S. Department of Health and Human Services (HHS) had to propose a regulation requiring hospitals to publicly post charge information “based on negotiated rates” and to “[inform] about actual prices”

November 2019: Hospital Price Transparency rule determined to be effective January 1, 2021

April 2021: Due to widespread price transparency non-compliance by hospitals, the U.S. House Committee on Energy and Commerce urged HHS to revisit its enforcement tools and conduct regular audits

July 2021:  Biden Executive Order – Required HHS to “support existing hospital price transparency rules” as part of the broader order on promoting competition in the America economy

So What’s the Problem? Here’s Where Hospitals Aren’t Complying

Again, for a myriad of reasons, many hospitals have not yet posted the required data – and even when they have posted it, consumers say that finding it can take time and legwork (on top of the fact that some argue you need to be a computer programmer to open the materials, and an actuary to understand them!).

Yet since the beginning of 2022, the penalties for non-compliance have become steep: on top of warning letters, Corrective Action Plans (CAP) and Civil Monetary Penalties (CMP), offenders of the price transparency rule can expect the following fines:

  • If your facility has 30 beds or less, your minimum penalty can be $300 per day
  • If your facility has more than 30 beds, your minimum penalty is $10 per bed, for a maximum $5,500 per day

It’s time to comply – read more below for what you need to know.

Time to Get Serious: Here’s What You Need to Do to Comply

If the fines noted above have you worried, you’re not alone. But putting your ducks in a row really isn’t as daunting as it seems; here’s what you need to provide on your healthcare organization’s website in order to comply:

  1. A machine-readable file for items and services for which your organization has an established standard charge. This file does not need to be in plain language, so you can use codes, descriptions and CMS naming convention. You also want to include the date when the file was last updated, which needs to be done annually at minimum
    • Remember that standard charges include gross charges, discounted cash prices, payer-specific negotiated charges and de-identified minimum negotiated rates
  2. A consumer-friendly list of 300 shoppable services that are searchable by description, billing code and payer; this list can be in a web display, file or internet-based price estimator with plain language descriptions
    • Shoppable services are those that are routinely provided in non-urgent situations, allowing patients to price shop and schedule service (e.g., imaging, laboratory, medical or surgical procedures, outpatient clinic visits, etc.)
    • Shoppable services also include ancillary services that hospitals customarily provide as part of, or with, a shoppable primary service

Finally, remember that your organization’s price transparency materials must be prominently and freely displayed on your public website (i.e., don’t charge consumers for access to these materials, and don’t require a require a log-in for people to access them). However, your consumer price estimator can require insurance information to generate real-time out-of-pocket estimates.

Some Easy to Remember Dos and Don’ts When it Comes to Price Transparency

Be sure that you:

  • Use current payer contracts to identify standard changes
  • Include names of payers or plans
  • Create a single digital file
  • Use a disclaimer on the limits of the price estimator tools

Make sure that your price transparency materials don’t:

  • Use average or aggregate charges
  • Use past claims or reimbursement information
  • Appear as multiple files
  • List only top payers (Remember: All payer specifics are required)

Still have questions? We can connect you with experts who can help your healthcare organization ensure that it is compliant; we can also provide you with a copy of our March 17 webinar, Understanding Hospital Price Transparency – contact Legato Healthcare Marketing’s Vice President of Strategic Services, Amy Yaeger, at amyy@golegato.com or call her directly at 715-299-0644.

*Please note that the information presented by von Briesen & Roper, s.c. during the webinar is current as of March 17, 2022; remember to check with your in-house counsel – or contact von Briesen & Roper, s.c. – regarding any legal questions related to current or updated price transparency regulations.