On
January
1,
the
Centers
for
Medicare
&
Medicaid
Services
will
begin
enforcing
new
price
transparency
requirements
for
hospitals,
including
mandates
to
post
more
detailed
information
on
the
cost
of
drugs
and
the
expected
reimbursement
amount
from
health
plans.
These
changes
seek
to
provide
more
clarity
for
patients,
but
the
experts
interviewed
for
this
article
doubt
they
will
make
much
of
a
difference
when
it
comes
to
helping
consumers
shop
for
care.
However,
they
have
optimism
that
increasing
the
amount
of
publicly
available
pricing
data
will
help
technology
companies
create
tools
that
simplify
pricing
for
patients.
One
expert
even
predicted
that
healthcare
providers
may
begin
to
adopt
a
more
demand-driven
pricing
model,
in
which
providers
set
different
prices
for
various
buyers
of
healthcare,
facilitated
by
price
transparency.
And
just
maybe,
he
thinks
there
could
be
a
future
in
which
price
transparency
leads
providers
to
contract
directly
with
employers
without
having
insurers
in
the
middle.
What
are
the
new
requirements?
There
are
three
main
changes
that
hospitals
need
to
prepare
for
come
January
1,
said
Joe
Wisniewski,
the
assistant
vice
president
of
channel
sales
at
price
transparency
software
startup
Turquoise
Health
The
first
is
that
they
need
to
post
“drug
unit
of
measurement”
and
“drug
type
of
measurement.”
This
means
that
hospitals’
price
transparency
information
will
have
to
include
how
a
medication’s
quantity
is
measured,
such
as
by
milligram
or
milliliter,
as
well
as
specify
the
format,
such
as
tablet
or
injectable.
In
other
words,
instead
of
just
listing
“Medication
A
–
$200,”
hospitals
will
need
to
specify
“Medication
A,
50
mg
vial
(injectable)
–
$200.”
“In
the
old
model,
in
theory,
I
can
post
a
truckload
of
Advil,
a
jar
of
Advil,
or
one
pill
of
Advil.
I
probably
wouldn’t
be
following
the
spirit
of
the
rule,
but
in
theory,
I
could
post
it
however
I
wanted
to
post
it,
as
long
as
that
code
was
there,”
Wisniewski
remarked.
The
second
change
hospitals
must
prepare
for
is
adding
modifiers
to
their
codes.
Modifiers
are
two-character
alphanumeric
codes
tacked
on
to
a
procedure
or
service
code
to
provide
extra
details
about
the
service
being
provided.
For
example,
the
modifiers
“LT”
and
“RT”
indicate
whether
a
procedure
was
performed
on
the
left
or
right
side
of
the
body.
Another
common
modifier
—
modifier
95
—
denotes
that
a
service
was
provided
via
telehealth,
Wisniewski
pointed
out.
The
final
new
piece
of
information
CMS
is
requiring
hospitals
to
post
is
the
“estimated
allowed
amount”
—
which
refers
to
the
anticipated
reimbursement
amount
that
a
hospital
expects
to
receive
from
a
health
plan
for
a
particular
service.
Will
these
new
requirements
help
patients?
Wisniewski
has
little
confidence
that
these
changes
will
make
a
meaningful
difference
in
Americans’
ability
to
shop
for
care.
The
average
patient
does
not
understand
what
a
modifier
is,
nor
are
they
well-equipped
to
perform
calculations
for
complex
drug
pricing
information,
he
noted.
“A
lot
of
this
is
just
getting
this
data
organized
so
that
even
industry
experts
can
understand
the
price
of
healthcare.
American
healthcare
pricing
is
just
so
complicated,”
Wisniewski
declared.
The
way
this
price
transparency
works
in
healthcare
is
utterly
different
from
other
industries,
he
added.
“The
best
analogy
I
can
give
you
is
that
shopping
for
healthcare
is
like
if
you
showed
up
at
the
car
dealership
—
and
instead
of
being
told
the
Prius
was
$35,000,
you
had
to
look
through
files
telling
you
the
seat
belts
are
300
bucks,
the
engine
is
10
grand,
and
you
have
to
sit
there
and
add
it
all
up.
That’s
an
unfair
responsibility
to
put
on
a
patient,”
Wisniewski
remarked.
Another
healthcare
expert
—
Hal
Andrews,
CEO
of
market
research
firm
Trilliant
Health
—
noted
that
CMS’
regulations
only
apply
to
hospitals,
excluding
other
settings
like
physician
offices,
urgent
care
centers
and
ambulatory
surgical
centers.
He
pointed
out
that
about
half
of
hospital
admission
arise
from
the
emergency
department.
“Absolutely
nobody
on
their
way
to
the
hospital
in
the
ambulance
checks
out
the
price
transparency
website,”
Andrews
remarked.
“So
for
half
of
the
hospital
visits
in
the
country,
price
transparency
doesn’t
matter
at
all
because
people
are
in
an
emergent
state
—
they’re
in
a
crisis.
Even
if
it
did
make
sense,
hospital
visits
are
about
10%
of
the
total
visit
volume
in
the
country.”
Essentially,
the
regulations
represent
a
drop
in
the
bucket
in
terms
of
healthcare
utilization
and
corresponding
price
transparency.
