On July 1st, the next stage of pricing transparency from CMS takes effect in the form of Transparency in Coverage. This rule repeats the formula that started with hospitals in 2021 and requires payers to disclose their pricing in a machine-readable file (MRF). They will be required to list the pricing they have paid anyone they do business with including hospitals, ASCs, imaging centers, labs, etc.
This is of particular interest to ASCs and imaging centers, aka those who are caught in a catch-22. Unlike hospitals and payers, who posted their own data, the pricing for any independent healthcare facility that does business with an insurance company or a self-insured employer will be made public. You just won’t have control over it.
Independent facilities have two options: take a “wait and see” approach, or claim their pricing before someone else does.
You Could Wait And See
The “wait and see” approach is built upon two assumptions, the first of which is that compliance will take time. For example, as of today, there are still around 1,500 hospitals that haven’t posted an MRF from the January 1st, 2021 deadline imposed by the Hospital Price Transparency Rule. However, there are only 1,000 payers that need publish rates, and of those, 5 account for 39% of all ASC, imaging center, and hospital pricing. The small number of insurance companies will make the road to compliance faster, and CMS has launched a clear set of expectations of how each file will be structured. In other words, it took about a year for hospital pricing transparency to take off; for payers, it could just be a few weeks.
The second assumption is that price transparency will lead to a race to the bottom in terms of pricing. Of the two, this is far more likely. When everyone’s pricing is made public, ASCs and imaging centers in tight markets will be engaged in a price-cutting race. When hospitals disclosed their pricing, they made clear how payers could save money shifting to ASCs and imaging centers. While everyone agrees that healthcare needs to become more affordable, a race to the bottom would put even more pressure on facilities that are just beginning to recover from the pandemic.
The race to the bottom only happens if you don’t do anything to clearly communicate the quality of your services. Knowing that your pricing is going to go public, the question is do you post your pricing, or do you wait for an insurance company to do it for you, without context?
Or, You Could Take Charge
Whether it’s on your own website or a marketplace like Turquoise Verified, listing your pricing proactively, and making it clear how your offerings differ is critical. After all, CPT codes don’t disclose a higher quality service (robotic surgery, well-maintained facilities, most up-to-date imaging equipment, etc). Only you can do that. Better to do it now, than in a rush after July 1st.
What to ask yourself between now and July 1st:
- When your prices go public, how do you think the competitors in your market will react?
- What distinguishes your services from the rest of your market?
- Do you have reliable access to the pricing of your competitors?
- How will you communicate these advantages to payers and patients?
- Which insurance companies do you do the most business with and how can you ensure they publish accurate rates on your behalf?
Struggling to answer some of these? Let us know and we can run through a quick legislative brief.