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The flawed design is why hospitals are not following the rules of price transparency

Provider venture capital, money

“How do you make a spreadsheet or database customer-friendly with 50,000 lines of highly technical, clinical billing information?”

This is the question that Niall Brennan asked in a recent interview after the first sting penalty imposed by the Centers for Medicare and Medicaid Services in the Health System in Atlanta. Having served as CMS’s chief data officer and senior analyst at the Medicare Payment Advisory Commission, he has been closely observing the enforcement of price transparency legislation over the past year and a half. He and other price transparency experts believe the CMS rule is fundamentally flawed in its design and poses an incredibly tough question in hospitals, but health technology companies should be able to help. Given that Compliance rates Will remain low And CMS is starting to pay big fines, as hospitals’ efforts to find an answer to their question are becoming more urgent.

CMS started implementing it Price transparency rule On the first day of 2021. The law requires hospitals to post their total fees, payer-specific negotiation fees, recognized minimum negotiation fees, unrecognized maximum negotiation fees and cash prices on a machine-readable file on their websites. This mandates that hospitals must publish the cost of 300 commonly used services to their website in a customer-friendly manner.

Recent A Study Published in Journal of the American Medical Association It found that less than 6% of hospitals fully adhere to the CMS’s price transparency rule. Compliance has been low since the law was enacted two years ago, but the penalties the company proposed for compliance initially “had no bearing on whether or not they complied with the hospital,” Brennan said. He believed the high impetus for hospitals to comply was “whether a penalty was imposed in a court of public opinion,” which referred to a media coverage that placed the hospitals in a flattering light for their compliance or failure to post them in an accessible manner.

On June 7, however, things took a turn. The CMS then clapped Northside Hospital in Atlanta, with a $ 1 million fine, and CMS’s anger over the lack of compliance was the country’s first health care system. Brennan said he was confused by the fines because CMS had issued hundreds of warnings to hospitals a couple of months before but had actually imposed fines on one health system.

Why Northside Hospital has been fined but others are unaware of it, many speculate that the health system’s leadership may have been particularly disruptive in their interactions with CMS. The $ 1 million fine is an unexpected cost that puts pressure on the CFO of any hospital as the fines trigger greater compliance by hospitals.

Marcus Dorstel, Vice President of Operations at Price Transparency Software Initiative Turquoise HealthIf CMS continues to offer fines like Northside Hospital, hospitals agree that compliance must be taken more seriously.

“The hospital’s leadership may get to the point where it is difficult for the board or shareholders or the community to justify why they have this multimillion-dollar cost line in their books for not complying with federal law,” he said.

Dr. Pierre is chief digital officer of Prisma Health, based in South Carolina. According to Nick Patel, there are some reasons why hospitals can find it difficult to meet CMS requirements. First, there are many permutations of how much a procedure can actually cost, making it virtually impossible to create an accurate estimate of what a patient will pay. For example, the actual cost of gallbladder removal due to surgical adhesions, excessive bleeding, or other unexpected complications that can occur during surgery can cost thousands of dollars more than what the patient sees on a price assessment tool.

“This is a good estimate for ‘repair’ as your mechanic or air conditioning company will give you,” Dr. Said Patel.

Another reason why price transparency is tricky for hospitals is that patients are mainly concerned about the cost of leaving their pocket, not the “retail” or “adjustable” cost. As this varies from patient to patient based on their health plan and deductible, the technical lift for hospitals to calculate accurate estimates Much heavier.

The difference in care in the health services industry makes it difficult for hospitals to provide effective pricing transparency tools. The documentation, coding, and other ancillary fees involved in the medical billing process are quite complex, and surgeons may have different preferences for the amount of equipment they use for each case, according to Dr. Said Patel. He said hospitals should continue to work on ways to reduce the difference in care to better quantify costs.

All these complexities in the medical billing process mean that patients can rarely understand the price transparency data they see. Brennan said he has spoken with doctors who say they are unable to understand the price information their hospital has posted, so it is more optimistic to expect customers to be able to digest the information that CMS asks hospitals to post.

Dorstel is similar to its startup and other healthcare software companies Healthcare Bluebook And Cedar – Most hospitals can play a significant role in speeding up compliance because most hospitals lack the technical know-how and the staff needed to create devices that present integrated billing information in a customer-friendly manner. Cedar CEO Florian Otto said most hospitals that have talked about price transparency compliance have no staff with any experience building the kind of digital equipment CMS needs.

“I think the motives for regulation are very good. The death penalty is a little unfair because you’re asking the unit to do something where no product really exists,” Otto said.

When health technology companies like them start producing software to help hospitals comply with the CMS rule, Otto said they should focus not only on software but also on engagement. Most of the technology partners currently helping hospitals follow are enterprise software companies that make it difficult to create engaging devices because they build technology to meet the needs of the organization rather than individual users, he said.

Engaging in this sense means not only creating tools that consumers can easily communicate with, but also spreading the word that this price data may be available to them. Six months after CMS began implementing its rule, the Kaiser Family Foundation surveyed Found Only 9% of US adults nationwide know that hospitals need to disclose their price information online.

The fact that some Americans seem to be using price transparency data to shop for care has not come close to achieving its stated main goal: to give patients more power. Otto said the minimal awareness and use of hospital pricing data may not be a problem at present because the equipment that hospitals post is too complex to help patients really shop for care.

“Hospitals are not complying because it is extremely tough to do something that doesn’t really confuse patients,” he said. “That’s exactly what happens when you make it mandatory by CMS – it really confuses patients.”

Photo: adventtr, Getty Images

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