The CMS hospital price transparency rule is up and running, and hospital revenue cycle management leaders are expressing their concerns. From challenges acquiring resources to working with medical billing companies for hospital billing services, this piece will update you on recent reactions to the rule, review what it entails, and cover challenges that 2022 has brought in meeting its requirements.
Hospital Revenue Cycle Management Leaders Are Frustrated
Hospital revenue cycle leaders are confused and burdened by the price transparency rule as they find their way to compliance with their websites and hospital billing services.
A recent KLAS report stepped out to understand the impact of the CMS price transparency rule by surveying 66 revenue cycle leaders on their response [1]. Overall, most felt the regulation supported the shift to a more consumer-focused approach that the industry has been taking by giving healthcare consumers more control over their costs. At the same time, they were largely unsure of just how effective the regulation has been.
Only half believe that the rule will have moderate or significant improvement on financial impact for patients, with half of the leaders who relayed this sentiment saying that the regulation needs more federal guidance and additional clarification. Their concerns included:
- Cost
- Data accuracy
- Patient ability to use pricing tools
Some hospital revenue cycle management leaders were concerned that their patients wouldn’t be able to understand the data that hospitals provide. At the same time, patients are often unaware that they even have access to online pricing information for hospital services.
On the less optimistic end, 26 of the leaders said they believed that the rule won’t improve financial outcomes at all, with seven reporting that they believe the regulation will actually hurt patient financial situations. Regardless of how leaders feel about the future effectiveness of the regulation, compliance has been a challenge for many. The report found that the majority are complying just to steer clear of monetary penalties, with many saying they only plan on investing the minimum required until they get more clarity.
Hospitals Are Struggling
Hospital revenue cycle leaders did share their thoughts on their top challenges. The first, with 34 respondents claiming it, was that achieving compliance was a problem because of the difficulty navigating complex and confusing regulations – some of the respondents shared that their organizations were working with outside consulting groups to find their way. The second biggest issue was insufficient resources.
According to a report from PatientRightsAdvocate.org, less than 20% of hospitals are in compliance with the CMS price transparency rule. They reviewed 1,000 hospitals and their websites between December 7, 2021 and January 28, 2022. The nonprofit had previously reviewed 500 hospitals in July of 2021, finding that only 5.6% were in compliance with the new requirements. The recent review, while better, found that only 14.3% of the hospitals were in compliance with all of the requirements of the price transparency rule – meaning 85% were not meeting at least one of the requirements. The most common area of noncompliance was failure to post a machine-readable file of standard charges, which 85% of hospitals hadn’t done. Another 84.9% hadn’t provided national drug codes and associated prices for the pharmacy items and drugs their health system offered. A little over 600 hospitals hadn’t published the required amount of negotiated rates and another 586 failed to post all payer-specific negotiation charges that the rule requires.
At the same time, 84% of hospitals had published a price estimator tool, but 20% of those hospitals didn’t allow uninsured or self-pay individuals to access discounted cash prices [2].
How the Rule Works
The hospital price transparency rule went into effect on January 1, 2021, requiring most licensed hospitals or institutions approved as meeting licensing requirements to post their standard charges prominently and publicly on a website. The charges have to be posted as both a machine-readable file and a consumer-friendly display of at least 300 “shoppable services” (or, if the hospital provides fewer than 300, however many they do provide). This display must use plan language to describe services, grouping them with ancillary services. It also must provide discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum negotiated charges [3].
Hospital revenue cycle management leaders that do not comply may receive a warning notice, be asked to provide a corrective action plan, and be subject to a civil monetary penalty which could be published on a CMS website.
But listening to hospital revenue cycle management leaders, it becomes clear that they have multiple disincentives for moving forward. Hospitals are subject to a non-compliance penalty of a maximum of $300 per day, though a study has found that the cost of disclosure of negotiated rates could be higher than fines. Additionally, leaders are worried about rules changing and wasting their efforts to comply. An anonymous business office director stated,
“Like everybody else, we are reactive, and we do what we can. But we are hesitant to do more than what is expected or written because the price transparency rules may change. We don’t want to invest in technology or third-party vendors that are ill prepared for changes.” [4]
As you prepare your hospital billing services for an uncertain future of price transparency, know that it’s an excellent time to look at ways highly experienced medical billing companies can help you streamline your revenue cycle strategy and hospital revenue cycle management practices. To talk to a company experienced with making this shift, start here.
References
[1] V. Bailey, “Revenue Cycle Leaders Experience Price Transparency Rule Burden,” RevCycleIntelligence, 22 April 2022. Available: https://revcycleintelligence.com/news/revenue-cycle-leaders-experience-price-transparency-rule-burden.
[2] V. Bailey, “Only 14% of Hospitals Met Price Transparency Rule Compliance,” RevCycleIntelligence, 14 February 2022. Available: https://revcycleintelligence.com/news/only-14-of-hospitals-met-price-transparency-rule-compliance.
[3] U.S. Centers for Medicare & Medicaid Services, “Hospital Price Transparency,” 1 December 2021. Available: https://www.cms.gov/hospital-price-transparency/hospitals.
[4] N. Eddy, “Revenue cycle leaders express concern over price transparency rule,” Healthcare Finance, 27 April 2022. Available: https://www.healthcarefinancenews.com/news/revenue-cycle-leaders-express-concern-over-cms-price-transparency-rule.