Things
are
better
than
they
used
to
be
Even
though
CMS’
new
price
transparency
requirements
are
unlikely
to
make
a
strong
impact
on
patients,
hospitals
still
need
to
take
these
new
mandates
seriously.
Another
healthcare
expert
suggested
that
hospitals
won’t
be
able
to
implement
these
changes
in
the
slow,
haphazard
way
they
have
approached
previous
price
transparency
requirements.
“The
old
logic
for
hospitals
was
to
send
over
a
machine
readable
file
that
they
were
making
messy
on
purpose.
They
just
didn’t
really
want
to
deal
with
this,
and
they
were
doing
the
bare
minimum.
I
think
that’s
going
out
the
door
—
the
market
is
moving
fast
enough
transparency
is
a
hot
enough
topic.
There’s
enough
private
equity
getting
into
this
space,
and
there
are
enough
new
companies
popping
up
that
health
systems
will
have
to
play
ball,”
said
Charlie
Byrge,
senior
vice
president
of
revenue
at
Tendo,
a
healthcare
platform
seeking
to
simplify
patients’
care
journeys.
Both
Byrge
and
Wisniewski
think
hospitals’
disclosure
of
more
detailed
billing
information
will
help
tech
companies
to
step
in
and
create
solutions
that
make
pricing
information
more
patient-friendly.
In
other
words,
the
more
healthcare
pricing
information
is
publicly
available,
the
more
companies
like
Tendo
and
Turquoise
can
develop
tools
that
truly
empower
patients.
Hospitals
are
bogged
down
with
responsibilities
related
to
patient
care
and
facility
operations
—
they
can’t
be
expected
to
translate
complex
billing
information
into
easy-to-understand
estimated
costs
all
on
their
own,
Byrge
noted.
Wisniewski
of
Turquoise
pointed
out
that
hospitals’
price
transparency
compliance
has
improved
over
the
last
couple
years.
CMS’
price
transparency
rule
went
into
effect
on
the
first
day
of
2021,
and
hospitals
had
a
difficult
time
meeting
the
requirements
for
the
first
couple
years.
A
JAMA
study
published
in
June
2022
showed
that
fewer
than
6%
of
U.S.
hospitals
were
fully
compliant
with
CMS’
rule.
But
now
most
hospitals
are
compliant
with
the
rule
—
even
after
CMS
began
enforcing
new
requirements
this
year,
such
as
the
use
of
a
CMS-mandated
template
for
hospitals’
machine-readable
files.
About
half
of
hospitals
were
able
to
meet
CMS’
latest
requirements
in
about
four
of
five
months,
Wisniewski
said.
“We’re
seeing
faster
response
times
from
both
hospitals
and
payers
to
stricter
rules,
which
means
we’re
getting
better
data
on
the
service
level
for
individual
codes.
So
if
[CMS]
can
keep
getting
them
to
post
faster
and
get
more
rates
online,
that
means
there’s
more
pricing
available
for
folks
to
start
to
bundle
it
and
make
it
accessible
to
consumers,”
he
remarked.
Hospitals’
pricing
data
may
not
be
useful
to
consumers
yet
—
but
the
fact
that
they
have
even
posted
this
information
is
a
“massive
step
forward”
given
“a
lot
of
hospitals
still
proudly
display
a
fax
number
on
their
websites,”
Wisniewski
added.
What
could
the
future
of
price
transparency
look
like?
Byrge
of
Tendo
said
that
he
thinks
hospitals
may
need
to
start
thinking
about
pricing
differently.
“I
think
health
systems
have
to
start
thinking
about
their
pricing
from
a
consumer
mindset,
rather
than
the
old
legacy
fee-for-service
type
model
that
they
do
today,”
Byrge
declared.
In
the
future,
he
envisions
a
healthcare
marketplace
where
providers
can
set
different
prices
for
different
types
of
payers
—
such
as
cash-paying
patients,
health
plans
and
employers.
He
thinks
technology
platforms
could
facilitate
this
marketplace
dynamic,
letting
patients
compare
prices
and
services
in
real-time.
This
type
of
marketplace
leads
to
bulk
purchasing,
meaning
employers
might
negotiate
with
providers
for
a
set
volume
of
services
—
such
as
a
package
of
surgeries,
wellness
visits
or
diagnostics
—
at
a
lower
rate,
Byrge
said.
He
also
predicted
that
more
health
systems
could
explore
direct
contracts
with
employers
or
patients,
bypassing
traditional
insurance
companies.
“What
we’re
hearing
in
the
market
is
that
a
lot
of
our
health
system
partners
are
frustrated
with
their
contracts
with
large
health
insurers.
They’re
going
in
and
out
of
being
in-network
with
United,
Cigna
and
Aetna,
because
they’re
constantly
fighting
over
rates
—
and
they
want
to
go
with
what
they
call
direct-to-employer
or
direct-to-patient
contracts,
which
is
100%
fueled
by
price
transparency.
If
you
have
transparency
in
the
pricing,
you
can
create
direct
contracts
directly
with
the
patient,”
Byrge
explained.
The
marketplace
model
Byrge
described
may
seem
like
a
faraway
fantasy,
but
he
thinks
this
is
the
direction
that
healthcare
pricing
needs
to
take
going
forward
—
getting
the
data
out
in
the
open
in
the
first
step.
Photo:
sorbetto,
Getty
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