Author: Randi Brantner

In effect since January 1 of this year, recent studies are showing low compliance with meeting all aspects of the Health Care Price Transparency Act. JAMA Internal Medicine published an article in June that showed 75 percent of the 100 top-grossing hospitals didn’t comply with at least one of the rule’s requirements while 86 percent had a price estimator tool. Fifty percent of 100 randomly sampled hospitals had a price estimator tool and of those 100 hospitals, 83 percent failed to comply with at least one of the rule’s requirements.[1] In another study of 5,288 hospitals, it was found that only 48.5 percent had chargemaster data on their websites with only 138 hospitals having an online price estimator.[2] A study based on bed count and published in HealthAffairs, found 65 percent of the 100 largest hospitals in the U.S. were not in compliance and 12 of the noncompliant hospitals had no files or links to searchable databases.[3]

CMS implements civil monetary penalties for noncompliance

As a result of this widespread noncompliance, the American Hospital Association (AHA) released a Member Advisory regarding noncompliance with the Centers for Medicare & Medicaid Services (CMS) Hospital Price Transparency requirements. In it, they noted that CMS has launched proactive audits of hospital websites and have evaluated complaints presented to CMS by consumers. According to the publication, CMS started with auditing larger acute care hospitals and have now expanded their examination of random hospitals. The first set of warning letters were issued the week of April 19th. However, CMS has indicated that they will not announce the list of hospitals that have received warning letters but will publish the identities of the hospitals that remain non-compliant and receive a monetary penalty if they have not addressed the issues within 90 days.

Number of Hospital Beds	Maximum Annual Civil Monetary Penalty
<30	$109,500
50	$182,500
100	$365,000
200	$730,000
300	$1,095,000
400	$1,460,000
500	$1,825,000
500+	$2,007,500

A Special Edition from the Medicare Learning Network states that CMS is updating the civil monetary penalty amount. The current minimum civil monetary penalty of $300/day would apply to smaller hospitals with less than 30 patient beds. However, for hospitals with more than 30 beds, the penalty will be $10/bed/day, not to exceed a maximum daily dollar amount of $5,500. “Under this proposed approach, for a full calendar year of noncompliance, the minimum total penalty amount would be $109,500 per hospital, and the maximum total penalty amount would be $2,007,500 per hospital.”[4]

Patients and hospitals can submit a complaint to CMS if they believe a hospital doesn’t have the appropriate information posted online. For more information on Hospital Price Transparency, click here. If you have any other questions regarding Hospital Price Transparency, email the hospital price transparency team.

Hospital price transparency requirements

As a reminder, the CMS Hospital Price Transparency rule requires that hospitals publish detailed pricing information online to help consumers make accurate cost comparisons for a range of treatments and procedures. The rule contains two types of price transparency requirements:

1. Hospitals must post their entire array of standard charges online in a machine-readable file that is easily accessible from their public website
2. Hospitals must publish a document listing pricing for 300 specific shoppable healthcare services. Of these 300 items, 70 have been pre-defined by CMS, while the remaining 230 can be selected at the discretion of the hospital.

For both requirements, a range of different price categories must be shown, including gross charges, payer-specific negotiated rates, self-pay discounted rates, and de-identified minimum and maximum negotiated charges. The files also must contain any ancillary charges that are customarily included for the specific shoppable service, such as the costs associated with additional related procedures, tasks, allied services, supplies, or drugs, as well as any professional fees billed separately from the facility bill.

These requirements present challenges when it comes the sheer data mining and payer contract analytics required to deliver on the mandates. A hospital’s payer contract modeling system must be able to accommodate a variety of settlement methodologies by patient type including MS-DRG, APR-DRG, EAPG, ASC Levels, APC packaging, and percent of charge, among others. This means that for a typical hospital with a 10,000-line chargemaster, seven patient types, and 20 payer contracts, over 1.4M calculations are needed to fulfill the mandate. Meeting the regulatory requirements of the Health Care Price Transparency Act could require a hospital to spend an extraordinary amount of time and resources that they might not have. An alternative would be to contract with a partner that could provide the expertise with a cost-effective solution.

