Price Transparency “Round 2”– CMS Seeks Input

The CMS “Pricing Transparency” may be taking a more significant turn based on a proposed rule from March 4, 2019. The topic of hospital prices has now been intertwined with potentially expanding rules on “information blocking”. This article shares a section of the language from a March 4th proposed rule and our comments that are being sent to CMS.

Overall Proposed Rule Title and Summary

Source: Federal Register /Vol. 84, No. 42 /Monday, March 4, 2019 / Proposed Rules

Office of the Secretary
45 CFR Parts 170 and 171
RIN 0955–AA01
21st Century Cures Act: Interoperability, Information Blocking, and the ONC Health IT Certification Program

AGENCY: Office of the National Coordinator for Health Information Technology (ONC), Department of Health and Human Services HHS).

ACTION: Proposed rule.

SUMMARY: This proposed rule would implement certain provisions of the 21st Century Cures Act, including conditions and maintenance of certification requirements for health information technology (health IT) developers under the ONC Health IT Certification Program (Program), the voluntary certification of health IT for use by pediatric health care providers, and reasonable and necessary activities that do not constitute information blocking. The implementation of these provisions would advance interoperability and support the access, exchange, and use of electronic health information. The proposed rule would also modify the 2015 Edition health IT certification criteria and Program in additional ways to advance interoperability, enhance health IT certification, and reduce burden and costs.

Proposed Rule Sections of Interest Table of Contents

VIII. Information Blocking

A. Statutory Basis

B. Legislative Background and Policy Considerations

  • Purpose of the Information Blocking Provision
  • Policy Considerations and Approach to the Information Blocking Provisions

C. Relevant Statutory Terms and Provisions

  • ‘‘Required by Law’’
  • Health Care Providers, Health IT Developers, Exchanges, and Networks
    • Health Care Providers
    • Health IT Developers of Certified Health IT 
    • Networks and Exchanges
  • Electronic Health Information
  • The definition of information blocking applies to electronic health information (EHI) (section 3022(a)(1) of the PHSA). While section 3000(4) of the PHSA by reference to section 1171(4) of the Social Security Act defines “health information,” EHI is not specifically defined in the Cures Act, HITECH Act, or other relevant statutes. We propose to define EHI to mean:
    (i) electronic protected health information; and
    (ii) any other information that –
  • is transmitted by or maintained in electronic media, as defined in 45 CFR § 160.103;
  • identifies the individual, or with respect to which there is a reasonable basis to believe the information can be used to identify the individual; and
  • relates to the past, present, or future health or condition of an individual; the provision of health care to an individual; or the past, present, or future payment for the provision of health care to an individual.

This definition of EHI includes, but is not limited to, electronic protected health information and health information that is created or received by a health care provider and those operating on their behalf; health plan; health care clearinghouse; public health authority; employer; life insurer; school; or university. In addition, we clarify that under our proposed definition, EHI includes, but is not limited to, electronic protected health information (ePHI) as defined in 45 CFR 160.103. In particular, unlike ePHI and health information, EHI is not limited to information that is created or received by a health care provider, health plan, health care clearinghouse, public health authority, employer, life insurer, school, or university. EHI may be provided, directly from an individual, or from technology that the individual has elected to use, to an actor covered by the information blocking provisions. We propose that EHI does not include health information that is de-identified consistent with the requirements of 45 CFR 164.514(b). We generally request comment on this proposed definition as well as on whether the exclusion of health information that is de-identified is consistent with the requirements of 45 CFR 164.514(b).

To be clear, this definition provides for an expansive set of EHI, which could include information on an individual’s health insurance eligibility and benefits, billing for health care services, and payment information for services to be provided or already provided, which may include price information.

The opinions and comments in the sections that follow are based on our 40+ years’ experience in hospital operations, information technology, hospital charge practices and Charge Master data management. We believe hospital pricing publication requirements are being inappropriately focused toward hospitals rather than utilizing existing information already in hand with insurance companies, CMS, and through cost estimation software tools.

Detailed input follows separate paragraphs and sections of the Proposed Rule of 3/4/19.

