CDM Transparency – More speculation & More confusion

(CDM Transparency Series)

Late in the year, we find ourselves working with limited details and much industry concern about the CMS Charge Master publication requirements. Here at H&A, we’ve been collaborating with colleagues and clients alike to hear what hospitals are planning to meet the CDM Transparency requirements. At this point, most hospitals have decided to move forward despite a lack of specificity on the January 1st mandate. Below are some points observing where we are today, suggestions for approach, and rumors and misinformation.

Where we are today

Chargemaster Publication is on everyone’s minds. CMS’ FAQ and Final Rule guidance, as we have noted before, have left unanswered questions and led to increased speculation. We had hoped for more clarity and official direction. As of late December 2018, we wanted to catch readers up on additional details on the CDM Transparency topic. Not only have we developed this document to summarize four key steps your team needs to take to comply, we’ve also included input on industry misinformation that has caused confusion.

The Holliday & Associates team as well as our consulting peers have been long-concerned about the lack of clear and timely CMS guidance on the price transparency /Charge Master Publication regulation, and are noting widespread industry concern. We’ve observed many hospitals trying to “read between the lines” of the limited language, and many have spent significant time discussing the mandate. Unfortunately, we have also noticed some companies ‘overinterpreting’ the language from CMS with guidance based on opinion rather than fact.

Here at H&A, we think the best approach is having the following four items ready & available by January 1st:

  • a charge item look up or export file (such as the ChargeAssist® CDM Public Portal or an appropriately-formatted file meeting CMS “machine-readable” definition)
  • DRG-specific average charges listing (available in the ChargeAssist® pricing module) referencing Medicare standard analytical file (claims) data
  • patient educational information about charges (see our next article for example language), and 
  • details of how patients can obtain an estimate of their out of pocket costs (through a call to your hospital, an estimator software tool, etc.)

Then, be ready to refine your approach if CMS provides greater clarity or additional mandates.

Rumors & Misinformation

CMS has now provided two FAQ websites yet no Transmittals or MLN Matters documents are available on this matter. Some hospital association information has been shared with providers, and several industry expert webinars have been conducted, yet many questions still persist.

Importantly, we also wanted to dispel some rumored requirements that seem to have cropped up in the last few weeks:

  • CMS has not asked hospitals to display competitive market information. There are many considerations when providing market data. Publishing comparative rates can lead to patient confusion or future challenges if not calculated and portrayed appropriately.
  • CMS has not asked hospitals to display AWP information. Although they did state that pharmacy or other charges coming from alternative applications must be included in the data posted, they are not asking for cost or pricing mark-up formulas.
  • The ACA requirements for IPPS hospitals to make available their DRG average charge information does not state that hospitals must aggregate current prices against DRGs. Most now believe the use of claims-based Medicare average charges for this information meets the requirement.
  • Neither Strategic Pricing Studies, nor Patient Price estimators, Comparative Pricing Websites, Charge Master Reviews, or special software are mandated or required to comply with the CMS rules. While various consulting and software functions will improve your organization’s reputation as your data is scrutinized, CMS is not requiring any special investments beyond making data publicly available.
  • Display of every data element in your CDM, EAP, or other charge files has not been stipulated by CMS. We (and many others) feel that only charge item identifier (number, description, etc.) price, and possibly other helpful fields like department/cost center/billing category/charge type are the fields that represent hospital charges, and most useful for the shopping public to see your charge item pricing. (Despite announcements of data that can/can’t be published and required copyright notices, we only suggest limited fields in your public view file.)
  • Beyond the aforementioned DRG information, aggregated procedure-based charges, average prices for specific codes, and ranges of certain charge items are not currently required by CMS in the Medicare mandate.
  • Pricing updates and CDM revisions are not restricted under the CMS publication guidance. CMS merely states that the file is displayed annually or “more often as appropriate”.

It’s likely that more details from CMS may be announced in future communications. At this point, however, hospitals should move forward with their best efforts to develop a public display file export along with ways to educate your patients and inform them of estimated out of pocket costs. You’ve hopefully cleaned up your public view CDM to remove non-charged items and included a snapshot of prices for any price override items that may be coming from other ancillary applications or files. If a ChargeAssist user, you also have most likely looked at the CDM Public Portal to see if you’d like to roll it out.

For your reference, we have once again added the two FAQs from CMS and blog posts from one hospital association as CMS updates were being released. Also we refer readers to our previous articles on this topic and the upcoming What Your Shopping Public Needs to Know article coming out early this week.

Holliday & Associates offers the ChargeAssist® CDM Public Portal to new customers as well as within our ChargeAssist® software product- an HFMA Peer Reviewed™ Charge Master auditing and resource tool for easily auditing, collaborating, and maintaining Charge Master files. We also provide Charge Management CDM Coordinator Education and CDM Reviews by a team of credentialed clinical, coding and technical auditors. 

