On January 1, 2021, a CMS hospital price transparency rule will go into effect. The rule is part of CMS efforts to help lower healthcare costs and provide data for patient awareness of their healthcare purchases.
As the rule includes a $300/day fine for failure to comply, hospitals and health systems have a vested interest in preparing for the rule’s implementation in January. Here are 4 ways your organization can prepare for price transparency.
- Prepare and present your organization’s “value story.” While there are legal challenges to the implementation of the CMS transparency rule, the pressure on healthcare organizations to provide pricing information is not going to go away, regardless of how the legal challenges are resolved. Thus, it’s important that you get your story out to your patients. Prepare for financial conversations in an engaging, consumer-friendly manner that answer the question “How much is this going to cost me?” The CFO should be working on reworking the organization’s revenue strategy to be able to compete with other organizations.
- Compliance is key. Transparency is not going away. Both federal and state governments are getting on board with the concept. While responding to COVID-19 has occupied most healthcare leaders in 2020, there needs to be some effort put into transparency compliance. There will probably be quite a few organizations that won’t reach compliance status by January.
- Don’t default to accepting the penalty. Caroline Znaniec, a managing director in the healthcare practice segment of CohnReznick LLP, says that CFOs at many organizations are willing to pay for noncompliance rather than comply with the rule. However, this strategy not only impacts the bottom line, it also sets an organization up for being called out publicly by CMS. Znaniec suggests a better approach is to work on improving the business plan, using an understanding of consumer expectations.
- Line up vendor assistance sooner rather than later. Most organizations don’t have the expertise or bandwidth to put together all the pieces required to become compliant with the transparency rule and will require assistance from one or more vendors.
The move towards healthcare pricing transparency has bipartisan backing at the state and federal level, so regardless of the November election’s outcome, government support for the policy will continue.