Price Information

The fragmented and complex nature of pricing within the health care system has decreased the efficiency of the health care system and has had negative impacts on patients, health care providers, health systems, plans, plan sponsors and other key health care stakeholders. Patients and plan sponsors have trouble anticipating or planning for costs, are not sure how they can lower their costs, are not able to compare costs, and have no practical way to measure the quality of the care or coverage they receive relative to the price they pay. Pricing information continues to grow in importance with the increase of high deductible health plans and surprise billing, which have resulted in an increase in out-of-pocket health care spending.

Comments: We recognize and join in the frustration of patients when shopping for healthcare, and acknowledge that certain changes are needed to better understand out of pocket costs. The importance of creating certain controls on out-of-pocket costs is indisputable. The potential solutions will require participation by not only hospitals, but insurance plans, CMS, and enforcement bodies alike.

Pertaining to the Proposed Rule paragraph above, we are not clear about the noted “efficiency impacts” of hospital pricing on U.S. Healthcare as stated in the rule language above. The longstanding methods of charge practices have not dramatically changed for decades, and do not appear (in our experience) to create undue burden on providers in delivering care or billing for services. Most hospitals have well-established charge capture methodology that has been refined as new items/services are offered, as Hospital Information System (HIS) vendors implement software updates, or as CMS or AMA revise codes and claims reporting requirements. Often, itemized charge transactions drive (or are driven by) other functions such as EMR content, inventory control, or ancillary procedure reporting. Hospitals spend countless hours learning to operate in their hospital information systems environments, and charge data is often parallel and integral to multiple applications’ datafile content.

The Proposed Rule authors’ contention of “fragmented pricing” in our view is the nature of our hospital information system schema. In hospitals, charging for each itemized service or item required, ordered, and used by patient makes sense. We believe that prospectively-established prices would cause patients to be charged more for items or services since providers would likely over-estimate costs (and thus inflate their pricing). Aside from the limited amount of straightforward charge item comparisons, we don’t believe that most hospitals have adequate information available to make reasonable comparisons to their competitors for any true ‘market pressure’ to reduce the price of care.

If the term fragmented pricing is referring to multiple providers that treat the patient for a specific medical encounter, we would like to share our operational and compliance concerns. Aside from Managed Care organizations, hospitals have little control over all of the physicians and nonphysician practitioners that may treat a patient in the course of a hospitalization or outpatient encounter. As a patient, there is little choice in the treatment plan suggested in an acute medical situation. Our industry is indeed fragmented by multiple providers with unique charging, billing and varying strategic methods to pricing. However, we don’t believe that controls solely on the hospital provider can succeed.

We believe that moving from an itemized charging methodology to prospective pricing methodology will cause hospitals without accurate cost data to fail financially. Before requiring hospitals to prospectively establish prices, we suggest CMS first determine how many hospital providers have procedure level cost information and whether pricing is actually driven by some reasonable mark up over cost.

Expecting all providers (many with different business entities and information systems) to bill all charges in a single event at a prospectively established rate would most definitely create administrative burden and potential financial losses for multiple providers.

We also foresee loss of control of receivables by the many physicians and alternative providers involved in the patient encounter. We suspect that would, in turn, require complex legal arrangements and financial transactions to ensure timely and accurate payments. We would expect hospital Accounts Receivable days, a pivotal indicator of billing and collection efficiency hospitals, to soar if charging information and claims detail must come from multiple business entities that are outside of the hospital’s operational controls.

We also have concerns that this approach would place undue compliance burden upon the billing provider to ensure accurate charge and claims data. Ownership of such information would require stringent controls as well as auditing and monitoring mechanisms that far exceed what hospitals have in place today. Likewise, access to the necessary patient account data may not be within the HIS environment and require obtaining Protected Health Information transfers, creating risk of accidental disclosure.

With ongoing occurrences of charging and billing errors industry-wide, (whether simple mistakes or abusive and fraudulent practices reported weekly in the press), we believe that changing claims processing practices for the sake of patient price transparency would increase rather than reduce compliance risk.

Transparency in the price and cost of health care would help address the concerns outlined above by empowering patients to make informed health care decisions. Further, the availability of price information could help increase competition that is based on the quality and value of the services patients receive. Consistent with its statutory authority, the Department is considering subsequent rulemaking to expand access to price information for the public, prospective patients, plan sponsors, and health care providers.