CMS FAQ #2

Reference 1

Additional Frequently Asked Questions Regarding Requirements for Hospitals To Make Public a List of Their Standard Charges via the Internet

Q. Are Inpatient Rehabilitation Facilities and Inpatient Psychiatric Hospitals required to make public a list of their standard charges via the Internet?

A. Yes, this requirement applies to all hospitals operating within the United States.

Q. Are Critical Access Hospitals and Sole Community Hospitals required to make public a list of their standard charges via the Internet?

A. Yes, this requirement applies to all hospitals operating within the United States.

Q. Do the requirements apply to drugs and biologicals?

A. Yes, the current requirements apply to all items and services provided by the hospital.

Q. Is a hospital required to post its standard charges for drugs, biologicals, or other items and services that it provides if those standard charges are not reflected in its chargemaster?

A. Yes, it is the responsibility of the hospital to establish (and update) and make public a list of the hospital’s standard charges for all items and services provided by the hospital, including all drugs, biologicals, and all other items and services provided by the hospital. CMS encourages hospitals to undertake efforts to engage in consumer friendly communication of their charges, including for drugs and biologicals, to help patients understand what their potential financial liability might be for services they obtain at the hospital, and to enable patients to compare charges for similar services across hospitals. A hospital is not precluded from posting additional price transparency information in addition to its current standard charges.

Q. In addition to establishing (and updating) and making public a list of the hospital’s standard charges for all items and services provided by the hospital, what hospitals are required to establish (and update) and make public a list of their standard charges for each diagnosis-related group established under section 1886(d)(4) of the Social Security Act?

A. All hospitals operating within the United States are required to establish (and update) and make public a list of their standard charges for all items and services provided by the hospital. Under current guidelines, subsection (d) hospitals are additionally required to establish (and update) and make public a list of their standard charges for each diagnosis-related group established under section 1886(d)(4) of the Social Security Act. The format for standard charges for each diagnosis-related group is the hospital’s choice. CMS posts information regarding inpatient charges for subsection (d) hospitals at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-andReports/Medicare-Provider-Charge-Data/Inpatient.html. Subsection (d) hospitals may, but are not required to, use this format with respect to the additional requirement that the hospital establish (and update) and make public a list of the hospital’s standard charges for each diagnosis-related group established under section 1886(d)(4) of the Social Security Act.

Q. Why isn’t a PDF considered machine readable?

A. We have defined a machine readable format as a digitally accessible document that includes only formats that can be easily imported/read into a computer system (e.g., XML, CSV). A PDF does not satisfy this definition because although it is a digitally accessible document, it cannot be easily imported/read into a computer system.

Q. What happens if a hospital does not make public a list of its standard charges via the Internet?

A. The hospital will not be in compliance with the law. In the FY 2019 IPPS/LTCH proposed rule (83 FR 20549), CMS sought comment on the most appropriate mechanism for CMS to enforce price transparency requirements. As indicated in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41686), specific additional future enforcement or other actions that we may take with the guidelines will be addressed in future rulemaking

CMS FAQ #1

Reference 2

Frequently Asked Questions Regarding Requirements for Hospitals To Make Public a List of Their Standard Charges via the Internet

Q. What format is a hospital required to use to make public a list of their standard charges via the Internet?

A. The format is the hospital’s choice as long as the information represents the hospital’s current standard charges as reflected in its chargemaster.

Q. Do the requirements apply to all items and services provided by the hospital?

A. The current requirements apply to all items and services provided by the hospital.

Q. Do the requirements restrict a hospital from posting quality information or additional price transparency information?

A. CMS encourages hospitals to undertake efforts to engage in consumer friendly communication of their charges to help patients understand what their potential financial liability might be for services they obtain at the hospital, and to enable patients to compare charges for similar services across hospitals. A hospital is not precluded from posting quality information or price transparency information in addition to its current standard charges in its chargemaster.

Q. What is the definition of “machine-readable” for purposes of the requirements?

A. By definition, machine readable format is a digitally accessible document but more narrowly defined to include only formats that can be easily imported/read into a computer system (e.g., XML, CSV). A PDF, on the other hand, can be a digitally accessible document but cannot be easily imported/read into a computer system.

Q. What hospitals are required to make public a list of their standard charges via the Internet?

A. In the FY 2015 IPPS/LTCH proposed rule and final rule (79 FR 28169 and 79 FR 50146, respectively), CMS noted that section 2718(e) of the Public Health Service Act, which was enacted as part of the Affordable Care Act, requires that each hospital operating within the United States, for each year, establish (and update) and make public (in accordance with guidelines developed by the Secretary) a list of the hospital’s standard charges for items and services provided by the hospital. There are no hospitals operating within the United States with exemptions from this requirement under the current policy.

