IPPS CDM Public Access Announcement Causing Confusion & Concerns: Tips for Hospital Action Plans

In this H&A CDM Pricing Transparency Series we focus on IPPS CDM Public Access Regulations focusing on tips for hospital action plans. The migration towards full pricing transparency is clearly underway and appears to be here to stay. We have included unknowns and questions in “What Hospitals are Asking”, our forecasts of “What to Expect”, and our thoughts on “What You Can Do”.

What hospitals are asking

The relatively-vague CMS pricing transparency, publication requirements have many concerned. Based on the title, “Requirements for Hospitals to Make Public a List of Their Standard Charges via the Internet” of section X. of the IPPS FR, many are questioning the interpretation of the wording that has been released and wondering whether CMS plans to provide more input. We have a Part 3 post that discusses the CMS Q&A document from October with our impressions.

Here are questions we are hearing from customers as well as concerns from the Holliday & Associates team:

  • Are there going to be restrictions or requirements on access such as:
    • Use of a lookup function rather than display the entire CDM
    • Password-based access controls
    • Ways to prohibit commercial companies from accessing proprietary pricing information
    • Restrictions on how hospitals control the public access or view of data
  • Will there be certain mandatory data elements defined?
  • Will publication of proprietary data (ex. CPT-4 codes) incur additional licensing fees? (Note: We have discussed with our AMA licensing contact and they are internally evaluating plans)
  • What is meant by “machine-readable” (for example, XL, database format, PDF, image file, etc.)? (Note: See our Part 3 post related to CMS October Q&A)
  • What exactly is meant by the phrase “list of standard charges”?
  • Will charging masterfiles of non-hospital entities under the hospital’s license be included in CMS’ mandatory CDM/Fee Schedule publication? (Note: See our Part 3 post related to CMS October Q&A)
  • If alternative systems or applications are used for select services or items (such as a pharmacy application driving prices for drug charges), will hospitals be required to incorporate that data into the published file?
  • How often does CMS mean “…at least annually, or more often as appropriate” for publishing the CDM? Will there be a threshold of number of charge changes that will trigger the requirement for a new public file? Will January 1st be the annual due date?
  • Is CMS going to require announcements when the public CDM file changes?
  • In what manner, and how often will CMS monitor for compliance to this mandate?
    • What are the ramifications for non-compliance?
  • Since this regulation is in the IPPS Final Rule are hospitals outside of this payment methodology excluded? (CAH, Indian Health System, etc.) (Note: CMS answered “Yes” See our Part 3 post related to CMS October Q&A)

We expect CMS to provide more guidelines since the Final Rule has resulted in widespread uncertainty. However, there is a good bit of planning and preparation that can occur now to avoid an end-of-year crisis.

What to expect with the 1/1/19 requirements

  • Watch for additional requirements through Transmittals and MLN Matters articles over the coming weeks. (Note: See our Part 3 post related to CMS October Q&A.) Also watch for this topic on potential CMS Open Door Forum calls as requested by the hospital associations.
  • Expect an increased amount of charge analysis by outside parties after files become more accessible to the public.
  • Expect the press, advocacy groups, and the public to more frequently challenge your organization’s prices.
  • Vendors, consultants, and other industry providers will promote solutions for quick pricing evaluations during the fourth quarter.
  • Health Systems will improve their communications to avoid the appearance of defensiveness about pricing. They may try to educate patients on other areas such as quality, centers of excellence, personalized care, cutting edge technology, etc.
  • Hospitals with poorly-articulated pricing strategies will encounter public relations challenges.
  • Transparency of Charge Masters will continue for the long-term.
  • CMS is likely to expand their publication requirements in future years.
    • We expect minimum data set requirement
    • We expect CMS will move towards a Charge Master portal providing look up access to all hospitals’ charges.
  • Hospitals will increasingly focus on finding affordable methods to identify procedure level cost; and will try to establish prices based on more reasonable mark up over cost if possible.
  • Hospitals will likely focus on revenue-neutrality as they lower many charge items’ pricing.

As Charge Master publication expands, strategic hospitals will fare better than those reacting to regulatory changes without a plan of action. The next section provides some ideas on how to better-manage this change.