Comments: We agree that accurately forecasted estimates of out of pocket costs for certain medical services make sense. However, most in the hospital industry believe that such estimates cannot be gleaned by patients viewing charge detail in the form the hospital Charge Master file or comparisons of price by DRG (both now required). Now that we are 90 days into mandated Charge Master publication, we have seen widespread disclosures (some developed by state hospital associations) in an effort to avoid confusing the prospective patient, and hear that hospitals are doubtful of any benefit to the patient. We’ve surveyed over a tenth of the industry’s hospitals and found broad variations in the data and approaches hospitals have taken to implement the rule.

We believe that expanding price transparency reporting requirements would generate administrative burden for hospitals and possibly other related providers. The January 1, 2019 Hospital Price Transparency mandate in and of itself has been a challenge*. Expanding hospitals’ burdens further with mandates floated in this Proposal document language is quite concerning. We do not believe that the options being deliberated could be effectively implemented without considerable fact-finding, industry input, and government effort. We believe that the basics of Hospital Information System complexity, pricing challenges, insurance contracting, reimbursement reductions, and uncontrollable costs (devices, drugs, supplies, etc.) need to be discussed in an open forum with CMS clearly understanding the true challenges hospitals face.

(*CMS’ lack of transmittal guidance and use of randomly posted “FAQ” documents caused significant market confusion on the Charge Master publication requirements. Hospitals, associations, consultants and vendors spent countless hours debating the possible meaning of the limited language and many erroneous assumptions were made. We feel that any additional mandates related Price Transparency require that CMS revisit it’s methods and quality of communications, data specifications, and enforcement intentions.)

We believe that implementing a government-sponsored combined pricing and quality publication methodology could likely be viewed incorrectly by the average shopper. We think that prices and quality data could be easily misunderstood due to the acuity and complexity of the providers’ typical patients. We are also concerned that quality and pricing comparisons could be used in a highly negatively manner by press or watchdog groups. Instead of resulting in better quality and lower prices, we believe hospitals would simply be forced to invest time, effort and cost to defend their practices. Once again, the administrative burden that would be created to operate in such a highly competitive marketing environment will layer time commitments and costs on finance departments that even today are understaffed.

Increased consumer demand, aligned incentives, more accessible and digestible information, and the evolution of price transparency tools are critical components to moving to a health care system that pays for value. However, the complex and decentralized nature of how price information is created, structured, formatted, and stored presents many challenges to achieving price transparency. To this point, pricing within health care demands a market-based approach whereby, for example, platforms are created that utilize raw data to provide consumers with digestible price information through their preferred medium.

Comments: As suggested above, if new approaches are established for transparency, they must not impose significant administrative burden for providers. The paragraph above hints at a desire to change charging practices for the Nation’s hospitals. Current Hospital Information System platforms (from all departments and functions) may have to be redesigned to change pricing structure or reported data. In our experience, maintenance of charging masterfiles is already poor in many organizations. Expecting redevelopment of masterfiles to accommodate even more payer-specific contract information would most likely lead to overwhelmingly complex and challenging masterfile maintenance. This could uproot many hospitals’ now-effective quality monitoring processes for Charge Master accuracy.

We strongly encourage development of methods of out of pocket estimations without mandating large scale changes to hospital charge practices or masterfiles.

Comments: Regarding the statement: “To this point, pricing within health care demands a market-based approach whereby, for example, platforms are created that utilize raw data to provide consumers with digestible price information through their preferred medium.” We question whether the cost that will be invested by CMS to develop such platforms is a good use of our taxpayer dollars. Too often, we’ve seen investment new platforms and mandated reporting requirements that are determined to be ‘unnecessary’ after a few short years (for example, the burdensome ‘functional reporting’ requirements for rehab services). Without overall reform of hospital pricing through standardized charge protocols or establishing pricing limits, we don’t believe that publication of disparate data is the solution.

CMS already provides historic claims based data through its standard analytical files. Rather than trying to change hospitals’ charge methodology with prospectively-established, we believe that CMS could simply make the SAF data more openly-available, standardized thorough all of its data sources, and more timely.  

ONC has a unique role in setting the stage for such future actions by establishing the framework to prevent the blocking of price information. Given that price information impacts the ability of patients to shop for and make decisions about their care, we seek comment on the parameters and implications of including price information within the scope of EHI for purposes of information blocking. In addition, the overall Department seeks comment on the technical, operational, legal, cultural, environmental and other challenges to creating price transparency within health care.

