How Price Transparency May Look Like In 2023?

Since its inception in 2018, ZeaHealth has existed to support healthcare equity, price transparency, and improve care quality. We tirelessly work daily to empower patients with transparent pricing data and hospitals and insurance companies with compliance and CMS-required format of their pricing data. Yet, behind all the effort and toil, we have only one aim- To make high-value and low-cost care available to American citizens.

Ten days to go for the year 2023, and another significant year will end. It will mark the end of two years of CMS's hospital price transparency mandate. At ZeaHealth, we are all set to welcome 2023 with a positive approach toward price transparency. First, however, I can't resist reflecting on the year, the challenges of price transparency so far, and the next steps. 

Price Transparency Legislations

Multiple regulations have been passed to make the price transparency ecosystem a reality. 

• The Hospital Price Transparency Final Rule
• The No Surprises Act.
• The Transparency In Coverage Final Rule.

On January 1, 2021, the hospital price transparency rule laid a solid foundation for price transparency in healthcare. Hospitals were mandated to post items, services, and service packages of charge master and 300 shoppable services in a machine-readable format or an estimator tool instead of a machine-readable file. In July 2022, insurance and health plans were mandated to post negotiated prices of in-network providers, out-of-network charges, and allowable amounts. 

The No Surprises Act, effective from January 1, 2022, addresses large surprise bills that patients receive weeks later for emergency or out-of-network care. The mandate was a great relief for Americans as it protected them from excessive shocking medical bills.

The Consolidated Appropriations Act of 2021 (CAA) established consumer protections related to surprise billing and transparency in health care.

Effective July 1, 2022, the Transparency in Coverage (TiC) mandated insurance companies to post their negotiated rates in a defined format for machine-readable format. In addition, the rule made insurers responsible for price transparency. 

Two years after the price transparency rule, everyone has the question- how efficacious are the price transparency mandates? Are hospitals complying with the regulations? Are the consumers benefiting from the price transparency rule?

As a futuristic health startup devoted to bringing complete price transparency, ZeaHealth has gathered data and researched how many hospitals are compliant. 

We first published our Price transparency compliance report in 2021, analyzing 5139 hospitals in the USA. We found that 1686 (33%) hospitals were compliant while 3453 (67%) were non-compliant. 

The initial phase of the price transparency ecosystem has been slow due to continued resistance from hospitals. According to the JAMA network, fewer than 6 percent of hospitals published their prices between July and September as required by the CMS government. 

But, the continued push from CMS in the form of increasing penalties led more hospitals to disclose their prices. Hospitals that do not comply will be penalized up to $300/day for hospitals with 30 beds, and hospitals above 30 will be charged $10/bed/day, not exceeding $5500/ day. As of June 2022, according to Health Affairs, CMS has issued 352 warning notices, and 157 corrective action plan requests to hospitals. 

In addition, the CMS penalized the first two hospitals in Georgia with Civil Monetary Penalty (CMP) for non-compliance. The penalty includes violations for 2021 and 2022.

• Northside Hospital Atlanta $883180
• Northside Hospital Cherokee $214320 

With continued effort from CMS and private enterprises like ZeaHealth working towards price transparency, positive progress is now evident. Many large and smaller hospitals are now complying with the price transparency mandate and publishing their pricing data. It is a sign that we are moving forward in the right direction- towards the era of a shoppable healthcare system. 

Lessons Learned So Far

ZeaHealth has been actively working on price transparency and lowering healthcare costs before the ruling became official. After four years in the domain and two years after the mandates went into effect, we have learned many lessons. 

1. Price transparency is slow because hospitals and insurance companies want to keep their negotiated prices private. Instead, they would prefer paying fines than disclosing their prices and letting go of the competitive advantage. 
2. Even if the hospitals are complying, the pricing data they publish needs to be more consistent and according to the CMS-required format.  
3. Similar to payer data, there is a need for a specified format for hospital data which will likely push more hospitals to comply. 
4. Many hospitals are willing to comply but still need to comprehend CMS requirements for compliance. 
5. The complex chargemaster is a significant hindrance in compliance as hospitals need help to gather the scattered data into the CMS-required format. 76% of hospital leaders expressed concerns that they cannot extract data from their legacy systems. 
6. Patients or consumers need help understanding the complex pricing data and want to avoid terabytes of data. They need simple technology to see the prices for the care services, like APIs that make it easy for patients to download the data. Hospitals and insurers must make these APIs available for consumers.

Every new reform or innovation takes time. But with further CMS actions and support from private health tech organizations, more hospitals and insurance companies will be able to comply. 

What Steps can accelerate the Price Transparency pace?

Price Transparency is a combined effort, and all stakeholders must work together to make it a reality. 

• CMS can make more strict regulations or increase the fines and penalize more hospitals for non-compliance. 
• Healthcare providers can collaborate with their network hospitals to deliver consumer pricing information efficiently.
• Technology companies can make innovative software and applications to make compliance and publishing prices easier for care providers.
• Media can promote price transparency and educate consumers about its significance. 
• State legislation can create supportive laws to promote federal price transparency laws. 

Price Transparency in 2023

Ryan Howells, Principal at Leavitt Partners, spoke positively about the future of price transparency and backed it with a powerful use case we all have witnessed. 

"You've got Uber and Lyft and Airbnb and all these companies that have… sprouted up because of the ability to empower individuals with access to their data…I think you're going to see that more and more," said Howells. 

So the key to succeeding in the market is to empower consumers. Hospitals and insurers need to think of price transparency through this lens. With transparent pricing data of their services, they can deliver what patients demand, empower them to shop for the care they seek, and earn their trust. 

ZeaHealth is all prepared and willing to support more hospitals and insurance companies to comply. ZeaTool- our AI-powered compliance engine can convert the complex chargemaster and their negotiated pricing data into a machine-readable and consumer-friendly format within hours. The employers will be equipped to use ZeaData to negotiate contracts with hospitals.

The year 2023 will bring positive advancements in healthcare price transparency. There will be fewer price variations, and comparing prices for healthcare like apples to apples will be possible. Knowing the healthcare prices in advance and shopping for care will be simple and convenient for all. Patients will be able to make informed healthcare decisions. 

What's New in 2023?

The insurance companies should provide the 500 shoppable services through an estimator tool.