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As if there are not enough pressures on hospital executives at this time, now they are being required to abide by a new price transparency regulation.  Section 2718 (e).  It requires that all hospitals make information readily available to the public by January 1, 2021 or they will be fined up to $300 per day.  

It is not that a hospital executive would object to providing information to the public, but it is the concern that hospital contracting is very complicated and estimating the reimbursement rate for many services is not simple and straight forward.  Calculating an individual out of pocket is even more difficult.  It requires understanding the payor rules and reimbursement policies as well as the consumers insurance benefit plan and where that consumer is in regard to meeting deductibles, co-pay rates and other out-of-pocket details.  Even if a consumer can shop a service, they are going to have to understand the information being published, specific to their situation, which will require that they are communicating with their insurance company at the same time to determine their eligibility, benefit type, network participation and out-of-pocket responsibilities.

Also problematic, the contract details between the hospital and payers is expected to be kept confidential, in particular the rates.  It is unknown what will happen when hospitals publishing their rates in violation to the confidentiality provisions stated in their contracts occur.  As a ramification of publishing these rates, do you not think the payors will use that information in an attempt to further negotiate reduced rates to the lowest reimbursement rates published?  Hospitals have also been regulated in ways that forbid them to share their charges with other competing hospitals for fear hospitals will knowingly set prices in a way that may disadvantage the consumer.  Although it is not expected that price setting will result,  the regulations related to not sharing prices and how this will impact hospitals is yet unknoOf additional concern for the hospital executive is that by publishing these rates, consumers will ultimately migrate to the lowest paying insurance company, making it even more difficult to obtain or retain a profit margin.  Rates for negotiated Medicare, Medicaid and Exchange plans will not be easily understood by the public.  These plans for the most part are paying less than cost to the hospitals and therefore, hospitals are compelled to obtain higher rates from commercial payors to offset these losses.  With many hospitals already struggling to survive, this will be a further challenge.  Incorporating information and educating the consumer should be a part of publishing this information along with the appropriate disclosures.  

Nevertheless, the government has not backed down on their decision to put the regulation into effect January 1, 2021.  Hospital executives need to be preparing for this now among all of the other priorities they have on their plate, including but not limited to the complexities of COVID 19 protocols, reporting regulations and federal money that has resulted needing detailed accounting.  

As a result of reviewing the regulation and serving many hospitals in the capacity of managed care contracting and revenue cycle, much of this information has already been gathered for current clients.  JG Consulting is offering a discounted rate to current clients and further offering services to new clients to assist them in preparing for and complying with the regulations.  Services offered will include the following:

1.     Development of a comprehensive machine readable file that will include all five types of standard charges for items and services provided at the hospital. This file will be made available  to upload on the hospital website for ease of consumer access.

2.     Development of a consumer-friendly shoppable services list including the 70 CMS specified and 230 hospital selected services.  This file will be made available  to upload on the hospital website for ease of consumer access.

3.     Required data elements will include: 

o   A description of each item or service 

o   All standard charges (gross charges, payer-specific negotiated charges, discounted cash prices, minimum and maximum negotiated charges) that apply to each item or service when provided in, as applicable, the hospital inpatient and outpatient department setting 

o   Any code used by the hospital for purposes of accounting or billing for the item or service, for example, HCPCS codes, DRG codes, or other common payer identifier 

4.     Charges and reimbursement rates will be updated real time as they may change from new reimbursement rates by payor and charge master updates. An annual update will be reviewed and confirmed for accuracy.

Given you are a hospital executive struggling with how you will comply with this regulation in a manner that is both affordable and sustainable and would like a quote, please contact JG Consulting at ejgarten@embarqmail.com or visit the website and send your inquiry, using the contact us page at  www.jgconsultingassociates.com. 

We look forward to hearing from you.