by Robert King | Aug 26, 2019 12:00pm
While the Trump administration wants hospitals to begin posting
"shoppable" prices online starting next year, some hospitals are
scrambling to figure out how they'll be able to meet such a requirement.
Some officials have complained that they do not have contracts
automated in order to post such rates. Others say it will create major problems
as they release payer rates with little context for the patients who are
supposed to benefit from such transparency.
The Centers for Medicare & Medicaid Services (CMS) proposed
the requirement hospitals post payer-negotiated rates for certain shoppable
services starting on Jan. 1, 2020, as part of its outpatient payment rule earlier this
month. The proposed rule is open for comment now, and CMS must release a final
rule by November.
(Lia
Shaked/Questex)
CMS projected in the proposed rule that the cost for
implementing the new transparency requirement would be around $1,000 per
hospital. However, some hospitals are balking at that figure, because their
contract rates with insurers are not automated or online.
“Yesterday, I spoke with a 700-bed hospital in the Midwest that
has over 600 contracts,” said Rick Louie, managing director of data analytics
consulting firm Hospital Pricing Specialists. “They said it’s virtually
impossible to display every contract rate in a searchable form, regardless of
infinite time and money. If a 700-bed hospital has these issues, the
cash-constrained rural hospitals don’t have a chance.”
The issues
There are “too many nuances with each contract,” said Louie,
whose company offers pricing reports to hospitals. Another major issue is how
to explain the context of payer-negotiated prices, such as why an insurer pays
a certain rate at a hospital.
For example, UnitedHealthcare may give an HCA Healthcare
hospital a good price for a cardiac procedure because they “have great outcomes
and get a ton of volume from United,” he added.
A hospital executive would have to “get this out in an easy to
understand format, but you are giving someone a loaded gun and not really
showing people how to use it,” said Derek Pierce, managing director of
consulting firm Healthcare Management Partners. “This ultimately will come out,
but I think it is going to take a while to get the message as to what these
folks are looking at.”
Several hospital executives detailed problems with
implementing the requirement to CMS officials during a recent stakeholder
call, including the issue with automating contracts. Smaller hospitals, in
particular, will be hit hardest. Agency officials responded by calling for
the hospitals to comment on the proposed rule with their concerns.
“We see other hospitals that have done a great job and put other
websites,” CMS Administrator Seema Verma told reporters during a roundtable
earlier this month. She mentioned websites made by larger systems such as the
Mayo Clinic or Intermountain.
But hospital groups such as the Federation of American Hospitals
have voiced major concerns with the transparency policy. Such opposition could
pressure CMS to hold off on implementing the requirement for 2020.
“I think it will ultimately come about within this
administration, but I think once they start trying to get into the details it
will take longer to get to the finish line,” Pierce said.
Hospitals are starting to take transparency seriously,
especially with the requirement starting this past January that they post list
“chargemaster” prices online.
CMS said when it released the rule that the new requirement
comes with a steep penalty of $300 a day for each day the facility is not in
compliance. Verma said when the payment rule was released that the agency
wasn’t happy with the compliance of the "chargemaster" transparency
requirement.
But Louie said hospitals are working fast to implement that
requirement, knowing that the push for transparency is evident.
“The old argument that 'charges don’t matter' doesn’t fly when a
patient is holding up a bill for an X-ray that is 10 times higher than what a
neighboring hospital charges,” he said. “Negative pricing stories like these
are becoming more prevalent, especially with social media, and cause
irreparable damage to a hospital’s reputation.”
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