Possible Changes to Hospital Price Transparency Requirements
With the February 25th White House issuance of an executive order[1] “Making America Healthy Again by Empowering Patients with Clear, Accurate, and Actionable Healthcare Pricing Information”, we are again faced with new challenges around Price Transparency.
The requirements are not detailed but they do give us a few particulars:
(a) require the disclosure of the actual prices of items and services, not estimates;
(b) issue updated guidance or proposed regulatory action ensuring pricing information is standardized and easily comparable across hospitals and health plans; and
(c) issue guidance or proposed regulatory action updating enforcement policies designed to ensure compliance with the transparent reporting of complete, accurate, and meaningful data.
The most concerning of these requirements is the use of “actual” prices rather than the currently permitted estimates. As we know in the practice of medicine, the extent of services to be provided in any patient encounter may not be determinable in advance. At the time of providing pricing information, there may be only two options. One is providing an estimate based on the most common price on some mathematical calculation such as an average of the primary service. Two, providing a list of prices based on the possible combinations of services. If the latter becomes the new requirement, this creates an entirely new workload for hospitals to comply with. Here are some examples:
- Laceration repair cannot be coded or presumably priced until the dimensions are known
- A simple colonoscopy may require additional procedures
- A procedure that is planned as simple may end as complicated
And then think of the complications of determining an inpatient case and rate before admission.
The executive order refers to “actual prices”. As we all know the financial responsibility of a patient is only loosely based on the price charged. The amount the patient will be required to pay has several factors in the equation. Meaningful pricing information would be directed at the price that the patient will actually pay which in most cases is a small fraction of the total charge price. We would look forward to rules that encourage the open exchange of information that would help patients understand their individual financial responsibility based on the best estimate of services to be provided.
I look forward to reviewing the details of the pending regulations and plan to provide comments in our efforts to get the least arduous rule for providers.
Seth Avery, J.D., CPA
Sr. Vice President, Business Development
Centauri Health Solutions, Inc.