On June 24, 2019, the President signed an executive order on Improving Price and Quality Transparency in Healthcare aimed to have insurance carriers and providers reveal the details of their pricing contracts. The idea is simple; if patients understand the price and cost of the service they seek they will make informed decisions and ultimately lower their out-of-pocket expenses, keeping money in their wallets. Initially, though, these rules may increase the red tape it takes for hospitals, physicians, pharmacies, and other providers to pass along the cost of compliance. The Health and Human Services (HHS) will be responsible for crafting exact rules providers have to follow and the final implications for patients.
This is not the first push the administration has had into the pricing transparency arena, only the most recent. Beginning January 1, 2019, all hospitals were required to provide their current standard charges for individual procedures, drugs, supplies, diagnostics, and common diagnosis-related groups (DRG) on their websites in a machine-readable format. Much of the information posted is difficult for an average patient to understand but is another occasion where CMS is increasing the transparency of healthcare pricing.
This is an area that will continue to be a focus heading into the 2020 election. Hospitals, providers, and their leadership cannot hope this issue will just disappear, as the pressure will only increase. Some ways your organization can prepare for interactions with patients include the following:
- Have “one-voice” in all of your messaging, online and in-person, regarding prices and out-of-pocket expenses
- Ensure you have scripting on your website coupled with financial assistance counselors to explain how a patient’s out-of-pocket cost is calculated and how hospital charges are not necessarily the negotiated rates with insurance plans
- Put prices in context with quality and safety information
- Establish clear pathways for directing patient questions
Finally, make sure you understand your organization’s pricing methodologies and how current prices are set. You may have thousands of procedure codes but understand the pricing and affordability of the top 50 to 100 procedure codes by volumes. These will be the areas that generate the most discussions with patients and media members alike. Work to understand how your prices may impact private insurance patients and Medicare beneficiaries, especially in the Critical Access Hospital and Rural Health Clinic settings.
If you have questions about how this order or other price transparency rules affect your organization, contact your local Blue & Co. advisor.