Strategic Positioning

PK: CMS has put out there the regulation around price transparency and wanting organizations – healthcare organizations – to start to list the rates that they have with insurance companies, as well as,  they want patients to have visibility into what they’re charging and then what the reimbursement is and have an opportunity to do some comparisons.

And I think that’s the letter of the law and regulation. You have to have some level of viewing your shoppable services, but I think organizations that look at the regulation as just the only thing they need to do to be compliant are missing a key opportunity to use this regulation as a catalyst for change.

Which is aligning more to a more enhanced and better patient experience across the enterprise. And by that we mean starting to look at this to bring patients in. So if patients are coming to your website, looking at your rates, looking at your service offerings, you should be hooking them into a better workflow to continue them through that entire process.

Meaning, once they look at that information, they should then have an opportunity to identify what’s their actual estimate going to be for those services, start to think through, ‘How do I schedule for those services?’ And then if they can make payment or cannot make payments, start to engage in a conversation with the organization as to how they can address some of that.

So, yeah,there’s more you can do. And the more you can do with it is a different strategy. And it’s where folks should be spending that time right now – on that strategy – as well as complying with the letter of the law. So it’s a combination of both.

JC: So once you’ve created the program and you created your workflows and you operationalize that program, the next step is really to then communicate and share those tools and information with your patients and your community. So, how are you guiding patients to the front door of your health system or your hospital?

How are you directing them to the cost assessment or price estimator tool that you have? How are you reminding them of any financial or personal assistance programs that you have? Reminding them that if you’re providing estimates to procedures or surgeries, where to go for that information. So this is really in many ways a great time to remind patients and those that are seeking care at your organization of all the tools and information that they’ll have access to as they make their financial decisions about receiving care.

PK: I think there’s some key tangible benefits. So patient acquisition and patient retention, you’re going to instill trust within your patient population by providing this information out there and also continue having them coming back because you’ve created a whole new experience and level of transparency that they’re not used to today.

So it’s more than just listing pricing online, which is, I think, why we want to view it as a broader strategy. It’s really getting them into that better enabled and self-service workflow, which is how you want to be engaged with your patients and with all kinds of technology out there that you have, different things you can do to build that ecosystem. But I think that’s a key thing from an acquisition and retention perspective.

I think additionally, it helps from a patient financial experience for both not only the patient, but also for the organization. You can start to have more upfront conversations, easily, around expected out of pocket costs, how they might be able to pay for it, providing the mechanisms in which they can pay with all different types of technology, whether it be credit card or Google Pay, Apple Pay, the various things that are out there. That’s a key opportunity as well.

And then I think there’s a handful of patients out there – and it’s continuing to increase – where we’re seeing larger deductibles and out of pocket costs be placed on patients. So, we call under-insured and even the uninsured where you want to have a more upfront financial assistance conversation and creating that tightly knit workflow to help identify that through the price transparency and estimation will enable patients to better know, ‘can we afford it? Can we not? If we can’t afford it, what are my options?’ So they don’t feel reluctant to get care, but they feel like the provider organizations are really working with them to be helpful. And helping them find a solution so they can get care, but they also don’t create an extra financial burden on themselves.

JC: As providers share this information and communicate with patients. I think it’s really important to make it very clear and in a concise way using language that patients understand. So we’re talking a lot about price transparency. That doesn’t necessarily mean that price transparency needs to be the way that you refer to this program.

It’s really making sure that patients… it’s communicating very clearly all the tools and information and resources that they have access to. And for most patients that might just mean connecting them with your financial services team or your personal assistance program and having that really be a dialogue.

I think it’s important to make sure that the information is clear. It’s concise. You’re not using language that is a legal term that patients wouldn’t understand. So sort of putting it at their level and making sure that it’s just very clear and easy to access if they’re going through a website or if they’re calling the phone number to talk with someone.

PK: So I think there’s some key considerations you’re looking for. And some fall in the realm of the operations side of the house and some fall in the realm of technology and digitally enabling patients to have this experience. So first, I think it’s creating a strategy around the patient financial experience or the patient experience overall and using the price transparency component as a large initiative underneath it.

And then once you do that, you start to identify creating a much more refined and streamlined workflow for patients to enter into. So really it’s on an operational side, you’re mapping it out. And these are the functions that are going to hit scheduling departments, departments that do key revenue cycle functions around patient access.

So, pre-registration registration, insurance verification, et cetera, financial counseling, like we talked about. And then you have your component on the back end, which is the actual collections, which might happen at times. So you’re really looking at a more holistic view in terms of how you need to operationalize this.

And it’s more than just within the revenue cycle. If you’re a large provider organization, you need to get your clinics involved, your key departments involved, providers have to be integrally involved in these conversations. And then I think technically you need to evaluate your ecosystem and say, ‘within our core systems that we have today, can I do these things like provide an estimate? Can I do these things like collect payments ahead of time or pre-service  based off of the estimate? And can I do it in such a way that’s engaging with the patient to enable a level of self-service and customization so it’s not a generic experience? And I think those are the key things. So, defining the strategy, working with those departments to create that operational workflow, but making sure that workflow is supplemented with the right technology, both within your organization – and that might be infrastructure-related – as well as more patient-facing to get them in there. But really, when you think about it, that means it’s more than just a revenue cycle issue or a clinic issue. We’re talking about several different departments working in an integrated fashion to create that seamless experience.