  • Should prices that are included in EHI:
    • Reflect the amount to be charged to and paid for by the patient’s health plan (if the patient is insured) and the amount to be charged to and collected from the patient (as permitted by the provider’s agreement with the patient’s health plan), including for drugs or medical devices;
      • Comments: While having knowledge of the patient’s individual out of pocket costs is ideal, we believe that out of pocket cost estimates are a function that could be provided by the insurance plan for any insured patient based on the terms negotiated with the hospital provider. In the long run, we believe knowing up front what out of pocket costs are anticipated would discourage patients from selecting plans with excessive deductibles and coinsurance burdens that have proliferated. In tandem with better out of pocket estimations and potentially controlling provider pricing, we believe that healthcare insurors plans should have greater clarity, plan options, and transparency so consumers can make better financial choices. Placing the burden on hospitals and the government to accumulate, develop, and display individual patients specific insurance plan information seems overwhelmingly complex. We think the insurance plans can solve much of the transparency challenge with the data, tools and information already housed in their actuarial data and information systems. 
      • We do believe, however, that uninsured patients should most definitely have the opportunity to know their out of pocket costs in advance of most elective procedures or planned care. This subset of the population should be allowed to enter into a business relationship with their hospital provider in a transparent and fair manner. Much of this effort has already been accomplished by hospitals in their internal policies. We believe that setting limits on the financial burden that the uninsured must carry for their medical care is a better solution than developing a large-scale transparency platform for prospectively-established hospital pricing for the entire patient population.
    • Include various pricing information such as charge master price, negotiated prices, pricing based on CPT codes or DRGs, bundled prices, and price to payer;
      • Comments: Expanding the already less-than-effective publication of the Charge Master to include additional data as noted above would be a significant administrative burden for hospitals. Publication of CPT codes, Revenue Codes, Dental codes or other data that has been claimed to be proprietary further exacerbates the hospitals’ already significant (and often redundant) data licensing costs. If CMS intends to require publication of data that is considered proprietary, it should waive any costs to the provider and ensure vendors displaying such information on behalf of the provider are not burdened by additional cost. 
      • While the legal requirements and costs of data licensing are other topics altogether, we believe that numerous associations are profiting from the industry and causing this cost to be passed along to the patient, vendors, and insurers. In summary, if additional data elements will be mandated for publication, CMS needs to make such information free of any licensing restrictions or cost.
    • Be reasonably available in advance and at the point of sale;
      • Comments: As noted in earlier comments, we believe that prospectively setting charges (if that is what is being suggested in this language above) will undermine many hospitals’ financial stability.
      • “Point of Sale” notification of costs for a sick patient will require an additional financial interaction with the patient who may already be in a vulnerable state. Hospital admissions representatives are typically not trained, skilled or equipped to discuss with the patient the financial implications of their insurance and their expected medical care. In our experience, hospital admissions department and financial counseling staff are already overburdened. This added responsibility will cause healthcare operations costs to soar as new and differently-trained staff would have to be hired to accomplish this notification requirement.
      • We are also concerned that point of sale notification could also lead patients to make clinical decisions about their medical care simply due to the financial ramifications. Adding further emotional stress on the patient and their family in the hospital environment would create a negative environment for all involved. We believe point of sale estimates only make sense for elective services and when provided well in advance of the patient’s admission or encounter.
    • Reflect all out-of-pocket costs such as deductibles, copayments and coinsurance (for insured patients);
      • Comments: Again, because of the high variability in insurance plans nationwide, we believe that this should be the insurance plan’s responsibility, not the requirement of the hospital provider or CMS. 
      • We believe that good cost estimation software (for hospitals that use quality software solutions) already solves this challenge.
    • Include a reference price as a comparison tool such as the Medicare rate and, if so, what is the most meaningful reference
      • Comments: Medicare reimbursement rates do not offer, in our view, reasonable comparisons to hospital pricing. Showing the rate Medicare pays will simply cause patient confusion and suspicion of the hospital’s pricing fairness. Hospitals with true procedure-level cost knowledge resoundingly share that Medicare reimbursement doesn’t come close to covering their current costs.
        • Additionally, the Medicare rate to be used would need to be well-understood. OPPS, MPFS, Local or Wage-Adjusted Rates, National Rates, all need to be defined. This may be challenging in a complex hospital environment with multiple provider settings.
        • With the large volume of packaging in the OPPS payment system, many services and items would have no comparative reimbursement value. Such rates, in our view, are comparing ‘apples to oranges’.
        • Critical Access Hospitals’ use of comparative reimbursement rates is another challenge since OPPS is not applicable.
