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Pricing Transparency – Posted Chargemaster, Now What?
Deloitte & Touche LLP
February 2019
Pricing TransparencyCopyright © 2019 Deloitte Development LLC. All rights reserved. 2
Introduction – Deloitte AdvisoryPresenter
Tammy Trovatten, CHFP
• Manager
• Deloitte & Touche LLP
• Sacramento
ttrovatten@deloitte.com
+ 1 916 330 0998
Pricing TransparencyCopyright © 2019 Deloitte Development LLC. All rights reserved. 3
Contents
Pricing Transparency 4
Provider and Patient Considerations 9
Provider Posting Examples 12
Future Considerations 16
Pricing TransparencyCopyright © 2019 Deloitte Development LLC. All rights reserved. 4
Pricing Transparency
Pricing TransparencyCopyright © 2019 Deloitte Development LLC. All rights reserved. 5
Pricing transparency is the availability of healthcare services information in terms of cost, quality, and outcomes.
Such information in conjunction with additional decision making toolsenable, empower, and provide guidance to health care seekers in identifying, comparing and determining a provider that addresses their circumstances.
Pricing TransparencyCopyright © 2019 Deloitte Development LLC. All rights reserved. 6
Consumerism and transparency mingle
Shifts in the industry environment are redefining the provider pricing landscape
Comparison Shopping Cumbersome
Information difficult to locate and interpret
Consumers Not Directly Impacted by Price
Traditional employer-sponsored health plans defrayed the impact of
provider pricing
Limited Alternatives
Consumers constrained to a traditional care delivery model
Historically, healthcare Providers were relatively immune to consumer price sensitivity
Increase in the volume of customers in the marketplace due to the Accountable Care Act
Higher deductibles driving increased consumer price sensitivity
Heightened awareness of provider prices due to several high profile publications
Increase in availability of alternative, reasonably priced care delivery models
Improved accessibility of provider pricing information with new regulations to post prices online
Increase in regulatory scrutiny of provider pricing
Pricing TransparencyCopyright © 2019 Deloitte Development LLC. All rights reserved. 7
Transparency helps mitigate the negative impact to consumers by:
Value focus begets transparency
Simultaneously
evaluate various
tradeoffs when
choosing a provider
Reducing Complexity
Generate greater ‘bang-for-the
buck’ for consumers’ health
care spend
Improve ability to plan financially and
monitor quality
Increasing Value
Providing Predictability
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A number of significant federal guidelines, as well as increased pressure from consumers, are driving an increased sense of urgency across healthcare providers who are working to improve their price transparency practices
Catalysts for Change
Patient Protection and Affordable Care ActThe Patient Protection and Affordable Care Act requires that each hospital operating within the United States, for each year,
establish, update, and make public a list of the hospital's standard charges for items and services provided by the hospital
Fiscal Year ’15 IPPS Final RuleThe FY2015 IPPS Final Rule provided implementation guidelines allowing hospitals to either publish their standard charges
online or publish the process to obtain their standard charges online
Fiscal Year ’19 IPPS Final RuleThe FY2019 IPPS Final Rule updated the 2015 guidelines to require that hospitals make available a list of their current standard
charges via the internet in a machine-readable format on January 1, 2019, and to update this information at least annually, or
more often as appropriate
NEW
Pricing TransparencyCopyright © 2019 Deloitte Development LLC. All rights reserved. 9
Provider and Patient Considerations
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2019 IPPS Final Rule – Key Considerations -PricingHospitals are asking themselves these questions:
• How will we publish our entire CDM? What additional information must we publish along side these charges to ensure public understanding?
• What information, in addition to charges, will help substantiate how pricing was developed (acuity data, cost data, pricing methodology, standard pricing vs discount/self-pay charging, etc)
• Who will be accessing this information? - Assess National/Regional/Local impact with publishing charges
• Will we discuss charges being posted with key department stakeholders prior to publication?
• Should we consider adjusting our prices now and defining our market defensible pricing strategy?
• How will we monitor, revise, and provide ongoing support regarding price transparency for our organization?
• Are there any implications with ACA - 501R regulations and will we clearly define what our charges represent (full charge amount or self-pay discount)?
