What is Price Transparency in Healthcare?
In health care, Price Transparency means available price information of the services provided. This will help define the value of those services and enables patients and other care purchasers to identify, compare, and choose providers that offer the desired level of value.
The United States Government is currently making a reform in the Healthcare System in order to foster a system that delivers high-quality care at affordable prices through greater choice, competition, and consumer-directed health care spending.
Some payers and providers have already been providing pricing estimates for select items and services before care is delivered, however Healthcare services are expensive, confusing, and personal making difficult for consumers to effectively research and compare healthcare costs and quality.
The Centers for Medicare and Medicaid Services (CMS) has issued two final rules (hospital price transparency, and transparency in coverage) to help consumers improve their understanding of healthcare costs.
About CMS Regulations
The 21st Century Cures Act (Cures Act) contains key provisions to increase patients’ access to their electronic health information (EHI), drive interoperability, and address information-blocking practices. CMS and ONC released final rules to implement the Cures Act’s interoperability provisions and facilitate data exchange. Further, the administration released price-transparency final rules for hospitals and health plans.
The Hospital Price Transparency Rule went into effect on 1 January 2021. Failure to comply will come with penalties up to $5,500 per day, depending on hospital size and number of beds. Under the Hospital Price Transparency Final Rule, each US hospital is required to:
1. Publish clear, accessible pricing information for 300 “shoppable” services. This information must be published online, require no login or personal health information (PHI) for access and be offered in a consumer-friendly format.
2. Publish a machine-readable file that includes rates for all services.
The Transparency in Coverage Final Rule, issued in October 2020, requires health plans and self-insured employers to disclose detailed price information and cost-sharing information to consumers and other stakeholders by the following guidelines:
1. Publish three publicly available, machine-readable files that are updated monthly for in-network provider negotiated rates, historical out-of-network allowed amounts and drug pricing (starting July 2022).
2. Provide an online self-service tool for members with specific search functionality that shows pricing and cost-sharing information for 500 shoppable services (starting January 2023).
The No Surprises Act, passed in December 2020 as part of the omnibus spending bill, may intersect with the new price transparency regulations to impact contract negotiations between payers and providers. The law establishes an arbitration process starting January 2022 that will resolve surprise bills arising from out-of-network emergency services and out-of-network ancillary services (such as lab, anesthesiology, and radiology services) delivered at in-network facilities. The provisions of the new rule include:
1. Requiring all emergency services to be treated as in-network services without prior authorization.
2. Banning high out-of-network cost-sharing for both emergency and non-emergency services.
3. Banning out-of-network charges for ancillary care at in-network facilities.
4. Providing clear, advanced notice about out-of-network charges to consumers.
LEARN MORE (Hospital Price Transparency | CMS)
Strategic opportunities for healthcare providers and health plans
The price transparency rules should drive many health systems to consider their broader strategies beyond publishing their standard charges. With increased data-sharing, health systems will likely assess their market position, consider how to improve the consumer experience, and collaborate further with health plans and employers. The success of these initiatives, however, will likely depend on each health system’s market, goals, and capabilities.
We believe there is space for growth opportunities that organizations will benefit by complying:
- Build trust with consumers.
- Increase patient retention and increase new entries.
- Understanding market positions and producing new pricing strategies.
- Develop strategies for negotiating new contracts.
- Increase market share.
- Investing in targeted initiatives and capabilities for improving services.
- Develop or refine a consumer engagement strategy and execute on it.
- Leverage technology application in their health systems.
Technology to achieve compliance
A well-designed digital hospital front door that provides prices and cost information, offers financing terms, and an option to schedule the encounter, all in the same digital interaction can translate into higher point-of-sale collections and overall yield on self-pay accounts.
Consumer-friendly tools that make data actionable will play an important role in helping consumers understand their out-of-pocket costs and schedule the right bundle of services as advised by their physicians, so they get the care they want at the location of their choosing.
Price transparency and interoperability require significant investments by health systems. Organizations that are most prepared for a long-term journey toward greater transparency and interoperability will likely not only comply with the regulations but will also approach these steps strategically to gain a significant long-term competitive advantage.
Consumer’s opportunities for shopping healthcare services
As consumers grow accustomed to retail interactions that focus on stellar customer experience, they may expect more clarity around prices. A survey performed by our team, reveal that 69% of consumers acknowledged that data-sharing and transparency in prices will likely improve health outcomes such as: care coordination, quality of care, decision-making and consumer experience. Payer and provider education efforts should focus on adding more of that clarity for consumers, to help build long-term trust that strengthens member and patient relationships.
Consumers should take responsibility and action to engage with price transparency tools and inquire to their healthcare providers information about cost and financial impact for consuming healthcare services.
Explore more with our Consumers’ Guide
How can we help?
In Stairs Health we understand Price Transparency and how to pull the full potential of the growth opportunities expected by your health system. We will help you transform uncertainty into possibility, and rapid change into lasting progress.
Learn more about How can we help your organization
Related Solutions
1. STAIRS COMPLIANCE PLATFORM
A QuickStart implementation of our comprehensive solution designed to help providers comply with hospital price transparency rule
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2. PROVIDER PRICING DATA & CONSUMER ACTIVATION
Improve your organization outcomes with new applications and technologies for data analysis, data management as well as data ingestion and storage.
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