Q. Does participation in a state online price transparency initiative satisfy the federal requirements?

A. CMS is fully supportive of and encourages state price transparency initiatives. However, under the current guidelines, participation in an online state price transparency initiative does not exempt a hospital from the requirements.

Reference 3

Oklahoma Hospital Association Public Website postings

CMS again updates hospital price transparency requirement

Posted on: 12/12/18

Last week the Centers for Medicare and Medicaid Services (CMS) posted an additional FAQ document on their guidance for hospitals to post “standard charges” on the internet in machine readable form, effective January 2019.

Some hospitals have told CMS that their hospital chargemaster does not contain charge information for drugs, because this price information comes from a pharmacy module or application. The new CMS document states that even if the hospital’s chargemaster lacks standard charges for drugs, biologicals, or other items and services provided by the hospital, those standard charges must be included in the list posted on the internet.

CMS also reminded hospitals that the law (ACA) requires each hospital to “make public a list of their standard charges for each diagnosis-related group,” and specifies that this DRG requirement applies only to subsection (d) hospitals: those paid under Medicare’s Inpatient Prospective Payment System. It is unclear if CMS expects this DRG information to be, like the itemized detail charge information, posted on the internet in machine-readable form.

A CMS FAQ from late September did not include any guidance on posting DRG-based “standard charge” information. The new FAQ says hospitals may, but are not required to, use a format CMS utilized for reporting hospital charges by DRG, in which the average amount billed to Medicare by the hospital was reported for each DRG. Data was suppressed for DRGs when the average represented 10 or fewer discharges for the DRG in a particular year. (Rick Snyder

CMS replies on price transparency rule

Posted on: 11/14/18

Hospitals asked many questions about the 2019 price transparency rule during a CMS Open Door Forum conference call on Nov. 13. One answer was given repeatedly, as Don Thompson of the Centers for Medicare & Medicaid Services (CMS) said the requirement applies to “all items and services provided by the hospital.”

The rule requires all hospitals, effective Jan. 1, 2019, to “make available a list of their current standard charges via the internet in a machine readable format and to update this information at least annually, or more often as appropriate.”

Thompson said summaries of price averages or ranges for diagnosis related groups (DRGs) are not sufficient. However, hospitals were encouraged to provide additional information and context that would be beneficial to the patient. He also said that publishing chargemaster information is not the end goal of CMS, implying that additional information will be required in future years.

It is unclear how CMS expects hospitals to report prices for items priced variably, based on acquisition cost. During the Open Door Forum, a hospital raising this question was asked to submit the question by email. Thompson said CMS is considering adding to the Questions & Answers they’ve already posted.

In response to a question about penalties for noncompliance, Thompson said CMS is exploring enforcement mechanisms.

Hospitals question CMS price transparency rule

Posted on: 10/3/18

In the Medicare Inpatient final rule for 2019, the Centers for Medicare & Medicaid Services (CMS) added a little detail to a confusing requirement for hospital price transparency. The Affordable Care Act included a requirement for hospitals to make public “the hospital’s standard charges for items and services provided by the hospital, including for diagnosis-related groups.”

Earlier guidance from CMS was not very specific, stating only that hospitals are required to either make public a list of their “standard charges (whether that be the chargemaster itself or in another form of their choice) or their policies for allowing the public to view a list of those charges in response to an inquiry.”

Effective Jan. 1, 2019, CMS more specifically requires hospitals to “make available a list of their current standard charges via the internet in a machine readable format and to update this information at least annually, or more often as appropriate. This could be in the form of the chargemaster itself or another form of the hospital’s choice, as long as the information is in machine readable format.”

OHA’s Rick Snyder and representatives from other state hospital associations last week discussed the change with a leader in the CMS Hospital and Ambulatory Policy Group responsible for this rule. It appears that CMS interprets “standard charges” to mean simply “chargemaster,” rather than any summarized information such as by diagnostic related group, at this time. CMS sees DRG level reporting of charges by hospitals as adding value, but not as a substitute for providing a complete list of standard charges in machine readable format on the internet.

The rule does not include any requirement to include standard revenue codes or procedure codes as part of the list.

On Sep. 27, CMS published “Frequently Asked Questions Regarding Requirements for Hospitals To Make Public a List of Their Standard Charges via the Internet.” The new FAQ document states that the requirement applies to all hospitals, with no exceptions; and to all items and services provided by the hospital. Hospitals are encouraged to supplement the information with “consumer friendly information.”

Snyder and others have asked CMS to answer questions from hospitals on these price transparency requirements in a Hospital Open-Door Forum conference call, allowing time for implementation by Jan. 1, 2019.

To read more about Hospital Price Transparency, check out the following articles:
CDM Transparency 1Q19 Update
CMS’ FAQs for Price Transparency
Price Transparency Requirements for Hospitals
What your Shopping Public Needs to Know
IPPS CDM Announcement: Tips for Hospital Action Plans
Price Transparency Round 2