Steven Schnelle: When thinking about the hospital price transparency rule, it’s helpful to remember that this requirement was actually first created in the Affordable Care Act in 2010. So this is a long standing requirement for hospitals to publish their standard charges. But we didn’t see the hospital price transparency rule come about until November of 2019, which seemed to have expanded in many hospitals eyes what the actual requirements are that were imposed by the statute.

When thinking about the legal implications and how we can focus on the legal analysis related to the rule, we want to think about how are we interpreting the rule. And ultimately, because the rule was promulgated by a federal agency, we’re going to be applying administrative law principles when thinking about the interpretation.

Another important point to think about from a legal perspective is that the rule doesn’t actually prohibit hospitals from challenging government enforcement actions in federal court. And as a result, if you do have hospitals who are challenging what exactly the interpretation of the rule is, then the ultimate interpretation will be a judicial or legal interpretation coming from a federal court. So for that reason, it’s pretty important to work with a hospital’s in-house legal team and work with outside counsel, as maybe helpful to think about what does the rule actually mean when looking at the language that’s created by CMS in the preamble, and how might a hospital make informed decisions regarding what charges they’re going to publish and how they’re going to publish those charges.

Emily Cook: An important factor in evaluating implementation of the rule, as well as the risk, is the enforcement landscape. CMS has developed an escalating enforcement framework based on the regulations. They have established three separate ways in which they will engage in enforcement.

The first is a warning letter followed by an opportunity for corrective action . And then failing implementation of that corrective action by the hospital, administrative penalties. The administrative penalties are $300 per day per hospital. There will be an opportunity to appeal any penalties that are implemented and those enforcement actions are expected to be made public.

It’s also important to consider the risks outside of those imposed penalties within the regulation, including what compliance may mean in terms of other contractual obligations for compliance with laws.

James Cervantes: In addition to the legal risks, there are very real reputational risks. Particularly if a hospital is the only provider in that market who chooses not to comply. Remember, the penalties will be made public. We anticipate local and national media outlets will be digging into the data to highlight any variations in pricing information, both regionally and even nationally.

Consider how your pricing relative to competitors will sit with patients and consumers. On the flip side, we believe this is an opportunity to connect with patients and consumers in a way that hospitals aren’t doing today. It’s an opportunity to educate your consumers and patients about the difference between price charge and the cost of care that they ultimately pay.

It’s an opportunity to articulate the unique value of services that you’re providing and why it’s worth receiving care at your facility versus someone down the road. Done right, you can set yourself apart from others and create a better understanding of not only costs, but overall healthcare value.

Steven Schnelle: If we were to think about three important notes for executives who are tasked with implementing changes for the hospital price transparency rule, our first would be to have a really clear sense of where the rule is clear and areas where the rule is unclear.

Many parts of the rule are unclear or give hospitals a fair amount of interpretive flexibility. And at the same time, the rule can present certain principles for application to particular facts. So while the rule may not be particularly clear, certain principles can flow through and have a…present a certain rationale .While at the same time, it can be challenging because this rationale may not align clearly with the actual intent of the rule that is to make hospital costs more transparent to users – in other words, to patients who are coming to the hospital or considering coming to the hospital. In areas where the rule is unclear, or it gives hospitals interpreted flexibility, we recommend establishing your hospital’s interpretation in a written document.

This could be a policy and procedure document, and we would suggest that you include in this document any rationale that you’re using in interpreting the statute regulation and CMS’ sub-regulatory guidance. We would also recommend that these particular policies and procedures are applied consistently. This document can be utilized in various circumstances to support your hospital’s position.

James Cervantes: We couldn’t agree more that having policies and procedures in place is important.

We would also recommend having very clear language around what pricing information includes and, more importantly, what it doesn’t include, so patients have a very clear understanding of their insurance coverage, copay, deductibles, et cetera, influence their out-of-pocket costs. And that the price they see online is just one part of that.

Having clear disclaimer language should also be visible on your website and your price estimator tool, or any application that you use today to communicate with patients around the price information they see.

Steven Schnelle: And then we’d also recommend that you pay attention to legal developments as time goes on surrounding the rule.

CMS has continued to release guidance regarding interpreting the rule, and its regional offices are continuing to hold webinars for providers who are trying to wrap their heads around what the rule means. There’s also ongoing litigation related to the rule that will be important to follow. And we expect the contours of the rule are going to develop as CMS sees how different hospitals are interpreting the rules, requirements and response to those interpretations.

James Cervantes: While the legalities are sorted, we know that based on a recent consumer survey, we feel that patients are more likely to source price information by calling their doctor than searching on a hospital website or even calling their insurance company. This tells us that regardless of any outcome of the rule or litigation related to the rule, hospitals still need to be prepared to communicate price information to patients and consumers who are shopping for this information today.

Hospitals and providers who go further than just publishing the required data, those who simplify the complex and foster patient understanding and interaction and build connectivity, we believe will reap an advantage. Because even though a medical professional’s advice is the best influencer on consumer choice, we know that cost increasingly matters.