September 25, 2019

Seema Verma, Administrator

Centers for Medicare & Medicaid Services

Department of Health and Human Services

7500 Security Blvd

Baltimore, MD 21244

September 25, 2019

RE: Comments on Expanded Hospital Price Transparency Mandates Contained in

Hospital Outpatient Prospective Payment System Proposed Rule for CY 2020

Docket Number: CMS-2019-0109

Docket RIN: 0938-AT74

Docket Name: CY 2020 Hospital Outpatient PPS Policy Changes and Payment Rates and Ambulatory Surgical Center Payment System Policy Changes and Payment Rates CMS-1717-P

Dear Ms. Verma:

Thank you for the opportunity to submit comments on the OPPS Proposed Rule relative to expanded price transparency requirements for hospital and health system providers. Since 1991 our firm has focused specifically on hospital Chargemaster management and software tools. Additionally, our managing partners have experience in healthcare since 1976 and bring hospital operational and information technology work experience to our comments provided herein.

We support transparency and realistic rates for hospital pricing but feel strongly that the deadlines set forth in the President’s Executive Order and the later CMS Proposed Rule on Price Transparency for 2020 are not realistic.

Based on our understanding of hospital information systems, hospital charge structure, and chargemaster and charge capture variability, it is highly likely that the time required to expand the public view Chargemaster and develop accurate data for the Shoppable Services price estimates will be significantly more than CMS estimates. We feel that hospitals are not being provided a fair implementation timeframe, and the time from the release of a Final Rule to the 1/1/20 effective date is not sufficient to implement CMS requirement accurately or thoroughly.

Information Collection Requirement Estimates

Section D. ICR for Proposal on Hospital Price Transparency” p. 713+ (Display Copy)

CMS estimates in total that twelve (12) hours are going to be required to comply with the proposed guidelines, including:

  1. 1 hr allocated for General and Operations Managers to review and determine compliance requirements
  2. 1 hour allocated for legal to review and determine compliance requirements
  3. 8 hrs allocated for the business operations specialist tor 1) review policies and business practices in the context of the defined terms and requirements for information collection then determine how to comply to 2) complete necessary processes and procedures to gather and compile required information and post it to the web in the form and manner specified by this proposed rule
  4. 2 hours allocated for network and computer system administrators to meet requirements specified by the proposed rule

The following paragraphs include our comments on the four separate time estimates above. While we are not in a position to provide a time-study or workflow analysis, we do feel that CMS needs to consider the complexities of its required price information. We believe there is a significant burden for hospital providers both in the time frame put forth, the data requested, and the format that is expected.

Comment on the time estimate for item 1) above: This section addresses managers’ time to review and determine compliance requirements. We have timed our detailed reading of the rule and documentation of the requirement highlights and have exceeded 6 staff-hours for one consultant. We also have heard feedback from consulting peers and providers about the time requirements for evaluation of operational and compliance requirements. We believe the estimate of one hour is very much underestimated, and encourage CMS to obtain time estimates over the next two quarters to a year. Our time estimates include the following:

  • Time to read the applicable sections of the rule and documentation of operational and workflow process issues, concerns, and strategic plans per person = 3.0-6.0 hours
  • Individuals who need to review the rule = no less than 4 individuals including:
    • Revenue Integrity, Chargemaster management, or similar-defined teams in hospitals are consistently no fewer than 4 individuals in executive and mid-level Revenue Cycle management.
    • Our experience is that the individuals likely to include: CFO, Revenue Cycle Manager, Business office manager, Chargemaster Coordinator, Compliance Officer/Analyst, and possibly others in mid-revenue cycle management positions.
    • Larger health systems will likely have many more individuals who need to read the Final Rule requirements and subsequent CMS communications and clarifications. Health systems seeking consistent strategies and display formats will likely require 2-4 hours to hold strategic meetings to review the rule’s requirements
  • Based on our timed review, we estimate that at a minimum, hospitals will need to spend at least 12 hours reading and documenting operational issues, concerns, and potential challenges.

Comment on the time estimate for item 2) above: We cannot provide the estimated time for legal to review and determine compliance requirements and hope that specific time estimates will be submitted by appropriate commenters. However, based on the concepts noted below, we feel that the one hour estimate seems to be very much underestimated.

