A pricing system should be simple to administer and communicate, should enhance the patient experience as patients take greater charge of healthcare purchasing decisions, and should gain the trust of consumers as they seek to make price comparisons. This important goal has been advocated by HFMA’s Patient Friendly Billing® project for years. Here, learn five strategies for traveling down the path to transparency.


Develop a well-defined, rational, and competitive pricing philosophy, strategy, and structure. Such a philosophy should guide policy decision-making, redesign, and updates. Examine approaches that mitigate the impact of pricing changes under Medicare and Medicaid payments and regulations, and adopt a pricing strategy or discount policy that makes discounts available to patients with limited financial means. Ensure that the pricing system is simple to administer and communicate to various stakeholders, including members of the general public, and that the framework for the pricing system is rational and defensible in relation to objective benchmarks, such as cost and market price. Additionally, work toward simplifying and standardizing the chargemaster throughout your organization, ensuring that charges make sense to the general public and have an understandable relation to the price being paid.

Develop formal, written policies and procedures for providing patients with written estimates of their expected financial obligations for both inpatient and outpatient care, and be clear about what the estimates do and do not cover. Gather financial information in advance about the patient and identify and assist patients who may qualify for charity care or government programs. When hospitals establish patients’ financial obligations for their hospital bills before treatment occurs, both the hospital and the patient benefit from the transparency.

Negotiate with insurers to remove contractual barriers to rational pricing methods. Posting a copy of the chargemaster does not provide a meaningful tool for patients (and others) to act on. Encourage payers to make available on a real-time, electronic basis information about coverage, benefits, noncovered services, copayments, and patients’ deductibles, coinsurance, and maximum out-of-pocket limitation status. This will help ensure that patients can be provided with more accurate estimates of their expected financial obligations in advance of or at the time of service.

Enhance awareness and understanding of the need for greater price transparency among employees. Ensure that staff know how to help patients learn the estimated cost of inpatient and outpatient care within the organization as well as their estimated financial obligations for care and services received. Use scripts and role playing tailored to the needs of patients in different settings, such as emergency and outpatient departments, to train employees about how to communicate financial information. Include success drivers such as patient satisfaction and estimation accuracy in employee incentive programs.

Continually improve your organization’s cost-accounting competencies. Invest in business intelligence and costing systems that enhance the organization’s ability to capture, track, and analyze costs for specific procedures or processes, such as costs related to labor, supplies, and other expenses. Then, use the data to support decision making related to establishing charges and improving value such that the relation to charge, cost, and price is meaningful and understandable to the patient and community.

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