PRICING TRANSPARENCY

In 2018, hospital Pricing Transparency was introduced. This mandate established that charges must be made available to patients in an easily readable and searchable format. Most facilities that have already implemented Pricing Transparency systems have made .CSV files of their chargemasters to put on their websites and made a file available at the hospital for viewing by patients.

This document serves as a guide for hospitals to learn what is required of them when Pricing Transparency is implemented on January 1, 2021, how to properly make standard charges public, using their current price estimator tool in place of the Shoppable Services file, and what they should be doing now to best prepare for January 1, 2021.

Making Standard Charges Public

There are two ways that facilities operating under a single hospital license must make public their standard charges:

  • Comprehensive Machine-Readable File: must contain all five types of “standard charges” mentioned before all “items and services” provided by the facility (these definitions and examples are provided in the next section). Hospitals will be dependent upon their EHRs or patient accounting systems for this info and will probably need to manually manipulate data or merge multiple files.
    • Required Data Elements- a description of each item/service, all 5 standard charges that apply to each item or service when provided in the hospital inpatient and outpatient department setting, and any code used by the hospital for purposes of accounting or billing for the item or service (HCPCS codes, DRG codes, or others)
    • Format- The information must be published in a single digital file that is in a machine-readable format. Machine-readable format means a digital representation of data or information in a file that can imported or read into a computer system for further processing (e.g.: PDF, Adobe, .CSV, .XML, .JSON)
    • Location and Accessibility- The file must be displayed prominently and clearly identify the hospital location with which the standard charges information is associated on a publicly available website using a CMS-specified naming convention. The hospital must also ensure the data is easily accessible, without barriers, including ensuring the data is accessible free of charge, does not require a user to establish an account or password or submit personal identifying information (PII), and is digitally searchable.
    • Updates- Data must be updated at least annually and clearly indicate the data of the last update (either within the file or otherwise clearly associated with the file).
  • Consumer-Friendly Shoppable Services: A consumer friendly list of some types of standard charges for a limited set of shoppable services (70 CMS-specified and 230 hospital-selected).
    • Required Data Elements- Includes a plain-language description of each shoppable service and any primary code used by the hospital for purposes of accounting or billing, groups the primary shoppable service with the ancillary services that the hospital customarily provides in conjunction with the primary shoppable service, indicates the location at which the shoppable service is provided, and whether the standard charge for the shoppable service applies at that location to the provision of that shoppable service in the inpatient setting, the outpatient department setting, or both
    • Format- Hospitals have discretion to choose a format for making the chargemaster consumer-friendly
    • Location and Accessibility- The information must be displayed prominently on a publicly available Internet location that clearly identifies the hospital location with which the information is associated. The information must be easily accessible, without barriers, including ensuring the data is accessible free of charge, does not require a user to register, establish an account or password or submit PII, and is searchable by service description, billing code, and payer.
    • Updates- Information must be updated at least annually and clearly indicate the date of the last update.

STANDARD CHARGES, ITEMS AND SERVICES, AND SHOPPABLE SERVICES

Hospitals are required to list the 5 listed Standard Charges above the Items and Services on their Pricing Transparency Chargemaster. The Standard Charges listed below are for Shoppable Services the hospital provides. There are definitions and examples for both categories below:

  • Standard Charges:
    • Gross Charges- The charge for an individual item or service that is reflected on a hospital’s chargemaster, absent any discounts
    • Discounted Cash Price- The charge that applies to an individual who pays cash, or cash equivalent, for a hospital item or service
    • Payer-Specific Negotiated Charge- The charge that a hospital has negotiated with a third-party payer for an item or service
    • De-Identified Minimum Negotiated Charges- The lowest charge that a hospital has negotiated with all third-party payers for an item or service
    • De-Identified Maximum Negotiated Charges- The highest charge that a hospital has negotiated with all third-party payers for an item or service
  • Items and Services:
    • Definition- all items and services, including individual items and services and service packages, that could be provided by a hospital to a patient in connection with an inpatient admission or an outpatient department visit for which the hospital has established a standard charge
    • Examples- supplies and procedures, room and board, use of the facility and other items (facility fees), services of employed physicians and non-physician practitioners (professional charges), and any other items or services for which the hospital has established a standard charge
  • Shoppable Services
    • If a hospital does not provide one or more of the 70 CMS-specified shoppable services, the hospital must indicate that the service is not offered by the hospital, and select additional shoppable services such that the total number of shoppable services is at least 300.
    • If a hospital provides less than 300 shoppable services, the hospital must list as many shoppable services as it provides.
    • The shoppable services selected for display by the hospital should be commonly provided to the hospital’s patient population.

Price Estimator Tool

Many hospitals have an estimator in place today or some methodology for their staff to provide an estimate to their patients. The CMS will allow hospitals to utilize their existing patient estimator tool in place of the shoppable services file. However, make sure that it is not looking at only the CPT, HCPC, or DRG. This will help rural hospitals that are having problems reaching the required 300 shoppable services. This tool should be available on the hospital’s website to patients free of charge and without the need for the patient to register or have an account with the hospital.

What You Should Be Doing Now

  • Identify the services that will be most impacted by the mandate by evaluating current services offered that are a part of the 300 common shoppable services codes and deciding what needs to be included.
  • Determine your hospital’s current capabilities. From becoming compliant with the rule to answering daily patient calls around price comparisons—this rule may enhance the need for consumer-facing services that could be underdeveloped at your organization. What gaps do you have? How will you fill them?
  • Become the market leader. Drive toward full transparency on consumer commodity services, beyond the CMS requirement. Establish real-time patient liability estimator portal technology and/or targeted direct-to-consumer pricing strategies (demand/ bundle-based pricing).