The concept of healthcare price transparency involves making prices for goods and services readily available to patient consumers. In other words, letting people know how much products or services will cost before they commit to the purchase. It can be as simple as providing an online list of prices. The concept of price transparency has gained significant traction in other industries like travel and retail, and now it's coming to the healthcare industry.
How will this impact the healthcare industry as we know it?
We’ll break down the components of healthcare price transparency and what healthcare systems need to know to compete in this rapidly changing marketplace.
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What Does Healthcare Price Transparency Mean?
Healthcare price transparency is intended to help patients know the cost of a hospital service or item before receiving it.
It focuses on two key areas: hospital price transparency and health plan price transparency.
Hospital Price Transparency
Every hospital in the United States must meet the price transparency laws that began on January 1, 2021, to provide online pricing.
This online pricing must be clear and accessible regarding their items and services in two ways: a machine-readable file and a consumer-friendly display of shoppable services.
Machine Readable File
Hospitals must provide a machine-readable file that contains standard charges for all products and services, including:
- Discounted Cash Prices
- Gross Charges
- Minimum and Maximum Negotiated Charges
- Payer Negotiated Charges
Consumer-Friendly Display of Shoppable Services
Hospitals must have a list of 300 shoppable services or more. If they have less than 300, then they will have to schedule a review of their machine-readable file in advance for review.
The descriptions must be in plain language and grouped with ancillary services that offer:
- Discounted Cash Prices
- Payer Negotiated Charges
- Minimum and Maximum Negotiated Charges
Health Plan Price Transparency
This is also known as transparency in coverage, which is intended to help consumers understand the costs of covered items or services before they receive care. Most group health plans and individual or group health insurance issuers will post pricing information for covered items and services.
This rollout is broken down into three phases:
- They must provide a machine-readable file that contains the in-network rates for all covered items and services between the plan or issuer and all in-network providers. There must also be an allowed amount file that lists the amounts that are covered and charges that will be billed when using out-of-network providers. Phase one went into effect on July 1, 2022.
- An internet-based priced comparison tool (or on paper if requested) allows an individual to receive an approximation of their cost-sharing responsibility for specific products or services they request from a particular provider. This price comparison tool can go up to 500 items and services. Phase two is scheduled to go into effect on January 1, 2023.
- An internet-based priced comparison tool (or on paper if requested) allows an individual to receive an approximate amount of their cost-sharing responsibility for specific products or services they request from a particular provider.. This price comparison tool is for all items and services. Phase three is scheduled to go into effect on January 1, 2024.
Cost estimates must be provided in real-time, based on accurate cost-sharing information available when the request is made.
Want to know how Clearstep’s Smart Care Routing™ helps increase patient satisfaction and retention? Click here to learn more about our patient-centric approach!
The Impact of New Healthcare Transparency Regulations on Healthcare Systems
Price transparency directly impacts health systems & hospitals as they are required to provide pricing information on their services. However, health plan price transparency rules are also going to affect them as well.
Health System Non-Compliance With Hospital Price Transparency
An article in Healthcare Dive indicated that only 16% of hospitals were fully compliant with the new law over a year after the rules went into effect.
The CMS has established fines for non-compliance. For hospitals with less than 30 beds, the minimum failure to comply penalty is $300 per day. In hospitals with over 30 beds, failure to comply can result in fines of $10 per bed, per day, capped at $5,500 per day.
Under these guidelines, the minimum penalty for a year of non-compliance would be $109,500 per hospital, and the maximum penalty would be $2,007,500 per hospital.
The CMS had shown some patience by sending out warning letters, but started issuing fines in July 2022, a full year after the rules went into effect.
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A Paradigm Shift In Behavior From Patient to Consumer
Acritical shift that hase occurred as healthcare price transparency regulations have come into effect is that patients now have access to the costs of healthcare services before they purchase them.
This change empower patients to act more like informed consumers, who can now shop around to find the best prices and services available. As consumers, not just patients, they will expect that their healthcare is not only cost-efficient, but more personalized, consumer-centric and high-quality.
Using AI Technology to Deliver a Patient-Centric Experience
AI Smart Care Routing™ by Clearstep is a virtual healthcare assistant that can provide patients with personalized guidance to help them meet their needs.
Virtual Triage enables healthcare systems quickly, accurately and remotely diagnose potential patients and route their care within the system appropriately. In addition, this AI chat capability can help augment call-center capabilities and save precious resources.
Patient Services connects potential patients with the critical information they need. Information like costs and insurance eligibility can automatically reduce the administrative burdens on a health system’s care teams.
Clinical Journeys reduces readmissions and streamlines remote monitoring and patient follow-ups.
Healthcare systems can utilize Smart Care Routing™ to increase access to care, book more appointments, reduce the strain on staff, and enhance patient outcomes and experiences.
Are you ready to learn more about Clearstep's Virtual Triage Platform? Click here to schedule a demo!
Healthcare Price Transparency Is a Tremendous Opportunity For Healthcare Systems
Many health systems are falling behind when it comes to producing comprehensive pricing lists online and in machine-readable formats. However, transparent pricing allows them to compete for new patients that are browsing for care options online.
Healthcare can now be more cost-effective and efficient than before. Adopting price transparency provides a competitive advantage over those that are slow or reticent to change.
The use of AI chat technology platforms help healthcare systems expand access to care. It also provide a more flexible, personalized patient experience, resulting in better outcomes. At the same time, it reduces the costs and strains that were imposed on health systems’ resources from outdated, manual processes.
As patients’ behavior shifts towards a more consumer decision making style, healthcare systems that cater to this trend will be better suited to thrive.
Related: How AI Chat Increases Health Systems’ Clinical Capacity and Builds Brand Loyalty
