As patients become more financially responsible for their healthcare as a result of their high-deductible plans, federal and state governments are pushing forward in their efforts to increase price transparency. In fact, on June 24th, President Trump signed an Executive Order that would require insurers, doctors, hospitals and others to provide pricing information about the negotiated cost of care. This new directive would provide patients information on the negotiated rates between insurers, hospitals, and physicians. Many believe that a key reason behind skyrocketing healthcare costs is the fact that healthcare prices are largely hidden from patients. Transparency creates competition, and competition drives down prices because patients can shop for their care.
With Trump’s new directive, DHHS will look to require hospitals to post charges and negotiated rates online and others such as insurers and healthcare providers, to disclose information on expected out-of-pocket costs. Currently, healthcare prices aren’t transparent as rates are negotiated in secret. The hope here is that by disclosing rates, key stakeholders will have to compete on quality and price.
The emphasis of Trump’s Order will largely be on “shoppable” services such as X-rays, lab tests and colonoscopies, etc. These services are often performed in an outpatient setting. While not all providers will be required to disclose their pricing, patients will soon expect it. In the end, providers will want to appear as being credible and transparent and will most likely post their pricing as well.
What this means for hospitals
Within 60 days from June 24th, HHS shall propose a regulation “to require hospitals to publicly post standard charge information, including charges and information based on negotiated rates and for common or shoppable items and services, in an easy-to-understand, consumer-friendly, and machine-readable format using consensus-based data standards that will meaningfully inform patients’ decision making and allow patients to compare prices across hospitals.”
For hospitals, prepare now by pulling together a listing of both gross and payer-specific negotiated charges. This list should include all items and services provided by the hospital. As of the July 29th proposed rule by CMS, this information should be made public online and allow patients to compare standard charges from hospital to hospital. This information should be in a machine-readable format and include the following:
- Common billing or accounting codes
- A description of the item or service
- Negotiated charges for common shoppable services that can be scheduled by a patient in advance. Examples of shoppable services include outpatient visits, x-rays, laboratory tests and bundled services.
- Information that is posted in a manner that is consumer-friendly. This means that charges must be “made public in a prominent location online (or in written form upon request) that it is easily accessible, without barriers, and searchable. It also means the service descriptions are in ‘plain language’ and the shoppable service charges are displayed and grouped with charges for any ancillary services the hospital customarily provides with the primary shoppable service. “
To ensure hospitals comply, the rule also proposes new enforcement tools to monitor, audit, provide corrective action plans and monetary penalties of $300 per day.
What this means for healthcare providers
Within 90 days, HHS and the Departments of Labor and Treasury are soliciting comments on a proposal “to require healthcare providers, health insurance issuers, and self-insured group health plans to provide or facilitate access to information about expected out-of-pocket costs for items or services to patients before they receive care.”
For physicians who perform services in-office or in an outpatient facility, often your pricing may be lower than those performed at a hospital. Use this to your advantage and post this information on your website. Also providing patients with an accurate, upfront estimate and offering a payment plan option will help patients focus on their health and not money.
What you should be thinking about and planning for
- Identify your high-volume and shoppable services.
- Plan for how to best post your pricing information on your website. This may mean adding a healthcare financing section with a searchable online directory of prices or pricing calculator to your website.
- Educate staff on how to discuss patient financial responsibility. As patients gain access to pricing information, communication will be key to ensuring patients understand their financial responsibility. Be sure to:
- Convey that prices are just estimates and that the cost could change based on a patient’s health or complications.
- Discuss what is included and what is not.
- Advise patients what other medical bills they may receive for services provided.
- Make it easy for patients to request a cost estimate. Add a secure online form to your website that allows patients to request an estimate that takes into consideration what their health plan will cover and what the patient is responsible for. It is important to get as an accurate estimate as possible as inaccuracies can lead to inefficiencies and costs due to generating refunds and patient bills.
- Think about bundled pricing. When patients undergo a procedure, they typically receive several services. When patients seek pricing information for a procedure, they really want to know the total cost for that “episode of care”. Care episodes can complicate cost estimates. Hospitals and practices who offer all-inclusive bundled pricing may be in a better position to serve patients, offer more accurate price estimates and build volume.
Price transparency in the healthcare industry will not happen overnight and there may be many attempts to derail it, but make no mistake, the day of accessing pricing information online for healthcare services, especially shoppable services, is upon us.
Contact Practis to learn how you can prepare your website for healthcare pricing transparency.
