What if the government issued a regulation and nobody listened? What if those affected simply said, we’re not doing it because we don’t have the resources, we don’t understand what you’re telling us to do, or quite frankly, we’d rather just wait to see if everyone else will listen and get in line?
We’re not talking about a bunch of rowdy spring-breakers refusing to wear masks during a pandemic. We’re talking about the administrators of America’s hospitals and health systems.
It’s been months since the Centers for Medicare and Medicaid Services (CMS) issued its hospital price transparency rule, and over a year since they were first introduced and challenged in court by the American Hospital Association. And yet, a look at the top 100 hospitals in America reveals that 65% are “unambiguously non-compliant.” Of those, 12% have not posted any pricing files, and 53% either fail to clearly post payer-specific negotiated rates with the name of the payer and plan or in some other way fail to follow the rule.
Why the childish “I’m not playing” attitude of these major institutions? David Audibert, President of akiro Consulting has a few thoughts.
“Other than resource complaints, I think most hospitals don’t have a fully developed and clear understanding of the rule and its’ requirements. There have been a lot of articles out there talking about high-level guidelines, but few go beyond scratching the surface.
The third dominant factor affecting adoption and compliance hospitals say is “Waiting to see what competitors do”, an interesting response. Fully 70% of hospital systems do not operate in a competitive market. I don’t think it’s “competitors” per se creating this fear and reticence, I believe it’s revealing this information to other payers that is the concern, and the fear that it will trigger a race to the bottom.”
How can hospitals deal with their most important financial secrets exposed?
“Clearly if a hospital is getting paid the highest price by its highest volume payer then there will be issues to be resolved and reconciled. It’s inevitable that future contract negotiations will include consideration of this data. Luckily, the playing field gets a little more level when price transparency comes to payers starting On January 1, 2022.
In the interim, hospitals have tools of their own in negotiations. Quality will re-emerge as a differentiator in combination with price. And contract negotiations can now commit guaranteed volume as a pricing component to the extent not already contracted.”
Do you think hospitals will move to comply in the near future?
“I do. The initiative has bipartisan support. It was written and implemented by the Trump Administration, taken to court by the AHA and 40 state hospital associations, and rejected by an appeals court at the end of last year. So, there’s really no legal ground for non-compliance.
Moreover, the recently confirmed head of HHS for the Biden Administration, Xavier Becerra was quoted during his confirmation hearing: “…what I can say to you is we will do robust enforcement to make sure price transparency is there for all Americans because for far too long, people have never had an idea what they’re going to pay when they walk into the hospital.”
If I were a hospital administrator, it would certainly stand top of mind for me.”
What are the challenges of assessing compliance?
“Obviously, a hospital’s internal team will have a view on appropriate representations to be made and the associated systems requirements. However, based on the actual attempts at conformity currently displayed across providers, there is a wide latitude of interpretation errors of what compliance is.
Given that HHS has promised “robust enforcement”, having a third-party vet your interpretation of compliance can provide valuable guidance for adjustments internally and show a good faith effort to reveal and implement the letter of the law in the event of an audit by CMS.”
Do you think price transparency is a good thing?
“I do. Ultimately, it translates into the relationship the hospital wants to have with the community. Does the organization want to be transparent, embrace the age of healthcare consumerism or be drawn through the repercussions of non-compliance?
This is the dawning of a whole new industry for Big Data. Pricing data, quality indicators, payer plan payment specifics all predict increased consumer awareness, participation and activism.”
Hospital administrators beware. The next time the Price Transparency phone rings, the voice on the other end will be charging you $300 a day for every day your hospital remains non-compliant. Will that be enough to force the industry to get on board? Hello? Is anybody listening?