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Top Ten 2021: Price Transparency—The Transformation Saga Continues

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Based on AHLA’s annual Health Law Connections article, this special series brings together thought leaders from across the health law field to discuss the top ten issues of 2021. In the ninth episode, Kathy Reep, PYA, speaks to Connie Akridge, Holland & Hart, about the requirements related to provider and payer price transparency in 2021. They discuss the Hospital Price Transparency Rule and reasons for hospital non-compliance, the Transparency in Coverage Rule and payers’ response, and the transparency requirements for both providers and payers under the No Surprises Act. Sponsored by PYA.

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Speaker 1:

The American health association is pleased to present this special series, highlighting the top 10 issues of 2021, where we bring together thought leaders from across the health field to discuss the major trends and developments of the air support for AHLA in this series is provided by pya, which helps clients find value in the complex challenges related to mergers and acquisitions, clinical integrations, regulatory compliance, business, valuations, and fair market value assessments and tax and assurance for more information, visit pya pc.com.

Speaker 2:

Hi, I'm Kathy reap representing pya, uh, and I'm glad to welcome you to HLAs inaugural top 10 series session number nine, the price transparency, the transformation saga continues. And as my guest today, I want to introduce Coniac Ridge with Holland and Hart. Who's going to discuss some of the issues pertaining to price transparency, Connie, glad to meet you. And I would like to just start to level the playing field for those who are participating in today's program. Can you give me a brief overview of the transparency requirements impacting hospitals in 2021?

Speaker 3:

Thank you so much, Kathy. It's nice to be with you today by way of background, the affordable care act really only required hospitals to provide their charge masters to, to, uh, patients which really are non-discounted fee for service prices that are usually highly inflated and bear little relationship to market rates. CMS didn't think those were helpful to patients. So they decided to Institute or issue the privacy, the price transparency requirements for hospitals to make standard charges, public rule, which was issued on November 27, 2019 and became effective on January. First of this year here requires hospitals to disclose to the public five types of charges, gross charges, which are really the that's the hospital charge master non-discounted rates, discounted cash prices, which is the rate. The hospital would charge individuals who pay cash or cash equivalent payer specific negotiated charges. Um, that's the rate that the hospital has negotiated with third party payers, for example, insurer for an item or service provided in the hospital. De-identified minimum negotiated rates, which is the lowest rate that hospitals negotiated with all third party payers without identifying the payer. And de-identified maximum negotiated rates, which is the highest rates that a hospital has negotiated with third party payers without identifying the payer. So under the final rule, hospitals must publish a machine readable digital file containing these types of charges for all items and services provided by the hospital to patients for which the hospital has established a standard charge. They also must publish a more consumer friendly list. These five types of charges for the hospitals, 300 most shoppable services, which is defined as a service that can be scheduled by a healthcare consumer and advance. CMS has specified 70 shoppable services that must be included in the hospital is left to select the remaining 230. The hope of this role is that all consumers will become better health shoppers and that providers will become incentivized to lower prices.

Speaker 2:

Thanks for that overview Connie. I think it's very important that we, we share that with everyone so that we all know what the requirements are on the hospitals, but I've seen a lot of coverage in the press lately since January. And the compliance date about the lack of compliance with these requirements. What are your thoughts as to why so many hospitals are non-compliance? Is it the cost? Is it not wanting to share proprietary information, other areas and along those same lines, where do you see the Biden administration taking the compliance requirements?

Speaker 3:

Well, the, the records of noncompliance in the press are quite stunning. Um, there's a about the one that held affairs blog did in March 16th, 2021 with a couple of folks from the hillside Institute, they did a study to see how many hospitals. I think they looked at top a hundred largest hospitals in the U S by bed count, uh, from late January, 2021 to early February and sought to determine the extent hospitals were complying. That looks like they used a fairly, um, conservative measures for looking at this. They use simple search strategies and looked at whether or not the data contained all the variables necessary to be compliant and whether the variables complied with the requirements and what they found was of the hundred hospitals in the sample, 65 were unambiguously noncompliant. I think that's a 22, um, of the hospitals appeared to be compliant. So that's, that's a pretty large con compliant number. Absolutely. And Milliman didn't study as well. Yeah. Uh, 55 health systems representing 600 hospitals from January 1st to March 3rd, it found 68% of the systems, um, posted a file containing at least one of the three categories, standard charges, payer specific negotiated rates or gross charges, but it found a high degree of diversity in how hospitals posted their charges. So, you know, the hospitals are saying that with everything they have to do to comply with COVID and how hard, what a big impact the challenges they've had with COVID, it's been hard for them to comply. I'm sure. Part of it is they've always said was that instead of increasing competition, it's going to have the opposite effect. Some of them may not want to share proprietary information. I think people are taking a wait and see approach about whether, what the Biden administration will ultimately do in terms of making hospitals comply. There's a$300 per day, civil monetary penalty, which is the maximum that can be assessed, which means, you know, maybe hospitals are making a economic decision that 109,500 a year. Isn't really much of a price to pay for keeping their information confidential.