  • CMS estimate= 1 hour allocated for legal to review and determine compliance requirements
    • Legal review requires not only reading the applicable sections of the Proposed Rule but also the evaluation and interpretation of legal and compliance impact. We believe that legal and compliance staff will need to be involved, and will require:
      • Time for all to review the rule
      • Time to compile lists of concerns and questions
      • Two or more 1-hour meetings to discuss risk, strategies, and plans
      • Debriefing time through reports or meetings with hospital leadership
      • Incorporation of the transparency requirements into compliance programs and long term monitoring to ensure adherence to the requirements
    • We believe that the time for legal to review and determine compliance requirements must include the review of each and every payer contract to determine the non-disclosure and confidentiality terms that the hospital/health system must be aware of. This time will be directly correlated to the number of contracts and the variability of terms.
    • Not only will the legal and compliance staff review the Proposed Rule, but they will also read related CMS Transmittals, MLN Matters or FAQ documents.
      • We do hope that CMS will formalize the requirements in more detail either in the Final Rule and anticipate an additional hour to two hours for review of additional documents.
      • In our experience with the 2019 Pricing Transparency mandates, our company dedicated over 20 hours analyzing language, reading industry input on vague CMS guidance, documenting and distributing clarifications once FAQs were provided (yet not announced in Transmittals), and discussing unclear requirements or terms with our peers.

Comment on time estimate for item 3) above: This section discusses time for the review of policies and business practices in the context of the defined terms and requirements for information collection then determining how to comply to complete necessary processes and procedures to gather and compile required information and post it to the web. We have helped numerous hospital clients and software customers with guidance, software solutions, and strategies relative to the 2019 Price Transparency requirements. We are aware of health systems that spent two hours weekly for four to eight weeks (in teams of 4-5 individuals) on this topic simply to plan their approach to the more simple 2019 rules. We believe the expanded requirements are significantly underestimated at only 8 hours for one individual.

