The Centers for Medicare and Medicaid Services mandated that the hospitals comply with the new price
transparency rule from January 1, 2021. The new law meant that hospitals needed to provide
transparent pricing for all kinds of medical services that they offer. As one year comes to a close
post its implementation, several studies have examined how the medical billing systems and other
administrative services changed with the rule. While healthcare experts believe that the overall
implementation of the rule will benefit the healthcare ecosystem in many ways, not all healthcare
systems have complied with the law.
Medical billing systems have gone through several changes in the last two years since the beginning
of the pandemic. While some have been temporary, some were declared permanent by federal law.
Managing the continuously
evolving regulations has been challenging
for the administrative team on the revenue cycle end. The healthcare management must know how and
why the upcoming rules will affect the existing workflow.
What is the price transparency rule?
The price transparency rule has a clear set of two clauses as per the announcement from the CMS. The
basic guideline is that the hospitals need to provide the price for their offered services on an
open platform like their website. The two parts of the rule are:
The hospitals need to list services with their pricing in a ‘consumer-friendly format’ to make
healthcare more like an easy shoppable experience.
The hospitals also need to comprehensively prepare machine-readable files that mention all of their
items and services.
As mentioned by the CMS, the main aim of this rule is to empower patients to compare the prices and
take a final call on their hospital of choice.
Are all hospitals compliant with the new rule?
In their announcement, the CMS mentioned that the federal body would be auditing all hospitals and
their websites to ascertain if they are compliant with the price transparency rule from January
2021. They had also opened up a mail id designated for the hospital price transparency rule where
consumers could write if they found any hospital not mentioning their service price list on their
website.
However, a recent study published by the Baltimore-based Johns Hopkins Bloomberg School of Public
Health revealed some negative numbers regarding the implementation of the rule. Here is what came up
in their report:
More than 50% of the hospitals in the United States have not been entirely compliant with the price
transparency rule as of November 2021.
75% of hospitals in Hawaii, Rhode Island, District of Columbia, Michigan, and Indiana were found to
be following the new rule.
On the other hand, only 25% of the hospitals in Washington, Delaware, Louisiana, and Maryland were
compliant with the law.
Statistical analysis with the data points showed that if a hospital were in a region where other
hospitals were compliant with the rule, that particular hospital would be 42% more likely to follow
the law.
Therefore it was clear that the regional healthcare market scenario played a crucial role in
determining the compliance level of the health systems.
The study also found that the hospitals have different compliance levels based on their health IT
preparedness levels.
These points reveal that the new price transparency rule is yet to pick up pace throughout all
hospitals in the United States, with a few disparities in their implementation.
Why are hospitals taking more time?
it’s not right to generalize the reasons for the hospitals to take a longer time to comply with the
rules, there are specific points that the experts have highlighted in several surveys and studies.
Hospitals do not feel incentivized enough to reveal their prices on public websites. This is one of
the primary reasons they have not taken proper steps forward in that direction.
As highlighted in the previous study, not all hospitals have robust healthcare IT structure.
Many of the existing health systems are still not on their digital transformation journey yet, which
could also delay their compliance measures.
The hospitals are not in a position to invest an enormous amount of money in strengthening their
healthcare IT segment to comply with the new price transparency rule.
The healthcare systems have suffered from heavy losses and extreme staff shortages in the last few
months. This could also pose a significant risk to their finances.
Some leaders also believe that the insurance panels could provide better information on the pricing
structure than the hospitals.
Taking the patient’s point of view, they are more interested in knowing their out-of-pocket
expenditure for each healthcare service rather than the pricing structure of all the hospitals.
Contribution from the insurance companies could prove to be more beneficial when it comes to
providing the patients a truly consumer-friendly experience.
How are the medical billing systems affected?
The medical billing systems are on the path to evolve with the changing patterns of the pricing
rule.
The first approach to price transparency has been focused on the hospital’s side. Healthcare leaders
are of the opinion that the Transparency in Coverage rule, effective from 2023, could bring more
significant changes to the medical billing systems.
The billing teams could avoid unnecessary confusion about the coverage when sending in the claims
with the coverage plans already given on the public platform.
The coverage transparency rule could bring more clarity to the medical billing systems by letting go
of delays in revenue flow.
This could also help the provider organizations get a regular flow of cash without the complexities
of dealing with the different rules of the separate insurance panels.
Hospitals are making a slow but steady transition to the price transparency rule, but true
transparency will only come when all the stakeholders in the ecosystem have a proper role to play.
We hope this article helped you understand how the medical billing systems are changing with the
price transparency rule of the CMS. For any queries, please write to us in the comment section
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