Come January 1, CMS will begin enforcing new price transparency requirements for hospitals. Experts doubt that these regulations will do much to help patients shop for care, but they are optimistic that increasing the amount of publicly available pricing data will help tech companies develop tools that simplify pricing for patients.
\nThe post Hospitals Are Facing New Price Transparency Requirements, But Will They Truly Help Patients Shop For Care? appeared first on Above the Law.<\/p>\n
On January 1, the Centers for Medicare & Medicaid Services will begin enforcing new price transparency requirements for hospitals, including mandates to post more detailed information on the cost of drugs and the expected reimbursement amount from health plans.<\/p>\n
These changes seek to provide more clarity for patients, but the experts interviewed for this article doubt they will make much of a difference when it comes to helping consumers shop for care. However, they have optimism that increasing the amount of publicly available pricing data will help technology companies create tools that simplify pricing for patients.\u00a0<\/p>\n
One expert even predicted that healthcare providers may begin to adopt a more demand-driven pricing model, in which providers set different prices for various buyers of healthcare, facilitated by price transparency. And just maybe, he thinks there could be a future in which price transparency leads providers to contract directly with employers without having insurers in the middle.\u00a0<\/p>\n
There are three main changes that hospitals need to prepare for come January 1, said Joe Wisniewski, the assistant vice president of channel sales at price transparency software startup Turquoise Health<\/a><\/p>\n The first is that they need to post \u201cdrug unit of measurement\u201d and \u201cdrug type of measurement.\u201d\u00a0<\/p>\n This means that hospitals\u2019 price transparency information will have to include how a medication\u2019s quantity is measured, such as by milligram or milliliter, as well as specify the format, such as tablet or injectable. In other words, instead of just listing \u201cMedication A \u2013 $200,\u201d hospitals will need to specify \u201cMedication A, 50 mg vial (injectable) \u2013 $200.\u201d\u00a0<\/p>\n \u201cIn the old model, in theory, I can post a truckload of Advil, a jar of Advil, or one pill of Advil. I probably wouldn\u2019t be following the spirit of the rule, but in theory, I could post it however I wanted to post it, as long as that code was there,\u201d Wisniewski remarked.<\/p>\n The second change hospitals must prepare for is adding modifiers to their codes. Modifiers are two-character alphanumeric codes tacked on to a procedure or service code to provide extra details about the service being provided.<\/p>\n For example, the modifiers \u201cLT\u201d and \u201cRT\u201d indicate whether a procedure was performed on the left or right side of the body. Another common modifier \u2014 modifier 95 \u2014\u00a0 denotes that a service was provided via telehealth, Wisniewski pointed out.\u00a0<\/p>\n The final new piece of information CMS is requiring hospitals to post is the \u201cestimated allowed amount\u201d \u2014 which refers to the anticipated reimbursement amount that a hospital expects to receive from a health plan for a particular service.<\/p>\n Wisniewski has little confidence that these changes will make a meaningful difference in Americans\u2019 ability to shop for care. The average patient does not understand what a modifier is, nor are they well-equipped to perform calculations for complex drug pricing information, he noted.<\/p>\n \u201cA lot of this is just getting this data organized so that even industry experts can understand the price of healthcare. American healthcare pricing is just so complicated,\u201d Wisniewski declared.<\/p>\n The way this price transparency works in healthcare is utterly different from other industries, he added.\u00a0<\/p>\n \u201cThe best analogy I can give you is that shopping for healthcare is like if you showed up at the car dealership \u2014 and instead of being told the Prius was $35,000, you had to look through files telling you the seat belts are 300 bucks, the engine is 10 grand, and you have to sit there and add it all up. That\u2019s an unfair responsibility to put on a patient,\u201d Wisniewski remarked.<\/p>\n Another healthcare expert \u2014 Hal Andrews, CEO of market research firm Trilliant Health<\/a> \u2014\u00a0 noted that CMS\u2019 regulations only apply to hospitals, excluding other settings like physician offices, urgent care centers and ambulatory surgical centers.<\/p>\n He pointed out that about half of hospital admission arise from the emergency department.\u00a0<\/p>\n \u201cAbsolutely nobody on their way to the hospital in the ambulance checks out the price transparency website,\u201d Andrews remarked. \u201cSo for half of the hospital visits in the country, price transparency doesn\u2019t matter at all because people are in an emergent state \u2014\u00a0 they\u2019re in a crisis. Even if it did make sense, hospital visits are about 10% of the total visit volume in the country.\u201d<\/p>\n Essentially, the regulations represent a drop in the bucket in terms of healthcare utilization and corresponding price transparency.<\/p>\n Even though CMS\u2019 new price transparency requirements are unlikely to make a strong impact on patients, hospitals still need to take these new mandates seriously.<\/p>\n Another healthcare expert suggested thathospitals won\u2019t be able to implement these changes in the slow, haphazard way<\/a> they have approached previous price transparency requirements.<\/p>\n \u201cThe old logic for hospitals was to send over a machine readable file that they were making messy on purpose. They just didn\u2019t really want to deal with this, and they were doing the bare minimum. I think that\u2019s going out the door \u2014 the market is moving fast enough transparency is a hot enough topic. There\u2019s enough private equity getting into this space, and there are enough new companies popping up that health systems will have to play ball,\u201d said Charlie Byrge, senior vice president of revenue at Tendo<\/a>, a healthcare platform seeking to simplify patients\u2019 care journeys.<\/p>\n Both Byrge and Wisniewski think hospitals\u2019 disclosure of more detailed billing information will help tech companies to step in and create solutions that make pricing information more patient-friendly.<\/p>\n In other words, the more healthcare pricing information is publicly available, the more companies like Tendo and Turquoise can develop tools that truly empower patients. Hospitals are bogged down with responsibilities related to patient care and facility operations \u2014 they can\u2019t be expected to translate complex billing information into easy-to-understand estimated costs all on their own, Byrge noted.<\/p>\n Wisniewski of Turquoise pointed out that hospitals\u2019 price transparency compliance has improved over the last couple years.\u00a0<\/p>\n CMS\u2019 price transparency rule went into effect on the first day of 2021, and hospitals had a difficult time meeting the requirements for the first couple years. A JAMA study published in June 2022 showed that fewer than 6%<\/a> of U.S. hospitals were fully compliant with CMS\u2019 rule.\u00a0<\/p>\n