      • The conundrum of hospital pricing is that limited hospitals know their actual itemized costs. Without true cost based pricing methodology, prices will continue to be wildly variable throughout the industry. The most meaningful reference would be a well-developed, accurate cost database and possible limitations on mark ups once procedure-based cost estimates are well-vetted by the industry.
  • For the purpose of informing referrals for additional care and prescriptions, should future rulemaking by the Department require health IT developers to include in their platforms a mechanism for patients to see price information, and for health care providers to have access to price information, tailored to an individual patient, integrated into the practice or clinical workflow through APIs ?
    • Comments: We believe these suggestions will only increase the already-excessive costs of today’s HIS platforms. The large vendors over the past decades have increased their licensing fees and implementation costs to the point of being one of a hospital’s largest operating expenditures. Expecting the vendors to not pass this burden on to the client would be short sighted.
  • To the extent that patients have a right to price information within a reasonable time in advance of care, how would such reasonableness be defined for:
    • Scheduled care, including how far in advance should such pricing be available for patients still shopping for care, in addition to those who have already scheduled care;
    • Emergency care, including how and when transparent prices should be disclosed to patients and what sort of exceptions might be appropriate, such as for patients in need of immediate stabilization;
    • Ambulance services, including air ambulance services; and
    • Unscheduled inpatient care, such as admissions subsequent to an emergency visit?
  • How would price information vary based on the type of health insurance and/or payment structure being utilized, and what, if any, challenges would such variation create to identifying the price information that should be made available for access, exchange, or use?
    • Comments: Price information variance based on the type of insurance or payment methodology is commonly due to a difference in codes and code structure that is being required. Despite HIPAA standards, there is still some variance.
      • Code sets and code reporting requirements must be standardized with no allowed ‘grandfathering’ of historic code sets, or override codes allowed by any payer.
      • The fact that some state Medicaid programs still utilize codes that are either not current to the national quarterly code sets, or unique codes not included in the HIPAA Transaction Code set is an ongoing burden for hospitals. Fullytransitioning to one outpatient coding version for all payers is essential for simplifying charging data and clarity for the patient.
      • When code structure changes for CPT-4 or HCPCS Level II coded charge items, or when CMS requires alternative HCPCS Level II coding over CPT, there is also a challenge of charge structure consistency. Trying to stay current with codes and charge structure is a constant challenge for hospitals. Trying to document and publicize all payers’ unique codes and coding structure rather than using Medicare is a standard would be a huge undertaking.
  • Are there electronic mechanisms/processes available for providing price information to patients who are not registered (i.e., not in the provider system) when they try to get price information?
    • Comments: State publication requirements (where utilized), publication of Charge Master files and DRG information, and robust patient out of pocket cost estimator software appear to all be options for the patient represented in the item above.
  • Should price information be made available on public web sites so that patients can shop for care without having to contact individual providers, and if so, who should be responsible for posting such information? Additionally, how would the public posting of pricing information through API technology help advance market competition and the ability of patients to shop for care?
    • Comments: Unless price estimation software is mandated and certified to meet accuracy standards retrospectively, we don’t believe that publishing prices in the form of price lists or Charge Master files is helpful. Our survey of hospital compliance with the current 2019 publication requirements demonstrated that:
      • Public Web Site location of pricing files vary dramatically and are often buried deep within the websites
      • Many hospitals failed to follow the CMS technical publication requirements
      • Terms in the language such as “machine readable” and “standard charges” confused and continue to confuse many providers
  • If price information that includes a provider’s negotiated rates for all plans and the rates for the uninsured were to be required to be posted on a public web site, is there technology currently available or that could be easily developed to translate that data into a useful format for individuals? Are there existing standards and code sets that would facilitate such transmission and translation? To the extent that some data standards are lacking in this regard, could developers make use of unstandardized data?
    • Comments: Charge Master data that is not standardized will create excessive costs for software development. As a vendor, we already experience challenges with diverse data structure and formats from many data sources. We also have seen a wide variety in the ways hospitals charge for different items and services. We have concerns that hospital charges used and displayed by a variety of vendors could be incorrectly aggregated, leading to incorrect price estimates or patient assumptions.
    • We also have concerns about the currency of such data:
      • Negotiated insurance rates would need to be modified and hospital charges updated as they are modified. These events occur throughout the year and are not simply annual updates.
      • When code structure changes for CPT-4 coded items, or when CMS requires alternative HCPCS Level II coding over CPT, there is also a challenge of charge structure consistency. Trying to stay current with codes and charge structure will be a challenge for a price transparency effort that includes financial commitments and true patient estimates.