• What is our organizational approach (top-down/bottom-up) with pricing transparency and how will we incorporate pricing transparency into our short-term/long-term strategies?
Pricing TransparencyCopyright © 2019 Deloitte Development LLC. All rights reserved. 11
What does this mean for Providers and Patients?
Embracing the transparency movement can allow for effective patient navigation with hospital pricing, while cultivating future financial strength with market defensible and rational pricing strategies
Patients are asking… Provider Opportunity
I want trusted and quality service without paying an arm and a leg
Providers with broad understandingand reliable quality information arebetter positioned to weather throughtoday and lead tomorrow
• Acuity metrics – Quality Data
• Access to local market charges
• Cost estimate data
• Providing patient insight tobilling
What do specific charges on my bill mean? Why am I receiving two bills?
What am I paying for exactly?
Where can I find reputable information?
Pricing TransparencyCopyright © 2019 Deloitte Development LLC. All rights reserved. 12
Provider Posting Examples
Pricing TransparencyCopyright © 2019 Deloitte Development LLC. All rights reserved. 13
Website contains a “Pricing Information” link under patient portion of website
Provider Website Posting – Hospital A
Chargemaster –10,000 lines
common charges
Top 60 DRG Gross
Charges
ER Visit Gross
Charges
In an effort to assist those individuals who may be seeking medical care services we t hink it is essential now
more than ever to provide pricing information so that people can make informed decisions about their
healthcare cost. This information allows consumers ….
What is Pricing Transparency?
“Pricing Transparency” is ….
Instructions
Below are links to listings of Inpatient DRGs and Procedures with hospital charges. This pricing is only a
reasonable estimate …:
• Length of Stay
• Conditions and Complications
• Medications and Treatments
• Diagnostic Testing
• Therapies
Due to the fact that the listing is organized by Inpatient DRGs and service descriptions, knowing the services
requested ….
For Your Information…
We are glad to extend our guidance through the financial part of your healthcare experience. This site will allow
you to:
• Obtain pricing estimates for healthcare services
• Obtain contact information to call us directly with questions about price estimates
• Better understand our billing process
• Obtain information regarding Frequently Asked Quest ions
To provide our patients ….
Pricing TransparencyCopyright © 2019 Deloitte Development LLC. All rights reserved. 14
Website contains a “Chargemaster and Cost Estimator” link under billing portion of website
Provider Website Posting – Hospital B
Chargemaster –100,000 lines of
charges
Physician and
Outpatient Services
Only
No specific ER charge information
This cost calculator was created as a resource to help inform you and your family about costs for frequently used health care services provided by physicians such as office visits, lab tests or X-rays. At this time, the Cost Estimator provides estimates for outpatient and physician services only, not hospital stays.
The estimated patient cost is just an estimate. The estimated cost is not a guarantee ….
The estimated cost is specific to the service you choose and may not include additional services …. Your final out-of-pocket cost may be influenced by many other factors ….
Chargemaster - Download the Medicare-mandated hospital chargemaster file. The chargemaster does not reflect the prices payors or patients pay.
Download the chargemaster file – Excel
Open Chargemaster link
Pricing TransparencyCopyright © 2019 Deloitte Development LLC. All rights reserved. 15
Website contains a “Price Transparency” page but under community portion of website
Provider Website Posting – Hospital C
Chargemaster –15,000 lines of
charges
Average Price for
200 DRG’s
No specific ER charge
information
Price Transparency: Charge Master Standard charges for our services are made available for your review. This listing of charges is called the “charge master.” Hospital pricing is complex, in part ….
For charge master disclosure purposes, the rates listed represent the highest amount charged for the service listed – most people, however, pay less than these listed amounts. Charges are …. In addition, we have provided a listing of services by DRG (Diagnosis-Related Group). A DRG is ….