PARA HealthCare Analytics can help

PARA HealthCare Analytics, an ParaRev Company, is among the leaders in supporting hospitals in achieving readiness for CMS Price Transparency regulations, which will help consumers make more informed healthcare purchasing decisions. To ensure consumers will be able to browse for healthcare services in the same way they shop for other goods and services online, PARA has developed robust and accurate pricing capabilities for area healthcare consumers. The PARA solution includes a patient-facing estimator that delivers user-friendly, procedure-level estimates reflecting patients’ specific coverage limits and is updated quarterly for the facility with a payer contract system that can accommodate a variety of settlement methodologies.

PARA’s Price Transparency Tool, which uses the actual payer contract language as outlined in the CMS requirements to make those millions of calculations, is the most cost-effective and comprehensive solution on the market today.

To see how this solution would work for your hospital, click here to view a short demo.
And for more detail on the CMS requirements 1 and 2, watch our Becker’s Webinar: Price transparency – clarifying the unknown.

We can help you refine your pricing to improve revenue capture and strengthen margins while remaining competitive in your market. Contact us today to learn more about how we can help your organization prepare for the transparency transformation ahead.

1. Suhas Gondi, BA1,2; Adam L. Beckman, BS1,2; Avery A. Ofoje, BA3; et al., “Early Hospital Compliance With Federal Requirements for Price Transparency,” JAMA Internal Medicine, June 14, 2021.
2. Waqas Haque, MPH, MPhil1; Muzzammil Ahmadzada2; Hassan Allahrakha, BS3; et al, Eman Haque4; David Hsiehchen, MD, “Transparency, Accessibility, and Variability of US Hospital Price Data.,” JAMA Network, May 14, 2021.
3. Morgan Henderson, Morgane C. Mouslim, “Low Compliance from Big Hospitals on CMS’s Hospital Price Transparency Rule” HealthAffairs, March 16, 2021.
4. “CMS Proposes Rule to Increase Price Transparency, Access to Care, Safety & Health Equity” mlnconnects, July 19, 2021.

Related Posts

None found

Background: Federal law is required to prevent “surprise” billing

In 2020, Congress held meetings to determine whether laws should be enacted to prevent the devastating financial obligations imposed on a patient with healthcare insurance who is treated by an out-of-network provider, particularly when the patient did not know or expect that insurance coverage would be limited for that care.

During Congressional hearings, citizens recounted unexpected, and devastating, financial obligations incurred by patients who were transported by out-of-network air ambulance services. According to the Nebraska Department of Insurance, the average air ambulance trip is 52 miles and costs between $12,000 to $25,000 per flight. Since most air ambulance services do not participate as “network” providers with insurers, that portion of the bill that the insurer will not cover becomes a patient liability. The plight of these patients and others convinced Congress that federal law should prevent a “surprise” bill resulting from an uninformed patient owing large sums of money to an out-of-network provider.

“No Surprises Act” is added to the Consolidated Appropriations Act of 2021

The resulting legislation, the “No Surprises Act”, was incorporated into the Consolidated Appropriations Act of 2021, which was signed into law by then-President Trump in late December 2020. The new Federal law limits the ability of both insurers and out-of-network providers to shift a significant financial obligation to the patient/beneficiary, unless that patient is provided with advance written notice of the anticipated amount that the patient will owe, along with information about the patient’s alternatives to out-of-network care. If there is a State law that addresses the same concern, State law takes precedence.