What you can do between now and January 1st

  • Establish an internal team to monitor for additional CMS guidance in future transmittals, MLN matters, or other publications.
    • Brainstorm to develop an action plan, priority and contingent tasks, and a list of unknowns and concerns.
      • Assign preliminary task ownership and timelines.
      • Identify other organizational initiatives that may impact readiness.
  • Confirm that your Charge Master file is up to date, valid, and accurate with a data quality monitoring action plan:
    • Remove inactivated or no longer used charge items from export files that will be used for public viewing.
      • Distribute a current CDM file or upload a current file into your Charge Master software for each department representative.
      • Exclude any cost centers that are no longer applicable.
      • Ask departments to flag for inactivation any charges that are no longer applicable or valid.
    • If a CDM Review, Internal Pricing Update, or External Pricing analysis consulting project is underway, confirm milestones, timelines for implementation and your organization’s readiness to have new pricing by the 1/1/19 publication date.
    • Document current pricing methods for all items and services (maintain this as a confidential executive reference for internal use only):
      • Define how pricing has been established and maintained and how updates are performed.
      • If prices are overridden, document for your internal team how rates are generated.
      • If a default price field in the Charge Master is changed by other functionality prior to claims processing, document how it is populated and maintained. Common examples are:
        • Periodic information system routine to automatically override default pricing
        • Manual updates to the charging masterfile on a scheduled basis
        • Zero pricing in the CDM
        • Excluding the overridden field’s prices from reports or public access data
      • For cost-based pricing driven by mark up functionality:
        • Confirm whether your system has a method to access the most recent calculated price for individual charge items.
        • Define basis/source for cost data and determine whether it is valid and current.
        • Ensure the markup formulas are accurate.
          • Maintain documentation of all formulas for internal reference.
        • Select a sample of high-cost items with this functionality and check mark up functionality.
          • Also select and monitor top utilized items.
  • Introduce the Final Rule requirements to Hospital Administration, Board of Directors, and your Management Team so all are aware of expanded regulations and potential increase in public scrutiny.
    • Educate leadership on price transparency efforts already underway at your organization.
    • Share details of the expanded publication that CMS has mandated.
    • Present your team’s action plan to demonstrate readiness.
    • Ask for input, concerns and feedback to engage staff.
  • Coordinate with your information systems department to ensure readiness by the January 1, 2019 effective date.
    • Be sure to differentiate between reports to meet national CMS requirements and those for existing state requirements.
    • Consider the ramifications of publishing certain data elements relative to patient, press, competitive organizations, associations, etc.
    • Identify your desired data elements for public display:
      • Determine how to address default and override fields.
      • Decide whether your organization will exclude CPT/HCPCS, Revenue Codes, or modifier fields.
      • Address whether it is best to display the billing description or alternative descriptors.
      • If inpatient and outpatient prices vary, decide how to display them.
      • Confirm how to clearly-identify reference lab prices and differentiate those charges from in-house lab testing.
      • Determine whether cost center or GL name would be beneficial for display.
      • Avoid reporting any statistical charges, placeholder charge items, or other records that are not specifically chargeable services.
      • Remove miscellaneous charges from the public access report.
    • Determine the preferred access method (display, format, etc.) of your public view CDM information.
    • Establish an annual work orders/ processes to ensure timely updates to meet CMS requirements and state requirements (if applicable).
  • Forecast how the hospital’s patients and community may respond when they find they can easily review your charging masterfiles.
  • Consider complementary patient communication solutions.
    • Review all pricing or ‘patient-friendly billing’ policies, procedures or materials already developed and in place to ensure they are being consistently applied.
    • Prepare patient communication tools that explain hospital pricing and the Charge Master file.
      • Note that total billed charges vary based on patient acuity and treatment, including a variety of services, items, and products provided under physician order.
      • Clarify that the patient’s out of pocket responsibilities are based on the insurances’ negotiated rates and the terms of the patient’s insurance plan.
      • Define a contact point for the patient to ask questions and commit to a minimal turnaround time for responses.