  • CMS estimate=8 hrs allocated for the business operations specialist tor 1) review policies and business practices in the context of the defined terms and requirements for information collection then determine how to comply to 2) complete necessary processes and procedures to gather and compile required information and post it to the web in the form and manner specified by this proposed rule.
    • Planning for additional fields in the expanded Public Chargemaster file will require no less than 4 hours per person for 4-5 individuals per payer plan.
      • There are often various source files within hospital information systems that contain the data that is proposed to be added. Merging all data and ensuring the displayed rates are realistic and helpful to consumers will require time which varies by HIS capabilities, reporting abilities, and data structure.
      • We anticipate that some hospitals will look to consultants or software vendors for assistance in compiling this information which will be an added cost.
    • Planning for adding negotiated rates to each Chargemaster item in the Public View machine-readable file is a task that we are unable to estimate due to the variability that hospitals face.
      • If hospitals have a significant volume of payer-specific negotiated rates, we believe that the estimate of time needs to be expanded to more accurately reflect a “per payer” or “per contract” time to aggregate this data and to merge it with the public view Chargemaster.
      • Negotiated rate information is not populated nor maintained within the same information systems masterfiles as Chargemaster data, and may not be easily correlated from a separate contracting database. Hospitals will have to correlate the payer rate with the Chargemaster rate with some key values.
      • Payers and providers may have agreed upon negotiated rates for certain line item charges, but other contract terms may also be in place. More complicated contracted payment terms (such as “per procedure” rates, “percent of charge” rates, “not-to-exceed” rates, “carve-out” rates, “lesser of” charge or other rates, rates based on other payment systems (e.g. OPPS, MPFS, etc.) and other unique contract terms will need to be normalized down to the charge item level to create an accurate ‘negotiated rate’. We believe that this effort will take substantial time based on the complexities of payer contracting.
    • Planning for creating a method to compile, display, and maintain the “Shoppable Service packages” file is a larger concern relative to time estimates. We believe that sophisticated relational database analysis with robust web-based display modules are going to be needed unless the provider has other existing software solutions. CMS has asked for “payer-specific negotiated charges for the primary shoppable service side-by-side with payer-specific negotiated charges”in the proposed rule. Relative to this requirement we have the following concerns:
      • Small hospitals and organizations operating at a loss will find it difficult to budget price estimation tools. They will, therefore, be required to build internal models which may or may not be accurately created.
      • The time needed for teams to build a resource with the estimated price for shoppable service charges by CPT /DRG code will require hospitals to compile true estimates of not only the charge amount but also the associated services. This is not an easy task, as we note below:
        • No two surgical procedures in an organization are exactly the same relative to time, complexity, and unique patient requirements. Costs and charges are highly varied.
        • Other than a small number of procedures such as endoscopy, the majority of health care systems charge surgical procedures based on time.
        • In addition to time, the associated services (recovery, medications, supplies, and common ancillary services) will vary based on the clinical requirements of the patient.
        • CMS already provides a great deal of information in its standard analytical files. We believe that this information can be used rather than hospitals being required to calculate average charge information.
          • We believe that CMS will need to update the MPFS public-use data files of billed charges for a complete and more timely representation of provider claims data. The current files don’t currently include modifiers (essential to differentiate technical from professional components) and are aggregated differently than hospital standard analytical files.
      • Unlike ASC or physician charges, the complexities surrounding surgical procedures within hospitals and hospital outpatient settings lead us to recommend eliminating surgical procedures (CPT range 10000 – 69999) from the suggested CMS list of Shoppable Services codes for the rollout year of 2020.
      • We have concerns with mention of migrating to 1000 shoppable services and encourage CMS to evaluate the success of the 2020 mandate for at least a full year prior to expanding the procedure count.
      • Due to coding rules, payment systems, and CMS guidance, certain procedures often have multiple charge components. Due to claims requirements and payment system needs, hospitals charge separately for certain charge components then charge separately for supplies, drugs, ancillary tests, anesthesia, and recovery.
      • The time and effort for adding negotiated rates to each shoppable service should not be estimated without in-depth input from hospitals on how their contracts are developed and how negotiated rates may be displayed. We expect this requirement is the most onerous due to the variability in charge structure and price calculations for the ‘chargemaster pricing’ as well as the ‘negotiated charge.’
  • As requested in the Proposed Rule, we would like to provide input on the CMS list of Shoppable Services as noted in TABLE 37.—PROPOSED LIST OF 70 CMS-SPECIFIED SHOPPABLE SERVICES. We believe that the following services should be removed from the list of Shoppable Services due to the variability in their cost, charge structure, and charge amounts and the associated complexity for providers to develop a sound proposed rate for the public:
  • Cardiac valve and other major cardiothoracic procedures with cardiac catheterization with major complications or comorbidities  216
  • Spinal fusion except cervical without major comorbid conditions or complications (MCC) 460
  • Major joint replacement or reattachment of lower extremity without major comorbid conditions or complications (MCC). 470
  • Cervical spinal fusion without comorbid conditions (CC) or major comorbid conditions or complications (MCC). 473
  • Uterine and adnexa procedures for non-malignancy without comorbid conditions (CC) or major comorbid conditions or complications (MCC) 743
  • Removal of 1 or more breast growth, open procedure 19120
  • Shaving of shoulder bone using an endoscope 29826
  • Removal of one knee cartilage using an endoscope 29881
  • Removal of tonsils and adenoid glands patient younger than age 12 42820
  • Diagnostic examination of esophagus, stomach, and/or upper small bowel using an endoscope 43235
  • Biopsy of the esophagus, stomach, and/or upper small bowel using an endoscope 43239
  • Diagnostic examination of large bowel using an endoscope 45378
  • Biopsy of large bowel using an endoscope 45380
  • Removal of polyps or growths of large bowel using an endoscope 45385
  • Ultrasound examination of lower large bowel using an endoscope 45391
  • Removal of gallbladder using an endoscope 47562
  • Repair of groin hernia patient age 5 years or older 49505
  • Biopsy of prostate gland 55700
  • Surgical removal of prostate and surrounding lymph nodes using an endoscope 55866
  • Injection of substance into spinal canal of lower back or sacrum using imaging guidance 62322-62323
  • Injections of anesthetic and/or steroid drug into lower or sacral spine nerve root using imaging guidance 64483
  • Removal of recurring cataract in lens capsule using laser 66821
  • Removal of cataract with insertion of lens 66984
  • In summary, rather than include complex procedures for the initial year of the Shoppable Services requirement, we suggest CMS limit the number to fewer charges than 300 (perhaps less than 100) and focus initially on ancillary procedures, E/M services, behavioral health services, and rehabilitative services (PT, OT, etc.). We believe that narrowing the listing of services to a smaller number of single charge procedures will be easier for hospitals to aggregate.

Comment on time estimate for item 4) above: We do not believe that the two-hour network or computer system administrator time estimate is sufficient based on our development of a commercial price transparency portal and our consulting services in the chargemaster and hospital pricing arena.