Interim Final Rule recently released

The new law becomes effective on January 1, 2022, and the Office of Personnel Management, along with the Department of Health and Human Services, Labor, and Treasury developed implementing regulations. The first regulations, dubbed “Part 1”, were released on July 1, 2021 in an “Interim Final Rule with Comment Period” (CMS-9909-IFC.)
Stakeholders should pay particular attention to provider obligations arising from the law, including:

• Distributing standard information about patient rights under the No Surprises Act Information must be posted on the provider website, in signage in public areas of the facility, and in a written one-page, double-sided document distributed to insured patients prior to collecting payment from the patient or submitting a claim to the patient’s group health insurer. (A model notice is under development.)
• The “Notice and Consent” requirements of No Surprises Act Out-of-network providers and facilities must obtain the patient’s informed consent to collect out-of-network costs from the patient. The notice requirements include an estimate of the costs the patient will be liable to pay and information about in-network service alternatives. Notices must be available in the 15 most common languages spoken in the provider’s region. (It is not clear whether a provider may simply opt-out of the notice requirement and accept whatever the insurer’s discounted payment rate may be.)
• The method insurer must use to calculate the “Qualifying Payment Amount” for out-of-network services The payment the insurer is obligated to use in calculating provider reimbursement and patient liability for services at an out-of-network provider could be based on that insurer’s median in-network contracted rates with other like providers within the same region, depending on specific circumstances

The second set of implementing regulations, “Part 2”, are expected to be published in coming months relating to dispute resolution and other provisions of the new law.

Additional Resources

To learn more about the No Surprises Act and the regulations implementing the new law, visit the following websites:

• Interim Final Rule, CMS-9909-IFC, published on7-13-21 in the Federal Register
  • Subpart E – Health Care Provider, Health Care Facility, and Air Ambulance Service Provider Requirements
    • 149.410 Balance billing in cases of emergency services.
    • 149.420 Balance billing in cases of non-emergency services performed by nonparticipating providers at certain participating health care facilities.
    • 149.430 Provider and facility disclosure requirements regarding patient protections against balance billing.
    • 149.440 Balance billing in cases of air ambulance services.
    • 149.450 Complaints process for balance billing regarding providers and facilities.
• CMS: “Fact Sheet” on the interim final rule
• The American Hospital Association: concise summary and analysis
• The American Medical Association: high-level summary
• United Healthcare: convenient FAQ-style resource on its website
• No Surprises Campaign (People against Unfair Medical Bills): consumer stories and letters from diverse interests participating in the development of the No Surprises Act

ParaRev can help

An essential component of the “No Surprises Act” is the ability for the provider to deliver pricing transparency to the consumer. Meeting the challenges of pricing transparency demands a systematic approach grounded in empirical evidence and a capable staff implementing proven solutions. ParaRev, a leader in accounts receivable recovery and resolution, can help you execute all steps necessary to comply with the transparency rule and improve patient satisfaction. To see how this solution would work for your hospital, click here to view a short demo.

Contact us today to learn more about how we can help your organization prepare for the pricing transparency requirement that is a critical component of the “No Surprises Act”.

Related Posts

None found

Like it or not, pricing transparency has moved to the forefront of healthcare reform efforts. That means hospitals must be ready to make detailed price information available for consumers interested in shopping procedures and services.

Yet it’s no secret transparency is a double-edged sword. Publicizing pricing information before an organization has made sure its prices are rational, competitive and defensible can damage a hospital’s brand and undermine the bottom line.

The good news is that capabilities now exist to help hospitals develop comprehensive, market-based pricing strategies that allow them to optimize margins while remaining competitive with local and regional peer organizations. This pricing data can then be shared publicly in easy-to-use formats and harnessed to accurately convey patient payment responsibilities.

Government pressure

Price transparency has been one of the most talked-about healthcare reform objectives for a decade or more. Much of this emphasis has been fueled by the continued growth of high deductible insurance plans. Proponents say consumers need, and expect, detailed price information to be sure they’re getting the most for their hard-earned healthcare dollars. Policymakers also believe transparency will spur provider competition and help drive down costs.