      • Note that the patient may see Hospital charges and separate charges from physicians.
      • See HFMA “Patient Friendly Billing” guidance for other tips on addressing patient relations.
    • Now may be a good time to look at internal or commercially-developed patient cost estimator methods that use coverage terms, historic claims information, and other methods to project out of pocket costs for the patient.
    • Assign staff for pricing queries and develop an escalation plan if administrative involvement is needed.
  • Perform a brief audit of the CDM for red flags.
    • Upload current data into your CDM tool and run basic audit functions to quickly identify errors.
      • Codes are the key link to much of the available market data and outpatient payment rate information. Remember that CPT/HCPCS errors can lead to pricing mistakes.
      • If separate from the CDM, also audit Pharmacy HCPCS and, if applicable, billing multipliers.
    • Review the recent H&A Charge Master pricing article series with tips to uncover pricing anomalies in your Charge Master.
  • Avoid surprises with your prices. Evaluate your Charge Master against competitors through Charge Master tools like ChargeAssist® to know whether pricing is comparable to the market.
    • Pick comparative hospitals from the perspective of patients and the public.
    • Decide whether aggregated groups, state, or national data may also be desired.
    • Analyze inpatient as well as outpatient data for an idea of your organization’s market position relative to price. For example:
      • Total comparative charges for the hospital’s top 10 or 20 DRGs
      • ED Facility E/M charges (select all E/M ER codes including Critical Care)
      • 20 most common ED procedure charges (ECGs, Insert temp. Indwelling simple bladder cath, measurement of post-voiding residual urine and/or bladder capacity by ultrasound, non-imaging, simple repair codes (pick several), splint application (pick several), Injection of anesthetic agent, etc.
      • Room & Board rates (Semi-Private, Private, and Critical Care)
      • Your organization’s most common CT (e.g., Abdomen & Pelvis, Head or Brain, and MRI procedures (e.g., Spinal Canal, Brain)
      • 10-20 most common X-Ray procedures (for example, CXR, LS Spine, Transvaginal Ultrasound, Abdomen (KUB), Abdominal Ultrasound, etc.)
      • Top screening procedures (screening mammogram, PSA, screening colonoscopy, DXA scan, Screening breast tomosynthesis, etc.)
      • 10-20 most common lab tests (Blood Glucose, CBC, Basic and Comp. Metabolic Panels, etc.)
      • 10-20 most commonly-dispensed injectable drugs (ask Pharmacy since units of service and the use of billing multiplier functions can distort usage statistics)
      • Most common PT and OT services (e.g., Evaluations (multiple codes), Therapeutic Activities, Therapeutic Procedure for ROM, and Manual Therapy, etc.)
      • RT frequently performed services (e.g., Inhalation treatment, Pulse Oximetry, Pulmonary Function Test, etc.
    • Use a reasonable historic usage period to identify the most critical services and also project impact of changes.
    • Decide whether it’s time to evaluate other providers such as physicians, home health, hospice, etc.
  • Before revising prices when market variances are found, consider other benchmarks such as cost times markup or multipliers on various payment rates.
  • Consider the implications of rate changes on Cost to Charge Ratios or contract terms prior to making rate changes.
  • Determine whether a charge description update project is needed for clear, concise, and accurate charge descriptions. (Holliday & Associates can provide this type of engagement for your team.)
    • Use clearly-understood terms and avoid verbiage that may confuse the patient.
    • Include key terms (or abbreviations for key terms) that are reflected in associated CPT and HCPCS Descriptors.
    • Steer away from the “Short Description” fields in CPT and HCPCS files since they are overly general.
    • Add descriptor prefixes to differentiate charges with similar codes (for example, Professional Fee vs. Facility charge items).
    • Review the H&A article on Charge Descriptions from earlier in 2018 for more tips.


It’s a given that publication of hospital prices is the new norm whether mandated by states or required nationally. Despite the potential for confusion, your organization’s Charge Master data will shortly be more available to the press and the public.

Typically, with mandates that involve the public, patient, or the press, hospital leadership is cautious about the potential downstream implications. Because of the non-specific 2019 IPPS Final Rule guidance, we suspect we will hear many more questions and see further clarifications from CMS. In the meantime, we advise teams to perform a high-level CDM analysis and develop a proactive public relations strategy. As we’ve noted, clean-up work may also be necessary to ready your file for expanded public viewing.

In the end, the migration towards full pricing transparency is clearly underway and appears to be here to stay.

To read more about Hospital Price Transparency, check out the following articles:
CDM Transparency 1Q19 Update
CDM Transparency, More Speculation and More Confusion
CMS’ FAQs for Price Transparency
Price Transparency Requirements for Hospitals
What your Shopping Public Needs to Know
Price Transparency Round 2