• Charge Master (CSV) • Average Charges for Inpatient Cases (CSV)
Patients seeking an estimate of personal liability should contact Customer Service:
Hours: 8:30 a.m. to 4 p.m., Monday – Friday
Phone: ###-###-#### Toll-Free; TDD ###-###-####
Email: billing@wergr8.org
* In compliance with Chapter 2 of Division 2, commencing with Section 1339.50 of the California Health and Safety Code, and the Centers for Medicare and Medicaid, Fiscal Year 2019 Inpatient Prospective Payment System Final Rule, 83 Federal Reg. 41144.
Pricing TransparencyCopyright © 2019 Deloitte Development LLC. All rights reserved. 16
Future Considerations
Pricing TransparencyCopyright © 2019 Deloitte Development LLC. All rights reserved. 17
The requirements and recommendations below, provide a roadmap for meeting federally-mandated* price transparency requirements and improving the overall experience of healthcare customers
Preparing for the Future of Price Transparency
Price Transparency
Hospital service and item prices must be made public by
January 1, 2019
• Report all facility charges using patient-friendly terminology and industry standard
encounter-level codes – APC for outpatient and DRG for inpatient; alternatively, report
facility charges at the chargemaster level
• Accompany standard charge data with peer market data to illustrate price fairness
• Pair standard charge data with quality metrics that speak to facility ratings, highlight
patient experiences, and demonstrate the value of care
Customer Access
Charge / Pricing data must be available online, and in a
machine readable format (i.e., in a file format that can be
processed by a computer)
• Develop a standard webpage optimized for customer research; enabling search
functionality based on consumer-friendly terms
• Make educational material regarding healthcare pricing and your system pricing
philosophy (i.e., value equation) available alongside the charge data
• Prepare a media statement and share with PR/marketing /communications and with
patient-facing resources in the case of media and patient inquiries
Living Data
Charge / Pricing data must be updated at least annually,
and include a date on the file
• Initial implementation should occur by January 1 2019, and in future years should be
aligned to fiscal year updates
• Interim changes/updates should be made quarterly to ensure accuracy of data and
mitigate the potential for misalignment between posted standard charges and patient
EOB and billing information
• Collaborate with payors on the system’s value equation and involve them in
transparency efforts
Requirements Implementation Recommendations
*Meeting the federally-mandated requirements may not satisfy more stringent state-based transparency requirements
Pricing TransparencyCopyright © 2019 Deloitte Development LLC. All rights reserved. 18
Roadmap to Transparency ImprovementSet the Stage
0-3 Months
Evolve and Enhance
12-24 Months
Standardize for Scalability
3-12 Months
FY ’19 IPPS Final Rule
Deadline
Key
Updated CDM
Live
Quarterly Updates to Online Standard Charge Data
Align to Industry StandardsReport all facility charges using patient-
friendly terminology and industry
standard codes
Capture Comparator DataAccompany standard charge data with
peer market data to illustrate price
fairness
Tell a ‘Quality’ NarrativeFurther enhance your customer-facing
charge data by including quality metrics
that demonstrate the quality of care in
conjunction with the cost of care
Sort by Customer InterestPost charges in order of services most
often researched by customers
(shoppability) as opposed to those most
often performed (service volume)
Invest in EducationThrough your pricing webpage, make
resources available that educate
customers on healthcare pricing broadly,
and your pricing philosophy specifically
Price Transparency Initiative
Customer Access Initiative
Living Data Initiative
Ongoing Initiative
Planning Milestone
Enhance Ease of AccessProvide search functionality that simplifies the
process of finding online pricing data for specific
services; linking search results to your
appointment scheduling system can further
improve the customer experience
Understand the Competitive
LandscapeConduct benchmarking research into the
pricing data of local comparator
shoppable and price sensitive services
Help Staff Share the
Value PropositionProvide patient-facing staff
with updated talking points
that highlight the ease with
which patients can access and
understand pricing
information
Develop/Update
Pricing StrategyRefresh or begin
development of the health
system’s pricing strategy to
include the customer’s
pricing experience
This presentation contains general information only and Deloitte is not, by means of this presentation, rendering accounting, business, financial, investment,
legal, tax, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a
basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should
consult a qualified professional advisor.
Deloitte shall not be responsible for any loss sustained by any person who relies on this presentation.
About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and
their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not
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Copyright © 2019 Deloitte Development LLC. All rights reserved.
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