Pricing Transparency Posted Chargemaster, Now What?x Average Charges for Inpatient Cases (CSV)...

Pricing Transparency – Posted Chargemaster, Now What?

Deloitte & Touche LLP

February 2019

Pricing TransparencyCopyright © 2019 Deloitte Development LLC. All rights reserved. 2

Introduction – Deloitte AdvisoryPresenter

Tammy Trovatten, CHFP

• Manager

• Deloitte & Touche LLP

• Sacramento

[email protected]

+ 1 916 330 0998

mailto:[email protected]


Contents

Pricing Transparency 4

Provider and Patient Considerations 9

Provider Posting Examples 12

Future Considerations 16


Pricing Transparency


Pricing transparency is the availability of healthcare services information in terms of cost, quality, and outcomes.

Such information in conjunction with additional decision making toolsenable, empower, and provide guidance to health care seekers in identifying, comparing and determining a provider that addresses their circumstances.


Consumerism and transparency mingle

Shifts in the industry environment are redefining the provider pricing landscape

Comparison Shopping Cumbersome

Information difficult to locate and interpret

Consumers Not Directly Impacted by Price

Traditional employer-sponsored health plans defrayed the impact of

provider pricing

Limited Alternatives

Consumers constrained to a traditional care delivery model

Historically, healthcare Providers were relatively immune to consumer price sensitivity

Increase in the volume of customers in the marketplace due to the Accountable Care Act

Higher deductibles driving increased consumer price sensitivity

Heightened awareness of provider prices due to several high profile publications

Increase in availability of alternative, reasonably priced care delivery models

Improved accessibility of provider pricing information with new regulations to post prices online

Increase in regulatory scrutiny of provider pricing


Transparency helps mitigate the negative impact to consumers by:

Value focus begets transparency

Simultaneously

evaluate various

tradeoffs when

choosing a provider

Reducing Complexity

Generate greater ‘bang-for-the

buck’ for consumers’ health

care spend

Improve ability to plan financially and

monitor quality

Increasing Value

Providing Predictability


A number of significant federal guidelines, as well as increased pressure from consumers, are driving an increased sense of urgency across healthcare providers who are working to improve their price transparency practices

Catalysts for Change

Patient Protection and Affordable Care ActThe Patient Protection and Affordable Care Act requires that each hospital operating within the United States, for each year,

establish, update, and make public a list of the hospital's standard charges for items and services provided by the hospital

Fiscal Year ’15 IPPS Final RuleThe FY2015 IPPS Final Rule provided implementation guidelines allowing hospitals to either publish their standard charges

online or publish the process to obtain their standard charges online

Fiscal Year ’19 IPPS Final RuleThe FY2019 IPPS Final Rule updated the 2015 guidelines to require that hospitals make available a list of their current standard

charges via the internet in a machine-readable format on January 1, 2019, and to update this information at least annually, or

more often as appropriate

NEW


Provider and Patient Considerations


2019 IPPS Final Rule – Key Considerations -PricingHospitals are asking themselves these questions:

• How will we publish our entire CDM? What additional information must we publish along side these charges to ensure public understanding?

• What information, in addition to charges, will help substantiate how pricing was developed (acuity data, cost data, pricing methodology, standard pricing vs discount/self-pay charging, etc)

• Who will be accessing this information? - Assess National/Regional/Local impact with publishing charges

• Will we discuss charges being posted with key department stakeholders prior to publication?

• Should we consider adjusting our prices now and defining our market defensible pricing strategy?

• How will we monitor, revise, and provide ongoing support regarding price transparency for our organization?

• Are there any implications with ACA - 501R regulations and will we clearly define what our charges represent (full charge amount or self-pay discount)?

• What is our organizational approach (top-down/bottom-up) with pricing transparency and how will we incorporate pricing transparency into our short-term/long-term strategies?


What does this mean for Providers and Patients?

Embracing the transparency movement can allow for effective patient navigation with hospital pricing, while cultivating future financial strength with market defensible and rational pricing strategies

Patients are asking… Provider Opportunity

I want trusted and quality service without paying an arm and a leg

Providers with broad understandingand reliable quality information arebetter positioned to weather throughtoday and lead tomorrow

• Acuity metrics – Quality Data

• Access to local market charges

• Cost estimate data

• Providing patient insight tobilling

What do specific charges on my bill mean? Why am I receiving two bills?

What am I paying for exactly?

Where can I find reputable information?


Provider Posting Examples


Website contains a “Pricing Information” link under patient portion of website

Provider Website Posting – Hospital A

Chargemaster –10,000 lines

common charges

Top 60 DRG Gross

Charges

ER Visit Gross

Charges

In an effort to assist those individuals who may be seeking medical care services we t hink it is essential now

more than ever to provide pricing information so that people can make informed decisions about their

healthcare cost. This information allows consumers ….

What is Pricing Transparency?

“Pricing Transparency” is ….

Instructions

Below are links to listings of Inpatient DRGs and Procedures with hospital charges. This pricing is only a

reasonable estimate …:

• Length of Stay

• Conditions and Complications

• Medications and Treatments

• Diagnostic Testing

• Therapies

Due to the fact that the listing is organized by Inpatient DRGs and service descriptions, knowing the services

requested ….

For Your Information…

We are glad to extend our guidance through the financial part of your healthcare experience. This site will allow

you to:

• Obtain pricing estimates for healthcare services

• Obtain contact information to call us directly with questions about price estimates

• Better understand our billing process

• Obtain information regarding Frequently Asked Quest ions

To provide our patients ….


