A Step Forward for Price Transparency
On Monday, June 24 President Trump signed a long-awaited executive order that aims to require health systems to disclose the costs of healthcare, including negotiated contract rates and out-of-pocket spending. While the Centers for Medicare & Medicaid Services (CMS) began requiring providers to publish a list of standard charges on the internet back in January, this new executive order should build upon CMS’ efforts and propel health systems to take more drastic measures toward true price transparency.
In his speech announcing the order, President Trump stated it is “virtually impossible for Americans to know the real prices and quality of service. As a result, patients face significant obstacles in shopping for the best care at the best price, driving up costs for everyone.” As patients have essentially become the payer in recent years, it is especially important that they have access to critical decision-making information regarding the cost of care—and, until now, this has been difficult to fully achieve.
“As people are paying more for their healthcare, they’re demanding more. They want quality and price transparency. This is just a response to the needs of patients,” CMS Administrator Seema Verma said in an exclusive HealthItAnalytics.com interview after CMS proposed the requirement in 2018.
In an industry marked by change, even more changes are on the horizon. As a recent article in RevCycle Intelligence points out, “the executive order will ‘fundamentally change the healthcare marketplace’ by directing HHS to require hospitals to ‘publicly disclose amounts that reflect what people actually pay for services in an easy-to-read format.’” While many questions remain, it appears the intent is to publish the holy grail of price transparency—a provider’s contracted allowable (i.e., reimbursement rates, per diem, percent of charge, carve-outs, etc.).
What Does It Mean for Healthcare Providers?
With this new mandate and the associated changes that are anticipated, many hospitals and health systems are left questioning appropriate next steps, both in the short-term and further into the future. Rather than providers determining if they are ready and able to publish list prices from their chargemaster, it seems the more pressing quandary is whether they are prepared to respond to patient queries, where patients are asking—or even demanding—to know the estimated total out of pocket expense for their procedure. The aforementioned contracted allowable is just one leg of a three-legged stool in achieving full price transparency; total procedure costs, not just line item CPT codes, and patient benefits down to the service type must also be accounted for to provide a credible, defendable estimate.
Access Director, SSI’s access management solution, provides the tools necessary to create price transparency and provide clarity for health systems’ patients and front-line staff. Click here to download the data sheet on the Estimation module or read about the solution as a whole.