But with much of the industry’s attention focused elsewhere in recent years – notably on the implementation of value-based reimbursement models – transparency has taken a back seat. In fact, the percentage of hospitals unable to provide price information increased between 2012 and 2016, from 14 percent to 44 percent.[1]

That’s likely to change, however, now that the government has signaled it’s serious about making hospital pricing information more accessible to all. In January 2019, the Centers for Medicare and Medicaid Services (CMS) announced a rule mandating that hospitals post their standard charges, or chargemaster, online.

CMS then upped the ante in July of this year with a proposed rule that would require hospitals to post not just the often-inflated numbers of the chargemaster but also typically confidential information showing actual negotiated rates by payer and plan for specific procedures and services.

Failure to comply with the rule, which is scheduled to take effect on Jan. 1, 2020, could result in civil monetary penalties of up to $300 per day. Hospitals could also be subject to audits and corrective action plans if they fail to disclose negotiated rates.[2]

Both hospital and insurance groups are vehemently opposed to the requirement that negotiated rates be made public. They argue that publicizing the information could inhibit competition, increase the administrative burden for hospitals, increase costs and reduce access to care.[3]

As a result, the rule is expected to trigger a number of legal challenges, and whether it will take effect in January remains to be seen. But if the past is any prologue, government healthcare reform efforts — regardless of their popularity — eventually find their way into the market, in one fashion or another.

Peer analysis

That’s why forward-thinking hospitals would do well to begin developing their own transparency strategies. Before this can happen, though, it’s essential that organizations are fully confident the numbers they’re prepared to share publicly make economic sense and are justifiable when it comes to peer pricing.

ParaRev has developed a comprehensive process to help hospitals create rational pricing models built around cost, reimbursement and peer pricing data. The effort begins with a review of existing pricing information across all hospital revenue streams, including room rates, emergency visits, diagnostic and therapeutic procedures, operating room, anesthesia, PACU, pharmacy and medical supplies.

Once this baseline information is established, ParaRev will compare service line and procedure prices against equivalent pricing from a designated group of peer institutions. The latter information is acquired through review of the most recent quarterly Inpatient and Outpatient Standard Analytic File (SAF) data generated by the Centers for Medicare and Medicaid Services (CMS).

Using these comparisons, hospitals can to see exactly how their pricing stacks up against specific facilities and also against averages for the entire group. Quantifying in percentage terms the extent to which the price for a particular service or product deviates from the group average enables hospitals to quickly spot opportunities for increasing prices while still remaining competitive. Conversely, ParaRev can also flag any instances in which an organization’s high prices represent over-market outliers.

The right prices

Armed with this data, ParaRev pricing experts work alongside the hospital’s financial management team to establish specific pricing targets and timelines based on the opportunities presented. These calculations will also take into account contractual reimbursement rates to ensure the new prices are consistent with payer policies.

Likewise, ParaRev can help develop effective strategies for areas or services that require pricing sensitivity. For example, an organization may want to keep prices at, near or even below cost for some services to remain competitive with independent, free-standing facilities.

Importantly, the pricing developed through ParaRev’s rational pricing model is competitive with peer pricing and therefore both defensible and supportive of an effective consumer-facing transparency strategy.

A comprehensive solution

Meeting the challenges of pricing transparency demands a systematic approach grounded in empirical evidence and a capable staff implementing proven solutions. ParaRev can help you refine your pricing to improve revenue capture and strengthen margins while remaining competitive in your market. Contact us today to learn more about how we can help your organization prepare for the transparency transformation ahead.

1. Tony Abraham, “No way to enforce hospital price transparency rule, CMS says,” Healthcare Dive, Jan. 11, 2019.
2. Jacqueline LaPointe, “Proposed Hospital Price Transparency Rule Faces Industry Criticism,” RevCycle Intelligence, Aug. 5, 2019.
3. Ibid.

Related Posts

None found