Medicare Compliance & Reimbursement

Tip: Choose your additional 230 shoppable services wisely.

With Medicare rules seemingly coming out of the woodwork lately, it’s easy to push some policy changes to the side for a rainy-day compliance check-up. However, the hospital-based price transparency rule is not one you should put on the shelf. In fact, you may want to address the rule’s requirements, which are slated for a January 2021 start date, ASAP.

Context: Since the Centers for Medicare & Medicaid Services (CMS) dropped two bombshell rules to give patients more options while holding hospitals to a new set of price transparency rules and regs, the healthcare industry has been up in arms. CMS published the two rules, the Calendar Year (CY) 2020 Outpatient Prospective Payment System (OPPS) & Ambulatory Surgical Center (ASC) Price Transparency Requirements for Hospitals to Make Standard Charges Public Final Rule and the Transparency in Coverage Proposed Rule, in the Federal Register last November.

Reasoning: According to CMS, the feds want the prices of some services and items to be available to the public at large to “empower patients and increase competition among all hospitals, group health plans and health insurance issuers in the individual and group markets,” explains a fact sheet on the rules. CMS also wants hospitals to have these “standard charges” online for patients’ perusal and ready to roll by Jan. 1, 2021— which will be a massive undertaking for many organizations.

“Under the status quo, healthcare prices are about as clear as mud to patients,” said CMS Administrator Seema Verma, in a release on the rules. “Kept secret, these prices are simply dollar amounts on a ledger; disclosed, they deliver fuel to the engines of competition among hospitals and insurers. This final rule and the proposed rule will bring forward the transparency we need to finally begin reducing the overall healthcare costs.”

Caveat: Getting your ducks in a row in less than a year is challenging for even the most adept organizations. Experts warn that you should prepare now to avoid issues later on.

“This is absolutely going to be a monumental amount of work for most hospitals. CMS originally proposed for an effective date of Jan. 1, 2020. An effective date very few, if any, hospitals would have been able to meet,” cautions attorney Benjamin C. Fee, with Hall, Render, Killian, Heath & Lyman, PC in the Denver office. “While CMS did decide to extend the effective date to Jan. 1, 2021, it declined to extend the effective date any further or to create an alternative effective date for rural hospitals.”

Who Is Impacted by the Final Rule?

Many of the mandates under the rules will require hospitals to make serious changes including coordinating price fixes, negotiating with health plans, and ensuring health IT is up and running with online readable files for patients. Experts warn that organizations should not slow-walk their plans for addressing the rules’ requirements.

Final rule basics: First, remember these policies don’t apply to all Medicare providers. CMS is requiring only hospitals to publish their “standard charges” in a readable format for patients; individual practitioners and suppliers aren’t part of the price transparency final rule — for now.

Important: “Some commenters did request that CMS apply the requirement to physicians, ASCs, clinics, community health centers, and skilled nursing facilities, but CMS declined to do so,” explains Fee. “Instead it kept to its original proposal to apply the rule to all institutions that are recognized as hospitals under state law.”

Since physicians and group practices often interact with or are employed by hospitals, the price transparency requirements may still impact them in an adjacent manner. “The definition of ‘items and services’ does, however, include the services furnished by physicians and non-physician practitioners [NPPs] who are employed by the hospital. So, in some cases, services provided by a physician will be included in information that is made available to the public.”

Know These 3 Rule Essentials

It’s critical that hospitals know these top three price transparency policies in the final rule:

1. Standard charges: According to the hospital price transparency final rule, hospitals will need to post their “standard charges” online in a “comprehensive machine-readable file.” CMS offers that “standard charges” include “gross charges, payer-specific negotiated charges, the amount the hospital is willing to accept in cash from a patient, and the minimum and maximum negotiated charges,” the rule fact sheet notes.

Plus, the readable, publicly available file must include common billing codes as well as descriptions for the services and items.

2. Shoppable charges: As part of their requirement, hospitals must annually list at least 300 common “shoppable services” in a consumer-friendly format. There are 70 services that CMS requires every hospital to list. On a positive note, the agency allows hospitals to choose the other 230 or more to publish in their displays.

Find the 70 mandated services at www.cms.gov/files/document/2019-12-03-hospital-presentation.pdf.

Tip: “As to the requirement that hospitals make public certain charge information, including payer-specific negotiated charges, for 70 specified shoppable services and as many additional shoppable services necessary to total at least 300, CMS did acknowledge that not every hospital will provide each of the 70 CMS-specified shoppable services,” stresses Fee.

CMS offers some leeway to hospitals without the resources to offer the mandated services and reach the shoppable services’ quota.

“In those situations, the hospital is only required to make public the required charge information for those services identified on the list that the hospital actually provides,” says Fee. “For example, many rural hospitals and critical access hospitals, may not provide MRI services, which is one of the 70 CMS-specified shoppable services.”

3. Enforcement: Medicare providers know that the feds are increasing their enforcement efforts across the board. It should come as no surprise that the hospital price transparency rule also includes a penalty clause. The finalized regs allow CMS powers to monitor and audit hospitals and use corrective action plans and civil monetary penalties (CMPs) to punish organizations not in compliance. Hospitals that don’t have their negotiated rates available in an online, consumer-friendly format can expect CMPs of $300 per day.

But: “Although CMS declined to finalize a formal grace period for hospitals to comply with the new requirements, I suspect CMS will be hesitant to issue civil monetary penalties in the first 12 months except in egregious cases of noncompliance,” advises Fee.

Stay tuned as Medicare Compliance & Reimbursement continues to analyze the hospital price transparency final rule and the “Transparency in Coverage” proposals in the issues ahead.

Resources: Review the 2020 OPPS final rule at www.govinfo.gov/content/pkg/FR-2019-11-27/pdf/2019-24931.pdf and transparency in coverage proposals at www.govinfo.gov/content/pkg/FR-2019-11-27/pdf/2019-25011.pdf.