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Confused by the Upcoming CMS Price Transparency Mandate? Get Answers to FAQs

TransUnion Healthcare
Blog Post11/06/2020
Business
Confused by the Upcoming CMS Price Transparency Mandate? Get Answers to FAQs

After our recent Modern Healthcare-sponsored webinar — The CMS Price Transparency Mandate: What You Need to Know to Ensure Your Organization is Compliant — we realized many healthcare organizations still likely have unanswered questions about the upcoming mandate taking effect on Jan. 1, 2021. As such, we’ve compiled some of the most common questions we’re hearing from our clients and others in the industry.

Q: What healthcare organizations are impacted by this mandate? Does it apply to private practice medical groups? Ambulatory surgery centers? Urgent care clinics?

In the Final Rule, CMS provides direction on which organizations must comply with the mandate. According to CMS, “Hospital means an institution in any State in which State or applicable local law provides for the licensing of hospitals — which is licensed as a hospital pursuant to such law, or is approved by the agency of such State or locality responsible for licensing hospitals as meeting the standards established for such licensing.”1 

In addition, “CMS did not provide an exhaustive list of qualifying institutions, but clarifies that critical access hospitals (CAHs), inpatient psychiatric facilities (IPFs), sole community hospitals (SCHs), inpatient rehabilitation facilities (IRFs), and any other institutions meeting state or local licensing standards for hospitals are “hospitals” subject to this Final Rule. To the extent any hospital has other locations operating under the same license or hospital approval (e.g., an off-campus hospital outpatient department), such locations are subject to the Final Rule and, if they operate under a separate chargemaster, the hospital must separately publish the charges for each location.”2

Q: How do organizations address inaccurate quotes as a result of patients entering the wrong information, especially considering the amount of plan options some insurance companies offer?

Most organizations already have a customer service area within their billing office handling this today. (It’s the same area addressing bill discrepancies or inquiries.) It’s also advisable for organizations to limit the number of procedures that can be selected, similar to how CMS has defined the 300 shoppable services. More complex procedures should be avoided. Finally, hospitals should include disclaimer language on the self-service estimate regarding the accuracy of the estimates. Such a disclaimer could state something to the effect of: “This estimate is based on information entered at the time of calculation. Facility is not responsible for inaccuracies due to incomplete or incorrect information entered. To assist you with this estimate, please email or call the business office if you are unsure of the procedure(s) that should be selected.”

Q: How does this mandate benefit patients with an HMO plan and fixed co-pay?

Many patients are unaware of their copay. Even HMO plans have plan exclusions (non-covered services), and as such, become self-pay. HMOs also represent a very small population of the overall employer-sponsored plan type. PPOs, which involve cost sharing in coinsurance and deductibles, are more prevalent. Per KFF, in 2020, PPOs covered 47% of workers and HMO only 13%. That said, HMO penetration is higher in certain states like California (60%).3

Regardless, price transparency is the first step in cost control. Consumers want to know prices, and they should be shared. Per a recent TransUnion Healthcare patient survey, 60% of patients are at least somewhat likely to pay their bill up front if a cost estimate is offered in advance or at the time of service. When given an estimate at the time of service, nearly two-thirds of recent patients (65%) said they would make at least a partial payment.

Q: The guidelines indicate an average negotiated charge isn’t sufficient. Will an estimation tool cover the average care and rate information? Will posting a statement with the SP discount amount suffice?

Estimation tools like Transunion Online Patient Estimation base their estimate on the codes, charges and insurance contract specific for that patient. Our tool — and a key differentiator — also looks at all the encounters for that code(s) and adds in other common charges. This presents an accurate estimate reflective of the total charges, contracted insurance rate, and most importantly, the patient’s estimated out-of-pocket cost.

Q: Managed care contract language indicates the contents within are private and confidential. Should facilities expect addendums to contracts to 'allow' for the release of confidential fee schedules/rates? How is the disclosure of professional prices being handled?

CMS responded to this during the comment period and indicated that, “[w]e do not believe that the payer-specific negotiated charges hospitals would be required to disclose are proprietary or would constitute trade secrets. To the contrary, this information is already generally disclosed to the public in a variety of ways, for example, through State databases and patient EOBs.”4

The American Hospital Association (et al.) filed a lawsuit in 2019, and CMS upheld the rule in June of 2020, and the court brief stated: “[t]he information the Price Transparency Rule principally targets is thus already out there, sitting in the file cabinets and inboxes of millions of patients who are free to share those rates with the world.”5

TransUnion Healthcare is committed to providing a price transparency solution that addresses both parts of the mandate — offering 300 shoppable services and a machine-readable list of hospital services. In order to ensure adherence with the mandate, it’s recommended you allow ample time to prepare.

 

The materials available on this page are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem.

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