Sift Through Price Transparency Complexities as New Requirements Loom

Price transparency adherence data has been a mixed bag lately, so HealthLeaders reached out to an expert to understand why and figure out how revenue cycle leaders can help.

An October price transparency impact report highlighted a positive trend in hospitals adopting the law. According to the report, 76% of hospitals have posted a machine-readable file, 65% have posted a machine-readable file with negotiated rates, and 63% have posted a machine-readable file with cash rates.

While that report shows a progressive trend toward price transparency adoption, other reports have had the opposite to say just this year.

For example, in August PatientsRightsAdvocate.Org’s Semi-Annual Hospital Price Transparency Compliance Report stated that just 16% of hospitals were adhering to all necessary requirements. On the same hand, in June a study published by JAMA stated that out of the 5,239 hospital websites evaluated in the study, roughly 51% of hospitals did not adhere to price transparency requirements.

Sifting through studies like these can be as confusing as the regulation itself.

To give context to these studies and why revenue cycle leaders are seeing such varied numbers in price transparency adherence, HealthLeaders touched base with Chris Severn, CEO of Turquoise Health, to help break down the complexities of the matter.

Turquoise Health is no stranger to price transparency as it works through this data daily for its patient-friendly platform that lets patients compare providers, the costs of services, and health systems to make more informed choices for care.

HealthLeaders: Price transparency studies like this are being published left and right, but why are we seeing such large variances in these numbers across the board?

Chris Severn: At a high level, in the CMS mandate, hospitals must follow strict guidelines to be fully compliant. The placement of the patient estimate tool on the hospital’s website, the naming convention of machine-readable files, and the use of plain language (language that patients can easily understand) to describe a healthcare service are all defined and required within the rule.

Because of the vast array of guidelines included in the rule, it’s not uncommon to see findings similar to JAMA that are focused on “all price transparency requirements.” On the other hand, Turquoise Health’s studies lean more on the contents of the machine readable files and less or not at all on the patient estimate tool. That variance in the specific areas of focus leads to different estimates of adherence based on differing factors.

HealthLeaders: You have said you expect the timeline for total price transparency adherence to take about five years. Why is this? Is it due to staffing shortages or a lack of automation?

Severn: Staffing shortages and a lack of automation are certainly straining hospitals. On the whole, though, the healthcare industry is very slow to change, and these price transparency laws are still new and changing. 

The first waves of data are out and making an immediate industry impact, and down the line, we see that data starting to infiltrate other parts of the industry as well. As the adoption of the current rules and laws continues to increase, we believe that data will inspire positive changes, such as transparent contracting and less variability in pricing. Both of those would in turn help move the needle closer to fair prices of services, but those positive effects take time. 

Pictured: Chris Severn, CEO of Turquoise Health. Photo courtesy of Turquoise Health.

HealthLeaders: Why is it so important that we get 100% of hospitals to comply with every facet of this regulation?

Severn: This ties back to the first question regarding CMS’ strict guidelines for compliance. The higher percentage of completeness regarding the publication of machine-readable files and accurate patient estimate tools, the closer we are to empowering patients to gain confidence in knowing how much their healthcare services will cost. Adherence from both hospitals and payers also eliminates a significant burden of negotiating new rates because all rate data will be publicly available, meaning fair rate calculation becomes simpler and accessible.

Overall, these lead to lowering the cost of healthcare. 

HealthLeaders: What are some tips that revenue cycle leaders can keep in mind when looking to shore up price transparency adherence?

Severn: Make sure that you have a good understanding of the laws and requirements. There are a lot of resources out there that can help you get educated and understand where you and your organization can best focus your time. 

Also, keep an eye on the landscape for information. We’re seeing guidance, training, podcasts, and notice of any changes, such as a recent job aid to assist payers and providers with their Independent Dispute Resolution applications, published nearly weekly.  

HealthLeaders: What do you see coming in 2023 in terms of price transparency and other No Surprises Act regulations? What should organizations be on the lookout for?

Severn: We expect more changes to come in 2023. CMS currently has a request for an information period open specifically related to the creation of advanced EOBs (a part of the No Surprises Act). That request for information period is set to close in the middle of November, and we expect further guidance from CMS on how a fully compliant advanced EOB is defined. We also hope to see CMS issue a standard schema for hospital machine-readable files, similar to the Transparency in Coverage requirements for payers, and the move to a standard schema would simplify users’ ability to compile rate data.

The Patient Estimate Tool requirement of Transparency in Coverage also begins on January 1, 2023. This puts transparency data in the hands of all insured patients, at scale, and expands beyond just hospital prices (as we saw in 2021). 

We expect payer data will become more mainstream as payers fix initial hiccups, respond to quality assurance pressure, and simplify their monthly publication process. Ideally, non-hospital providers begin to proactively surface prices as their data becomes public through the payer data.

Startups (payers, providers, and software companies) continue to pop up and receive funding to innovate on the employer and patient financial experience.