      • The fact that some state Medicaid programs still utilize codes that are either not current to the national quarterly code sets, or unique codes is an ongoing burden for hospitals. Fully transitioning to one coding version for all payers is essential for simplifying charging data.
    • If CMS determines that publication of prices is essential, we believe that the many types of different hospital charges will need mandated standardization to some degree. CMS has been silent on many topics that leave hospitals unsure about ‘what they can charge for’. Achieving charge transition to national standards should be communicated well in advance of effective dates through clear and specific regulatory guidance by CMS. Such important information must be well-documented in Transmittals and manualized in the applicable Medicare Manuals so hospitals are clear on any changes to charge structure that is needed. The bullet points below discuss some of our major concerns for achieving charge standardization:
  • Ancillary procedures represented by CPT-4 codes seem straightforward, but some charge types have unique nuances that make comparison shopping difficult:
    • Laboratory charges represented by CPT-4 codes would be a reasonable starting point, and are one of the easier services to comparison shop.
      • We suggest that CMS clarify that any supplies used by the laboratory or additional fees (handling, collection fees, etc.) all be clearly stated as not separately chargeable for ANY provider for ANY insurance. The variability with these policies causes discrepancies in charge practices and patient pricing.
      • Mark up of the rates from “Reference” or “Send-out” laboratory tests requires controls and specific guidelines for patient clarity.
      • The use of profiles or multiple component testing charges by reference labs leave many hospitals unclear on the multiple tests that are being charged. More specific controls and regulatory guidance on component testing pricing and fees are needed so not only are hospitals transparent for the patient’s benefit, but their reference labs are as well.
      • The use of different coding/charging practices by some payers for molecular lab (e.g. ‘stacking codes’) creates challenges and needs to be consistent.
    • Time-based services such as many of the rehabilitative services codes would be difficult for the patient to compare against as they typically don’t know the amount of time the therapist will require for their encounter. However, reporting in the same time structure as the current-quarter CPT-4 coding would need to be mandated for all insurances including Workers’ Compensation insurances that are often many years behind with their mandated code sets.
    • Imaging, Cardiac Catheterization Laboratory, and other diagnostic procedures often have supply costs or additional fees charged in addition to the procedures. Also, there are often additional component codes that report the surgical interventions. This variability can lead to a great deal of confusion when a patient is comparison shopping.
      • We support a transition fully toward procedure code packaging (and away from component codes for Interventional Radiology and other interventional services in the CPT-4 code set. This will take some time since often, code changes are driven by RUC and MFPS deliberations.
      • Until there are mandated standard charge structures and well-publicized code combination standards, we don’t believe these areas can be effectively compared by price shoppers.
      • CMS needs to provide code pair lists quarterly as code sets change and not simply require providers to read guidelines and parenthetical notations within coding references.
      • Guidance for charging or not charging for additional services or items provided in the course of the diagnostic procedure is essential, and has continued to be a grey area for may providers. This includes prep time, post op recovery in a recovery room, “level II” or “step down” recovery, supplies, implanted items, drugs used in the procedure, and more. All potential charge components like these need to be defined for a reasonable price comparison.  
    • Clinical Services such as bedside procedures or outpatient nurse-performed procedures currently have wide variability in charge practices, and would require standardization for the ability to comparison shop.
      • CMS would need to define whether CPT-4 codes should be assigned within the Charge Master file, the structure of the charges, and whether the service is separately chargeable or should be included in the cost of the room or visit charge. These are ambiguities that are addressed differently hospital to hospital.
    • Implanted devices that have HCPCS Level II codes could be published, but don’t seem to be valuable for the patient shopping for medical care. HCPCS Level II codes are too general for comparing devices since they are not ‘device specific’. (We do not suggest moving back to a device-specific code assignment requirement due to the excessive effort required to maintain masterfiles.)
      • The patient is often unable to understand the different implants that may be used for a procedure, and comparisons at a charge item level would only cause confusion.
      • The FDA Designated Indicator (DI) field is not implemented in most Hospital Information Systems, and not part of Charge Master files or CMS claims data. It is, however, a helpful data element to identify implantable devices. We would encourage CMS to evaluate this field’s benefits as it considers device charge standards.
      • While packaging implant costs into procedure pricing estimates is reasonable, the lack of control of use and costs of implants by the hospital provider would shift the financial burden to the hospital under prospective procedure pricing. We do not support the idea of packaging devices into prospectively established procedure prices.
    • Injectable drugs or biologicals that have HCPCS Level II codes are also difficult to comparison shop.
      • Drugs in hospital charging systems are structured and reported in different ways and in differing structures. Description standards also vary despite that HCPCS codes may have their own descriptors. For a patient to fully understand drug charges, more specificity would be necessary.
      • CMS has not mandated that all drugs have HCPCS reported.
      • The HCPCS coding system does not provide codes for every drug.
