Case Study | Financial Leadership

How a health system prepared to comply with CMS’s new price transparency rule

Case Study | Financial Leadership

How a health system prepared to comply with CMS’s new price transparency rule

  • The efforts of one health system to meet state and federal price transparency regulations show the benefit of integrating transparency efforts into a broader organizational strategy.
  • Best practices include implementing a formal governance structure to enable agile decision-making around the dissemination of pricing data.
  • Hiring a project manager can be helpful for providers with limited staff resources.

For hospitals and health systems, new price transparency regulations present opportunities in addition to compliance challenges.

Specifically, organizations have a chance to assess and adjust strategies pertaining to data management, said Christi Skalka, managing director in the Health Care Practice at Deloitte.

Hospitals should “put together a formal governance structure to facilitate fast, nimble, effective decision-making as it relates to the strategic opportunities and challenges of data being out there,” Skalka said.

The new regulations provide health systems with the opportunity to enhance communications to engage both team members and consumers. Improved data governance also builds a foundation for more strategic use of resources, including vendor partnerships, and for reexamining staffing structures to control costs and enhance the patient experience. 

Investment and integration of resources

Hospital preparations to meet the transparency requirements have involved cross-functional coordination and strategic communications. The level and type of investment depend on factors that include price transparency efforts already taking place, staff resources and budget.

For Kettering Health Network, which includes eight hospitals serving southwestern Ohio, previous efforts to comply with state price transparency legislation — enforcement of which has been suspended amid a legal challenge — helped the organization get ready to post the information needed to comply with the new federal requirements. In preparation for the latest rules, the health system leveraged its vendor relationships, invested staff hours and examined current software capabilities.

In addition to working with third-party vendors, “There was a lot of reconciliation, auditing and connecting that our team had to do to validate the accuracy of information,” said Brad Olson, vice president of managed care for revenue management with Kettering.

Brad Olson, Kettering Health Network

Kettering did not hire dedicated staff for compliance with the price transparency rule but has integrated transparency efforts into its broader organizational strategy. In 2018, Kettering formed a chargemaster transparency committee, which Olson helped lead, to meet state requirements to post charges by DRG in 2019.

To publish the information, this group drew on the expertise of team members representing:

  • PR
  • Communications
  • Finance
  • IT
  • Revenue cycle
  • Managed care

The health system reactivated this committee in 2020 to prepare for the federal price transparency rules, which demanded additional resources to launch the required list of shoppable services.

Kettering expanded functions of current staff, with committee members sharing duties that include evaluating requirements, managing the process of gathering and validating the price information, and publishing necessary details online. 

Reviewing processes to optimize human resources

In collaborating with a chargemaster vendor to post charges in 2019, Kettering had established an annual review process to ensure compliance and accuracy. With this relationship in place, the committee decided to continue working with the vendor to review standard charges each year and to post the required machine-readable file for all services in the chargemaster.

After examining ways to display the required list of at least 300 consumer-friendly shoppable services, the committee decided to bring the health system’s estimated-reimbursement function, including claims review and submission, in-house to facilitate expanded use of its EHR. That, in turn, allowed the organization to move forward with using a price-estimator tool to provide the required information for shoppable services.

Since 2018, review of price transparency state and federal rules, setup costs and collaboration with internal and external stakeholders have amounted to total estimated expenditures of between $400,000 and $500,000, with an estimated 50 staff members contributing approximately 4,650 hours.

Shelly Crunk, Kettering Health Network

“Pulling team members in different directions on top of other priorities, it takes a lot of time and attention,” said Shelly Crunk, vice president of revenue cycle with Kettering Health Network, who is leading the transparency committee along with Olson.

Challenges have included the unexpected departure of a key staff member and the task of gathering pricing details from health plans, which resulted in minor site-build delays. Hiring a project manager can be helpful for providers with limited staff resources, Crunk said, noting the process of securing pricing information involves reconciliation, auditing and ongoing communication wth payers to validate accuracy.

Moving beyond compliance efforts

With implementation of additional requirements such the ONC Cures Act Final Rule, which was drafted to give patients easy access to their medical information, investment in compliance will not be an isolated effort. “This rule is only the beginning,” Skalka says, “and rather than thinking about just direct costs, [hospitals] need to be strategic in investments and think about what, for instance, does 01-01-25 look like?”

With its up-to-date machine-readable file and more than 400 shoppable services in place, Kettering has built a customer-service team to support compliance by addressing questions and offering personalized cost estimates that build on the posted estimates. The health system has also repurposed its charge transparency committee to focus on maintenance of posted charges.

Operating with the same software and vendors that were incorporated in response to state transparency legislation and the new federal rule, Kettering anticipates dedicating approximately 500 staff hours and $300,000 each year to maintain price transparency resources. The investment reflects an aim to prepare for potential staff changes and troubleshooting, respond to additional rules and grow its data governance capabilities to bolster interoperability.

“Display and publishing of these items took many man hours, committees and leadership to evaluate the right partners and vendors,” Olson said. Several years into its transparency journey, Kettering continues to focus on integration and strengthening of resources to respond to evolving requirements.

About the Author

Elizabeth Barker

is an HFMA contributing writer. Send comments or questions about this article to Nick Hut, HFMA senior editor (nhut@hfma.org).

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