Price Transparency: Looming Deadlines and the State of the Market
Price transparency … a much-debated subject in the healthcare industry and a hot topic on the minds of payers, providers and patients. And with potential compliance deadlines just around the corner, there is an added incentive for hospitals and health systems to create a plan for solving price transparency.
For facilities like yours, the best place to start is understanding the potential requirements of the new proposed executive order.
The Proposed Executive Order: Price Transparency Requirements
Based on a 2018 executive order, hospitals are now required to publish online gross charges and their chargemaster. This is generally viewed as far from adequate in providing patients with transparency into the price of healthcare—and in fact, further confused patients.
Taking it a step further, on June 24, President Trump signed an additional executive order that would require hospitals to publish negotiated or contracted prices for services in a way that’s clear, straightforward and accessible to all.
The proposed order would require:
- Hospitals to post negotiated, payer-specific rates for 300 “shoppable” services
- Includes 70 CMS and 230 hospital-selected services for each third-party payer
- BOTH machine readable and consumer-friendly formats
- Prices must be searchable by service, description, billing code and payer
Does the Executive Order Accomplish the Goal of Patient Pricing Transparency?
While the goal of the executive order is to use price transparency to create competition that lowers healthcare costs and enables patients to shop for the most affordable care, does requiring hospitals to post negotiated rates accurately represent what a patient will owe?
| What’s Required: Post Negotiated Rates | In Reality: Patient Cost Considerations |
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The reality is that for patients to fully understand out-of-pocket costs, patients must have insight into cost considerations like the price of a complete care episode, the specific coverage of their medical benefit, the related deductible and coinsurance impact, and how much of their deductible has been met. Without answers to these questions, the patient doesn’t have enough information to make a competitive decision—and competition is what the government is counting on to reduce prices.