Website contains a “Chargemaster and Cost Estimator” link under billing portion of website

Provider Website Posting – Hospital B

Chargemaster –100,000 lines of

charges

Physician and

Outpatient Services

Only

No specific ER charge information

This cost calculator was created as a resource to help inform you and your family about costs for frequently used health care services provided by physicians such as office visits, lab tests or X-rays. At this time, the Cost Estimator provides estimates for outpatient and physician services only, not hospital stays.

The estimated patient cost is just an estimate. The estimated cost is not a guarantee ….

The estimated cost is specific to the service you choose and may not include additional services …. Your final out-of-pocket cost may be influenced by many other factors ….

Chargemaster - Download the Medicare-mandated hospital chargemaster file. The chargemaster does not reflect the prices payors or patients pay.

Download the chargemaster file – Excel

Open Chargemaster link


Website contains a “Price Transparency” page but under community portion of website

Provider Website Posting – Hospital C

Chargemaster –15,000 lines of

charges

Average Price for

200 DRG’s

No specific ER charge

information

Price Transparency: Charge Master Standard charges for our services are made available for your review. This listing of charges is called the “charge master.” Hospital pricing is complex, in part ….

For charge master disclosure purposes, the rates listed represent the highest amount charged for the service listed – most people, however, pay less than these listed amounts. Charges are …. In addition, we have provided a listing of services by DRG (Diagnosis-Related Group). A DRG is ….

• Charge Master (CSV) • Average Charges for Inpatient Cases (CSV)

Patients seeking an estimate of personal liability should contact Customer Service:

Hours: 8:30 a.m. to 4 p.m., Monday – Friday

Phone: ###-###-#### Toll-Free; TDD ###-###-####

Email: [email protected]

* In compliance with Chapter 2 of Division 2, commencing with Section 1339.50 of the California Health and Safety Code, and the Centers for Medicare and Medicaid, Fiscal Year 2019 Inpatient Prospective Payment System Final Rule, 83 Federal Reg. 41144.


Future Considerations


The requirements and recommendations below, provide a roadmap for meeting federally-mandated* price transparency requirements and improving the overall experience of healthcare customers

Preparing for the Future of Price Transparency

Price Transparency

Hospital service and item prices must be made public by

January 1, 2019

• Report all facility charges using patient-friendly terminology and industry standard

encounter-level codes – APC for outpatient and DRG for inpatient; alternatively, report

facility charges at the chargemaster level

• Accompany standard charge data with peer market data to illustrate price fairness

• Pair standard charge data with quality metrics that speak to facility ratings, highlight

patient experiences, and demonstrate the value of care

Customer Access

Charge / Pricing data must be available online, and in a

machine readable format (i.e., in a file format that can be

processed by a computer)

• Develop a standard webpage optimized for customer research; enabling search

functionality based on consumer-friendly terms

• Make educational material regarding healthcare pricing and your system pricing

philosophy (i.e., value equation) available alongside the charge data

• Prepare a media statement and share with PR/marketing /communications and with

patient-facing resources in the case of media and patient inquiries

Living Data

Charge / Pricing data must be updated at least annually,

and include a date on the file

• Initial implementation should occur by January 1 2019, and in future years should be

aligned to fiscal year updates

• Interim changes/updates should be made quarterly to ensure accuracy of data and

mitigate the potential for misalignment between posted standard charges and patient

EOB and billing information

• Collaborate with payors on the system’s value equation and involve them in

transparency efforts

Requirements Implementation Recommendations

*Meeting the federally-mandated requirements may not satisfy more stringent state-based transparency requirements


Roadmap to Transparency ImprovementSet the Stage

0-3 Months

Evolve and Enhance

12-24 Months

Standardize for Scalability

3-12 Months

FY ’19 IPPS Final Rule

Deadline

Key

Updated CDM

Live

Quarterly Updates to Online Standard Charge Data

Align to Industry StandardsReport all facility charges using patient-

friendly terminology and industry

standard codes

Capture Comparator DataAccompany standard charge data with

peer market data to illustrate price

fairness

Tell a ‘Quality’ NarrativeFurther enhance your customer-facing

charge data by including quality metrics

that demonstrate the quality of care in

conjunction with the cost of care

Sort by Customer InterestPost charges in order of services most

often researched by customers

(shoppability) as opposed to those most

often performed (service volume)

Invest in EducationThrough your pricing webpage, make

resources available that educate

customers on healthcare pricing broadly,

and your pricing philosophy specifically

Price Transparency Initiative

Customer Access Initiative

Living Data Initiative

Ongoing Initiative

Planning Milestone

Enhance Ease of AccessProvide search functionality that simplifies the

process of finding online pricing data for specific

services; linking search results to your

appointment scheduling system can further

improve the customer experience

Understand the Competitive

LandscapeConduct benchmarking research into the

pricing data of local comparator

shoppable and price sensitive services

Help Staff Share the

Value PropositionProvide patient-facing staff

with updated talking points

that highlight the ease with

which patients can access and

understand pricing

information

Develop/Update

Pricing StrategyRefresh or begin

development of the health

system’s pricing strategy to

include the customer’s

pricing experience

This presentation contains general information only and Deloitte is not, by means of this presentation, rendering accounting, business, financial, investment,

legal, tax, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a

basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should

consult a qualified professional advisor.

Deloitte shall not be responsible for any loss sustained by any person who relies on this presentation.

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