Pricing Transparency requirements will for the first time expose a hospital’s negotiated rates for services allowing patients, competitors, and payers to compare pricing and shop for services. CMS now requires all hospitals to provide an electronic version of their chargemaster (CMD) as well as a list of 300 shoppable services to be posted on its website. This requirement will include a list of gross charges, negotiated charges, a self-pay “walk-in rate” and a minimum and maximum negotiated charge for all services in the hospital CDM. It also defines a list of 300 shoppable services that must be made publicly available in a searchable, consumer-friendly format. The rule is designed to enhance the ability of patients to shop for healthcare and make fully informed decisions using price of a good or service in advance.
Are you prepared for the new requirements?
Our Four-Part Model
Stroudwater has identified a four-part process to optimize rural hospitals’ strategy to prepare for the Pricing Transparency requirements.
Part 1: Revenue Cycle CDM Assessment
The objective of the assessment is to conduct rapid and focused analyses of targeted areas within the hospital chargemaster, reflecting the updated Medicare rates, to identify concrete opportunities for operational and financial performance gains. In addition to identification of improvement areas, Stroudwater will facilitate the implementation of improvements to the chargemaster process within each department to increase gross and net reimbursement while ensuring regulatory compliance. We will provide specific direction, training, and follow-up to guarantee that findings are implemented successfully. Our goal is to provide actionable improvements that can be incorporated into operations and create ongoing value for the hospital.
Part 2: Payer Contracting & Reimbursement Impact
Adopting a pricing transparency strategy that alters CDM pricing may trigger clauses in payer contracts that negatively impact the hospital. Stroudwater will develop a model to project the impact of CDM price changes by payer. Additionally, Stroudwater can help the hospital evaluate commercial contracts and work with the hospital to address these issues in preparation for and compliance with the Pricing Transparency regulations.
Part 3: Cost Report Modeling
For critical access hospitals (CAHs), changes in CDM prices will impact departmental RCCs and may negatively impact short-term cash, longer term reimbursement, and accuracy of decision making and chargemaster price setting. Without a financial model to understand the impact of CDM price changes on cost-based rates, CAHs are at risk of deferring necessary cost-based cash and losing revenue from Medicare Advantage plans that only pay a prospective cost-based rate without settlement.
Part 4: Pricing Transparency Implementation Oversight
The pricing strategy implementation will consist of a review of information currently available and a comparison to the CMS requirements. As a result of the conversations and data review, Stroudwater will develop an action plan to address issues and provide additional resources, training, and education where necessary.
- Part 1: Revenue Cycle Charge Description Master (CDM) Assessment
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Part 1: Revenue Cycle CDM Assessment
The objective of the assessment is to conduct rapid and focused analyses of targeted areas within the hospital chargemaster, reflecting the updated Medicare rates, to identify concrete opportunities for operational and financial performance gains. In addition to identification of improvement areas, Stroudwater will facilitate the implementation of improvements to the chargemaster process within each department to increase gross and net reimbursement while ensuring regulatory compliance. We will provide specific direction, training, and follow-up to guarantee that findings are implemented successfully. Our goal is to provide actionable improvements that can be incorporated into operations and create ongoing value for the hospital. - Part 2: Payer Contracting Review
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Part 2: Payer Contracting & Reimbursement Impact
Adopting a pricing transparency strategy that alters CDM pricing may trigger clauses in payer contracts that negatively impact the hospital. Stroudwater will develop a model to project the impact of CDM price changes by payer. Additionally, Stroudwater can help the hospital evaluate commercial contracts and work with the hospital to address these issues in preparation for and compliance with the Pricing Transparency regulations. - Part 3: Cost Report Modeling & Pricing Impact
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Part 3: Cost Report Modeling
For critical access hospitals (CAHs), changes in CDM prices will impact departmental RCCs and may negatively impact short-term cash, longer term reimbursement, and accuracy of decision making and chargemaster price setting. Without a financial model to understand the impact of CDM price changes on cost-based rates, CAHs are at risk of deferring necessary cost-based cash and losing revenue from Medicare Advantage plans that only pay a prospective cost-based rate without settlement. - Part 4: Pricing Transparency Implementation Oversight
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Part 4: Pricing Transparency Implementation Oversight
The pricing strategy implementation will consist of a review of information currently available and a comparison to the CMS requirements. As a result of the conversations and data review, Stroudwater will develop an action plan to address issues and provide additional resources, training, and education where necessary.
Contact the Practice Leaders
Wade Gallon
Amy Graham