  • CMS estimate= 2 hours allocated for network and computer system administrators to meet requirements specified by the proposed rule
  • Unless the provider uses commercial products for published Public View Chargemaster files, DRG price files or Shoppable Service compilations, we believe that significant man-hours will be required by hospital Information Technology departments. Time is needed to:
    • Define (and refine) the Public View Chargemaster content and compile data from multiple sources
    • Develop methods to update the above file as appropriate to avoid consumer confusion or outdated data
    • Expand the Chargemaster to include the payer-specific rate information
    • Select the hospital-defined Shoppable Services and create a display format that would be considered by CMS as “user-friendly.”
    • Add costs and listing of the “related services” (compiled from sources such as claims history or other records of utilization trends) which are not readily available and often require data normalization and analysis for a representative and realistic estimate.
    • Add to the above the negotiated rate information requiring the same assessment of negotiated rates for the related services for all different payers/plans
    • Internet portals or website location decisions will most likely require additional time that hasn’t been noted in the time to create display formats noted in the bullets above.

Summary of our comments:

  • We believe that, as written, the requirements in the Proposed Rule for Shoppable Services is not operationally reasonable and will create technical challenges for hospitals due to the volume of data being requested.
  • We expect that some organizations will risk financial penalty rather than dedicate time to implement the requirements because of their inability to prepare the required information by 1/1/20.
  • We suggest that CMS work with a focus group of several large health systems and industry consultants to understand the actual time and effort for the Price Transparency requirements in the 2020 Proposed Rule.
  • Due to what we feel are gross underestimates in the time and administrative burden, we do not feel that it is fair for hospitals to have to contest CMS time estimates by performing time studies without explicit and detailed technical requirements. Such studies would be more meaningful once a pared-down set of requirements has been in effect for several quarters.
  • We believe as a result of the Proposed Rule that many hospitals will find that they must purchase costly charge estimation modeling tools. Manually compiling the required information in an accurate fashion is highly complex and challenging and may not be within some organization’s capabilities. To contest CMS’s comments, we want to note that the information being required is not ‘readily available.’
  • We have concerns about the long term effect of increased price publication:
  • We believe that hospitals will be challenged by patients and may face potential legal action when estimates are not the exact amount of billed charges.
    • The variability of charges is well known in the industry, and estimates that are not accurate are likely to cause patient complaints and legal challenges.
  • What’s more, we believe that hospitals will estimate to the high side, which may result in higher charge amounts. It should be noted that many hospitals refer to market data more than they use true procedure-level cost for pricing analysis. Rather than lower prices, we expect that hospitals will simply raise rates to stay in line with their competitors. This introduces concerns about the market controlling prices (even if not colluding as in price-fixing) and maintaining rates at unreasonable values without knowledge of true costs.
    • Expanded published hospital charge data is likely to cause hospitals to set prices at or near market medians or averages, which may not be reflective of cost.
    • The proposed rules do not encourage the true need – determining costs and marking up services at a reasonable amount.
  • We recommend a reduced set of required Shoppable Services and a longer timeframe for implementation of the publication requirements to allow complete and accurate implementation
  • We recommend that CMS provides very specific requirements and clarifications on the publication data specifications and display requirements. We suggest:
    • Detailed Final Rule guidance
    • Updates in CMS Transmittals and MLN Matters to ensure that communications are transparent and timely from CMS (We have found that the releases of FAQs are unpredictable and often slip past providers unnoticed for days or weeks.)
    • If FAQs are needed, we suggest Transmittal updates to show when FAQs are posted with additional requirements
  • We recommend a voluntary working group of providers, insurance companies, industry consultants, and software vendors work with CMS to study the Price Transparency Proposed Rule (and Executive Order) requirements, and quickly refine the requirements prior to the end of the 1Q20 with very specific guidelines on publication information and possibly refined or expanded requirements.
  • Because of the transformative impact of the Price Transparency mandates, we suggest that:
    • CMS remains open to making modifications to the requirements at least quarterly.
    • We also feel that there should be an active and ongoing forum so that CMS will continue to address industry questions on the mandated 1/1/20 Price Transparency requirements.
    • Rather than through randomly released “FAQ” documents we would suggest a more formal channel and/or a new method for hearing and considering industry input.

Thank you for the opportunity for us to share our company’s views on Price Transparency and the 2020 proposed requirements. We support the end goal of cost-based pricing for hospitals utilizing reasonable mark-ups. However, we feel that the public and CMS are clearly not aware of how few hospitals know their true costs on a procedure or charge item level basis. To that extent, we agree that placing prices in the public eye may create some market pressure, but do not believe that the Proposed Rule Price Transparency timeframes and technical specifications are realistic in the short time between the 2020 Final Rule and the 1/1/20 effective date.


Rosemary Holliday

Rosemary Holliday, Managing Partner

Holliday & Associates

 (530) 550-0865 / (800) 831-3323 ext 2

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