Speaker 2:

That's a great point. Thanks for raising that. Um, I believe that there's also another, um, transparency rule that really is more, um, on the payer side, transparency and coverage. Um, can you give us a little bit of information about that rule and um, how do you, how do you think the payers will respond in terms of compliance?

Speaker 3:

Well, I will say, let me take the, how payers will respond. I think because the compliance dates are rather far out, uh, 20, 23, 20, 24, maybe a, there hasn't been as much thought given or reaction to this rule yet. Um, because it's not, you know, it's not immediately, uh, they don't have to immediately comply, but, um, this rule was released on October 29, 2020 by the department of health and human services department of labor and the department of the treasury. And essentially what it does is requires disclosure of negotiated rates to provide personalized estimates, a patient out of pocket costs for 500 services and items, including drugs and medical equipment. Beginning January 1st, 2023. And insurers must make the information publicly available for all items and services starting January 1st, 2024. The rule also asks for insurers to make their data files on healthcare costs available for research purposes so that researchers and technology developers can use the data to create solutions that will help people make healthcare decisions, including tools to compare prices between health plans and insurers must make the data files public starting January 1st, 2022. So the goal of this rule is again to empower incentivize consumers through the plans that include provisions, um, encouraging consumers shop for services from lower cost, higher value providers. Again, it's a consumer choice. Information is transparent to consumers. So consumers can actually shop for the highest value, lowest price plans.

Speaker 2:

It will be interesting to see if that is further delayed or how compliance will be is that we, as we move forward with that. But one more question for you. I think that in the no surprises act, uh, that was part of the consolidated appropriations act of 2021 that was actually signed in 2020. Um, there are some transparency requirements on the part of both payers and providers. Can you give us some information on that?

Speaker 3:

Sure. So the no surprises act is really the federal version of surprise billing legislation. And, um, I know most people are familiar, many states have passed their own, um, surprise billing laws. What the, uh, no surprises of that generally does is protects patients from receiving surprise medical bills and coverage for emergency services. And certain services provided by out of network clinicians that in network facilities and it holds patients liable for their in-network cost sharing amount or giving providers and insurers the opportunity to negotiate reimbursement. It allows providers and insurers access to independent dispute resolution processes in the event disputes arise around reimbursement, but it doesn't set a benchmark reimbursement amount like Medicare or Medicaid, for example. Um, and it requires providers and health plans to assist patients in accessing healthcare costs information. Now, the transparency pieces of this law on section one oh seven requires health plans offer in group and individual health insurance coverage to include new information on insurance ID cards for plan years, beginning January 1st, 2022, including all plan deductibles, including in-network and out-of-network deductible amounts as applicable, maximum limits on out-of-pocket costs and a telephone number or a web address for consumer assistance. Um, the other transparency provisions, um, section one 12, establishes a new requirement for healthcare providers, both individual practitioners and facilities to share good faith estimates, the total expected charges for scheduled items or services, including any expected ancillary services with the health plan. And the notice must include the expected billing and diagnosed a diagnostic codes were all items and services to be provided. Requirement applies whenever items or services are scheduled at least three days in advance, or when requested by a patient. And the provider must determine the patient's health coverage status and develop the good faith estimate at least three business days before the services furnished and no later than one business take after scheduling, unless the service is scheduled for more than 10 business days later, that requirement doesn't affect January 1st, 2022, section one 11 establishes new requirements for health plans offering group and individual health coverage to send patients advanced explanations of benefits prior to scheduled care or upon request by patients seeking more information prior to scheduling. So the advanced EOB requirement is triggered by the providers sending the good faith estimate. Patient may also request advance TOB from their health plan. And there are eight components of an advanced EOB that are set forth in section one 11. So those are the transparency requirements under the no surprises act.

Speaker 4:

Thanks, Connie, you've made it clear that between the pricing transparency role for hospitals, the transparency

Speaker 2:

And coverage rule and those provisions within the consolidated appropriations act, the idea of transparency, isn't going to go away. It's going to be continued to be out there for both providers, payers and for patients. And hopefully we'll get to a situation where it is truly, um, useful for the patients, um, and the consumers as they're looking for, um, information on their healthcare. I want to thank you. And I appreciate this opportunity to talk with you this afternoon.

Speaker 1:

Thank you.