      • There is inconsistency in how drug charges are listed in Charge Master or pharmacy masterfiles due to variability in hospital information system datafile set up, system parameters, and vendor functionality.
      • Some drug charges require a billing multiplier to adjust the billed units when HCPCS are reported. Not all vendors provide this function or field, and some calculate the billing unit multiplier through internal functions. However, if this information is not considered, price comparisons hospital to hospital could be inaccurate even with HCPCS codes and consistent charge descriptors
      • Drug prices in hospital charge master files may be overridden by calculated, dynamic pricing based on cost and mark up. CMS requirement to publish the actual drug prices is in effect, but is still not enforced with any specific pricing data update requirements. 
      • “Cost” data used by hospitals for pharmacy charges varies. Mark up methodologies also vary dramatically. Enforcing a national standard of a reliable and well-vetted cost factor, and even establishing some limits on mark up tiers and percentages may allow greater comparison of drug prices for hospital charges.
    • Room & Board rates, visit charges and observation charges are difficult to compare due to the variability in charge structure and charge practices.
      • Room & Board rates are usually straightforward and well-defined by Revenue Codes and descriptors. However, some hospitals charge additional supplies and services while others package additional costs into the facility fees. Without standardized charging definitions, it would be impossible to compare the cost of an inpatient visit simply based on room rates.
      • For visit charges, since there are no E&M visit definition standards for hospitals (CPT-4 definitions have not be mandated by CMS), trying to compare clinic or ER visit charges would confuse any price-shopping patient.
        • Additionally, some hospitals package many supplies and procedures into outpatient visits and do not charge separately for certain services.
        • CMS would need to clearly define just what items and services are included in the visit charge standards and what is separately chargeable. These issues have been poorly understood for decades and are only partially addressed though very old Fiscal Intermediary transmittals and general language in the CMS Provider Reimbursement Manual.
    • Surgical procedure costs would need a standardized method of charging for reasonable price comparisons.
      • Flat-rate pricing is not only unfair to the provider for many surgery types, but also could inflate the amount the patient pays as hospitals would likely overestimate the rate to avoid losses.
      • Comparisons of time-based charging is challenging since procedure time is not easy to forecast. Hospitals also use a wide variety of time and levels of OR charges making comparisons difficult. Therefore, without standardized charge structures, there can be no realistic comparison by looking at Charge Master files.
      • Clarity on charging for prep time, anesthesia, recovery, supply, implants, drugs, sedation/anesthetic agents, and other costs would have to be defined so there is price comparison capability.
  • What technical standards currently exist or may be needed to represent price information electronically for purposes of access, exchange, and use?
    • Comments: CMS will need to define specifically where and how data should be displayed with CMS Transmittals published at least 90 days prior to effective date with any information from FAQs or Open Door Forum sessions published as Transmittal or MLN Matters updates.
    • Identify the number of web-pages deep this information should be listed from the hospital landing page.
    • Replace vague terms such as “Machine-Readable” with clear data specifications to avoid confusion.
  • Are there technical impediments experienced by stakeholders regarding price information flowing electronically?
    • Comments: Ownership of mandated data by associations and potential costs to license new data sets that may be available by the government or its agents are a significant concern.
  • Would updates to the CMS-managed HIPAA transactions standards and code sets be necessary to address the movement of price information in a standardized way?
    • Comments: As noted above, the publication, licensing restrictions and costs of certain HIPAA transactions data would need to be waived to avoid adding extensive costs to providers. If pricing data is to become transparent and more data fields become required for publication, all profit-making for HIPAA transaction code set data should be abolished.
  • How can price transparency be achieved for care delivered through value based arrangements, including at accountable care organizations, demonstrations and other risk- sharing arrangements?
  • What future requirements should the Department consider regarding the inclusion of price information in a patient’s EHI, particularly as it relates to the amount paid to a health care provider by a patient (or on behalf of a patient) as well as payment calculations for the future provision of health care to such patient?
    • Comments: We don’t believe the above-noted information should be included in the new EHI definition.
  • If price information is included in EHI, could that information be useful in subsequent rulemaking that the Department may consider in order to reduce or prevent surprise medical billing, such as requirements relating to:
    • The provision of a single bill that includes all health care providers involved in a health care service, including their network status;
    • The provision of a binding quote reasonably in advance of scheduled care (that is, nonemergent care) or some subset of scheduled care, such as for the most “shoppable” services;
    • Ensuring that all health care providers in an in-network facility charge the in-network rate; and
    • Notification of billing policies such as timely invoice dates for all providers and facilities, notwithstanding network status, due date for invoice payments by the prospective patient’s payers and out-of-pocket obligations, date when unpaid balances are referred for collections, and appeals rights and procedures for patients wishing to contest an invoice?

