Impacts Expected from 2019 Transparency Requirements

November 19, 2018 8:23 am

One hospital executive wondered how much the federal price transparency push would benefit the underinsured, including many ACA enrollees.

Nov. 16—Healthcare executives expect widely divergent impacts from the unprecedented transparency on charges that hospitals are required to implement within six weeks.

In the FY19 Hospital Inpatient Prospective Payment System (IPPS) final rule, CMS required hospitals to make public by Jan. 1 a list of their standard charges via the Internet, in a machine-readable format, and to update this information at least annually.

Ninety-two percent of hospital executives are “very” or “somewhat” confident their organization will meet the Jan. 1 deadline, according to a surveyof 150 healthcare participants on a recent webinar by PMMC and Healthcare Business Insights. However, 43 percent said they did not yet know how they will meet the transparency mandate. (Another 22 percent said they plan to post standard charges only, and 29 percent plan to post standard charges and “additional pricing information beyond the chargemaster.”)

Expected Impacts

Additionally, 92 percent of surveyed executives were concerned to some degree about how their charges will be perceived by the public in response to the new transparency requirement.

The postings will reveal a “wide variation” in charges between hospitals, said Thomas Miller, MD, the CMO of University of Utah Health.

“It pushes a larger conversation that we have I would say the best health care in the world, but if we can’t access it, what’s the value of it?” Miller said at a Washington, D.C., hospital business conference.

Miller expects the posting of charges to create pressure on providers “to find a better way to price their product.”

Insurers also will be pressured, said Margaret McKenzie, MD, president of Cleveland Clinic South Pointe Hospital.

“We would like to work with payers so that we can publish what the patient’s out-of-pocket [cost] is going to be,” McKenzie said. “That’s the bottom line of what they want to know.”

Underinsured patients will respond by asking why they need to pay more than Medicare or another insurer pays for procedures, said Miller.

“Why am I as an individual picked on when I am seeking access to the health care that I need?” Miller said of the expected response of such patients.

In contrast, Thomas Lee, MD, the CMO of Press Ganey and a member of the board of directors of Geisinger Health System, does not anticipate a significant effect because most patients are insured and don’t see a direct impact from chargemaster prices.

Lee, an internist and cardiologist at Brigham and Women’s Hospital in Boston, cited the lack of impact from a Massachusetts law that required insurers to develop online cost estimator tools by October 2014.

After anxious anticipation and preparation by hospitals in the state, “hardly anyone looked at it; the number of people looking at it per day was, like, six,” Lee said.

An April 2018 study of the price transparency websites operated by insurers in the state found improvements since their launch but that “important deficiencies remain.”

However, the reaction to price transparency nationally could be different because in Massachusetts the unusually low uninsured rate leaves few paying for care out of pocket, Lee said.

The patient impact of the chargemaster prices also may be mitigated by existing transparency requirements related to quality, such as Medicare data on hospital-acquired conditions, McKenzie said. For instance, public perceptions of her hospital improved after the release of quality data demonstrated its good safety record.

“People will choose quality every time over price,” McKenzie said.

Miller questioned the usefulness of the coming chargemaster transparency for the growing number of patients with high-deductible health plans (HDHPs). The various procedures listed on chargemasters are uniformly so costly that little benefit comes from being able to compare prices, he said.

 “People would understand cost if it is presented to them in a way they can understand and is affordable,” Miller said. “Now, many insurance plans on the [Affordable Care Act (ACA)] exchange are not so affordable.”

An Avalere study found that the average deductible for the most-popular silver plans in the 2018 ACA marketplaces was almost $4,000.

The individual-market movement toward higher deductibles has led a broader movement in the same direction by employer-sponsored plans. Data released in November by the Centers for Disease Control and Prevention (CDC) found that among the pre-Medicare population with private insurance, the share who are enrolled in HDHPs increased from 43.7 percent in 2017 to 46 percent during the first six months of 2018. CDC defined HDHPs as plans with an annual deductible of at least $1,350 for self-only coverage or $2,700 for family coverage.

Physician Ratings

One area in which the hospitals urged increased transparency by the industry was in providing public ratings for physicians. Cleveland Clinic and University of Utah Health are among the vanguard of hospital systems providing their own platform for patients to grade and comment on physicians.

They are among the 10 to 15 percent of health systems that host online physician star-rating and review websites, Lee said.

Despite initial concerns and some opposition from physicians, both health systems report positive results from their physician rating systems. For instance, University of Utah Health found that its system of surveying all patients and uploading their comments to its rating site made search engines prioritize the provider’s rating site over private options, said Miller. And even though its rating site allows for negative reviews of physicians, the health system at least knows the commenters are actual patients (or their families) and not physician competitors or others with ulterior motives. 

“Our data were stronger, so we knew people would seek it out,” Miller said.

The health systems have found that their physician rating sites serve both as learning tools to help physicians improve their patient interactions (when negative) and as a means to bolster physician morale (when positive).

Additionally, the health systems see the rating sites as a source of free marketing and as a way to maintain relationships with patients, who use them on an ongoing basis—long after selecting a clinician.

However, to become a powerful patient influencer, such sites need to include features that often draw resistance from hospital physicians, Lee said. Key components include sharing the information externally, moving beyond numeric measurement to include patients’ comments, and including negative comments.

“The problems that critics anticipate always turn out to be nonissues,” Lee said.

Miller’s advice for health systems implementing a rating website is to stress its positive potential to their clinicians and to make a point of listening to the concerns of physicians who are most worried about the project.

Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare


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