The Centers for Medicare & Medicaid Services (CMS) began warning hospitals in writing for noncompliance to list negotiated rates for 300 “shoppable services” in a consumer-friendly format. CMS’s rule – “Price Transparency Requirements for Hospitals to Make Standard Charges Public” – took effect January 1.
For now, CMS will not post the list of noncompliant hospitals on its website. Noncompliant hospitals have 90 days to correct the problem. After the grace period, CMS can levy fines of up to $300 a day. With the hospital price transparency rule, CMS intends to empower patients as consumers in the marketplace to help control and even reduce healthcare costs.
Requirements of the Hospital Price Transparency Rule
The hospital price transparency rule is controversial (which you can read more about in our recent white paper). The American Hospital Association filed an unsuccessful lawsuit to block the requirement. Industry experts predicted low compliance in the early stages while hospitals worked to understand the implications of the rule. Hospitals also cited the rule’s timing as burdensome given their priority of rendering care during a pandemic.
To be compliant with the hospital price transparency rule, health systems are required to:
- Make files machine-readable
- Include gross charge and discount cash prices
- List payer-specific negotiated charges
- De-identify gross and discounted charges
- Include descriptions of and codes for items and services provided by hospitals
The CMS noncompliance audit findings were also mirrored by a review conducted by Health Affairs (HA). In a study of the 100 largest hospitals in the U.S., HA found that 65 of the 100 hospitals were “unambiguously non-compliant.” Of the remaining hospitals, 35 appear to be in or exceed compliance. HA conducted their review in late January/early February. Therefore, compliance rates may be higher now.
Price Transparency & Cost Concerns
Yet, compliance with CMS’s price transparency rule is not enough for many patients, especially those who are concerned about the cost of their care.
In the last decade, health insurance deductibles have increased by more than 110%. Patients are burdened with higher out-of-pocket costs and are struggling to keep up. In fact, 56% of patients are worried their out-of-pocket healthcare costs could lead their household into bankruptcy, according to new data from HealthCareInsider.com.
These fears often prevent patients from seeking the medical care they need. HealthCareInsider’s research revealed high out-of-pocket healthcare costs were the leading factor dissuading patients from accessing care. These findings are aligned with Patientco’s own research. According to their latest patient and provider survey report, cost concerns topped COVID-19 as the #1 reason patients have skipped healthcare treatment.
Price transparency can help alleviate patients’ cost concerns so they don’t delay or skip care. That’s why Patientco engages with patients before they receive care with personalized price estimates. Patientco sends appointment reminders with integrated estimates that explain what patients owe and why they owe that amount. The technology engages patients how they prefer, using empathetic, easy-to-understand language.
Upfront, Affordable Payment Options Prevent Sticker Shock
However, hospital price transparency is most beneficial when it’s combined with personalized, affordable payment options. Patientco’s new survey report revealed that sticker shock from price estimates cause nearly 1 in 4 patients to cancel visits. Meanwhile, about 18% of patients ask about payment plans or other payment options after receiving an estimate.
Therefore, even if providers are meeting all the requirements of the hospital price transparency mandate, if they aren’t also offering personalized, affordable payment options alongside the estimate, they increase the risk of no-shows and increase the likelihood that patients will shop around for another provider with a lower cost.
With Patientco, once patients review their price estimate, they can access affordable, self-service payment options upfront. For example, patients can sign up for a payment plan with monthly payments that work for their unique financial situation. They can do all of this right from their smartphone. In addition to payment plans, Patientco allows patients to make a down payment on their estimated bill balance and get billed for the remaining balance after treatment. Patientco supports other payment options as well, depending on what works best for the health system and their patient population. These features empower patients to easily plan their budget and set up payment arrangements before receiving care.
Pave the Way for a Positive Patient Experience
With price transparency and affordable payment options upfront, health systems lay the foundation for a positive patient financial experience. When patients feel empowered and satisfied with their healthcare experience, they are more likely to return to your health system for their future care needs. They’ll also be more likely to refer friends and family to a health system they trust.
All too often, patients perceive their financial situation as a barrier that prevents them from getting the clinical care they need. Offering greater price transparency through upfront price estimates and personalized, affordable payment options is one way we can tackle this barrier to care.
Meet the Author: John W. Mitchell’s job titles have ranged from sailor in the U.S. Navy (broadcast-journalist aboard an aircraft carrier) to COO and CEO for several hospitals. In 2009, HealthLeaders Media named John and his senior executive team the Top Leadership Team in Healthcare for turning around a 90-bed, regional Washington hospital. In 2012, he started his own business, SnowPack Public Relations. John is widely published as a freelance reporter and writer in the hospital, healthcare, and medical sectors. More recently, his projects include writing content on behalf of Patientco. John is also the author of the novel Medical Necessity (four stars on Amazon), and he is a commercially successful landscape and wildlife photographer.