Our Price Transparency Scorecard

In the Spring of 2022, we launched the beta version of our Price Transparency Scorecard. The scorecard assessed the completeness of machine-readable files (MRF) for thousands of US hospitals.

Before launching the beta version, we went through countless iterations of our initial scoring methodology. Ultimately, we landed on using over sixty pieces of information to evaluate a hospital's MRF on a 1-to-5-star rating system. Scoring is algorithm-driven, with no preferences given to any hospital. While those sixty pieces of information have not changed, we’ve built additional checks and balances for different hospital types and more nuanced MRF scenarios. Read on to find out more!

The TLDR of it all: allow us to apply some nuance to The Nuance.

Scoring By Cohort, Means Scoring Systems By Cohort

A fun fact when building a beta version of a Price Transparency Scorecard: not all hospitals are created equal. For example, short-term acute hospitals and psychiatric hospitals differ quite a lot in the number of services offered and the ways in which those treatments are reimbursed.

With this in mind, we focused on updating our methodology for psychiatric and rehabilitation centers. The beta scorecard criteria were built, in part, to look for a wide array of services that you might find at an acute care hospital. That high denominator led to scores that skewed on the low end of the 1-5 scale. In addition, these types of hospitals often use single case-rate reimbursement methodology with payers, which does not lend to having standard negotiated rates. So, a separate, more nuanced scoring methodology was needed.

A quick anecdote about the minutiae of doing what we do--while going through each psychiatric and rehabilitation file, we noticed that many of them put their most relevant revenue codes and rates in their shoppable services file[1]. Technically, CMS would define those as standard charges, ergo, they should have been in each organization’s standard charges files and not the shoppable services files. It became clear the rate data was available but in the incorrect file. We believe these organizations are doing their best to adhere to the mandates, and ideally, if notified, moving charges to the correct file would be a relatively easy fix. So, we created scoring methodologies that accommodate common mistakes without reducing scores for errors that do not affect data completeness. Alongside a review of the scorecard, we also share these findings with hospitals in the hopes they’ll correct the mistakes and move to a more compliant and complete state.

Anyyyways, to create the new scoring, we narrowed the criteria more specifically to the range of services typically found at psychiatric and rehabilitation hospitals.

A narrowed scoring methodology results in a narrowed scoring visual. Gone are the counts of CPTs and HCPCS, and instead the emphasis is placed on overall charge records with their corresponding list, cash, and negotiated rates. This also better highlights areas we recommend for improvement.

Completeness Will Get You Everywhere

If we’ve said it before, we’ll say it 100 more times: only CMS can assess whether an MRF is compliant. The Price Transparency Scorecard focuses on the completeness of the files, and we believe completeness has a positive correlation with good faith efforts to act compliantly. If MRFs are missing what we consider to be crucial elements, regardless of the rest of the file contents, it will not score 5 stars. These rules result in some hospitals dropping their beta version 5-star score--meaning the updates correctly identify hospitals without complete MRFs.

So is this Better or Best?

We’ll reiterate that we don’t dub anyone “compliant” because we are not the government-appointed entity with the power to do that. We have never, and likely will never, be able to do that[2]. The spirit of all the Final Rules related to price transparency is in the name: transparency. We want to eliminate the financial complexity of healthcare. To do so, we need a single, accurate source of truth regarding the cost of healthcare. This new scoring method allows us to highlight the most meaningful transparency efforts. If we gave an organization 5 stars just because they had a massive file, but that file was missing all negotiated rates, it would be the definition of incomplete. That would make our scorecard an entirely superficial method for gauging transparency in healthcare. No bueno.

Instead, we’ve opted for the less sexy but much more useful Better. It is better to critically examine transparency efforts: our own internal efforts and the efforts of the entire healthcare industry. It is better to look at how healthcare is adopting price transparency and adjust our methods of acknowledging their efforts accordingly. This also ensures our database is as complete as possible. Just because a rate was in the wrong spot doesn’t make it unusable. We strive for Best, but that doesn’t mean we won’t continue to shout out the Better in the meantime.

[1] This happens often and is likely a result of many organizations working with the same machine-readable file vendor.

[2] TQ Legal Eagle Dan would really like to stress that we are not and cannot in any way issue statements of compliance, kthnxbye.