Price Transparency: Ready Set Go!

photo of Maria Todd reviewing managed care contracts with a client

To ensure that hospitals comply with the requirements there will be new enforcement tools, including monitoring, auditing, corrective action plans, and civil monetary penalties of US$300 per day.

The Scary Part:

  • You have less than 4 months to comply.
  • You don’t have bundled prices for your procedures.
  • You have no existing web page designed and SEO treated to publish them on a website or web page.
  • You have no way to update these bundled case rate prices and keep them updated in real time as prices, supplies, staffing, new physicians, and contract terms and conditions are updated.

Come January 2020, that’s going to be a problem that could cost you huge penalties and fines. 

Here’s what you need to comply:

  • Make public your usual and customary rates (defined as two types of charges: gross charges and payer-specific negotiated charges) for all items and services provided by the hospital.
  • Publish online standard charges in a machine-readable file that includes additional information such as common CPT/HCPCS codes used by the hospital and a description of the item or service. The intention is to provide a common framework for comparison shopping from facility to facility.
  • Make public payer-specific negotiated charges for the 300 most common services, in a manner that is consumer-friendly. (That’s going to be a big task if you have a portfolio of 400+ contracts, typical for most hospitals in the USA). Round ’em up now. Most providers have no clue where all their contracts are located. And many that they can access are incomplete. Inventory the files and ask for replacements now! Don’t wait!
  • Your list must be sorted to include x-rays, outpatient visits, imaging and laboratory tests or bundled surgery packages including pre-and post-delivery care inclusions and exclusions.
  • “Consumer-friendly” means the hospital price information 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 service charges are displayed and grouped with charges for any ancillary services the hospital customarily provides with the primary service.  

The solution:

  1. The basic data: Building the tables to make package pricing less risky and more accurate takes time and research and know how to build the formulas necessary to quote prices.
  2. Contracts in place: To bill single-line-item bundled prices (professional and technical component on labs and imaging, or surgery) you’ll also need contracts in place with the medical staff including the written and contracted authorization to bill on their behalf with a minimum 1-year term.
  3. A means to publish: You’ll need a webpage design and layout. It will require testing, SEO treatments, images, and a way to easily update prices as pricing elements change due to costs or contract modifications at renewal time.
  4. A competent project manager: to manage the research, read and interpret the contracts you haven’t reviewed since forever, build the process, timelines, answer questions and keep your team on schedule. But what if you don’t have available staff with the competence to get the job done or a project manager who can lead your staff through this process in time?
  5. A subcontracted SWAT team: You may need to hire temporary talent to get this job done if your staff has no time or competency to create this and be fully-executed by December 31st.

You’ll need to have the following information ready for your chat with Maria:

  1. How many payer contracts you have and if they are all accessible and complete. If not accessible or complete, what you’ve done to fill in the gaps.
  2. If you have a summary page of Contract Financial Terms (CFT) for each contract in your portfolio.
  3. If you will bundle prices using employed physicians or independent medical staff, or a combination of both.
  4. If you have a subcontracted agreement and authorization to bill already executed with the physicians.
  5. If you have addressed the website design, SEO and publishing strategy.
  6. If you know your costs per procedure, staffing costs, OR time, Pre-op time, PACU time, implants drugs and supply costs, and other data necessary to construct the rates for the services you’ll publish.