This ends our comments and the CMS Proposed Rule section on further price transparency considerations.

Readers – We hope our comments are helpful, and believe many hospital industry experts will agree with our positions. The only way to influence CMS on the technical and administrative burden that these new proposed rules will create is to provide commentary. Don’t wait for hospital associations to do the work for you. CMS needs to hear from providers.



Comment Submission

We welcome a dialogue on this article where posted, and want to provide the following section of the Proposed Rule that lists ways you can submit your comments to CMS for their consideration. We believe that CMS does not fully understand the administrative burden some of the proposed requirements (and items for feedback) would place upon our industry.

ADDRESSES: You may submit comments, identified by RIN 0955–AA01, by any of the following methods (please do not submit duplicate comments). Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.

  • Federal eRulemaking Portal: Follow the instructions for submitting comments. Attachments should be in Microsoft Word, Microsoft Excel, or Adobe PDF; however, we prefer Microsoft Word.
  • Regular, Express, or Overnight Mail: Department of Health and Human Services, Office of the National Coordinator for Health Information Technology, Attention: 21st Century Cures Act: Interoperability, Information Blocking, and the ONC Health IT Certification Program Proposed Rule, Mary E. Switzer Building, Mail Stop: 7033A, 330 C Street SW, Washington, DC 20201. Please submit one original and two copies….

Enhancing the Public Comment Experience: To facilitate public comment on this proposed rule, a copy will be made available in Microsoft Word format on ONC’s website ( We believe this version will make it easier for commenters to access and copy portions of the proposed rule for use in their individual comments. Additionally, a separate document (‘‘public comment template’’) will also be made available on ONC’s website ( for the public to use in providing comments on the proposed rule. This document is meant to provide the public with a simple and organized way to submit comments on proposals and respond to specific questions posed in the preamble of the proposed rule. While use of this document is entirely voluntary, we encourage commenters to consider using the document in lieu of unstructured comments, or to use it as an addendum to narrative cover pages. We believe that use of the document may facilitate our review and understanding of the comments received. The public comment template will be available shortly after the proposed rule publishes in the Federal Register. This short delay will permit the appropriate citation in the public comment template to pages of the published version of the proposed rule.

To read more about Price Transparency, see:
CDM Transparency 1Q19 Update
CDM Transparency – more speculation & more confusion
CMS’ FAQ Price Transparency Requirements for Hospitals
What your Shopping Public Needs to Know
IPPS CDM Announcement: Tips for Hospital Action Plans

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