How to Achieve Compliance with the Hospital Price Transparency Mandate

illustration of patient in hospital bed with price tags on various items standing next to a doctor also covered in price tags

In this blog, we’ll explore what the Hospital Price Transparency Mandate is, what it means for hospitals, and how they can become compliant by January 1st. If you’re a hospital in dire need of a solution right now, check out our PriceID solution to see how we can get you compliant in a matter of a few weeks.

What is the Hospital Price Transparency Mandate?

Hospital Price Transparency

The CMS (Centers for Medicare & Medicaid Services) and the Trump Administration have pushed forward with the new Hospital Price Transparency Mandate despite efforts to slow it down in federal court. The mandate takes effect on January 1st, 2021. The sweeping set of health transparency rules seeks to make healthcare costs and negotiated prices with insurers accessible to the public. For hospitals that are not prepared, the penalty is steep.

Across the nation healthcare providers are scrambling to prepare themselves. The world of healthcare pricing is complex, and hospitals only have a few months to make their records and prices transparent and comprehensible to the public. Having a standard charge practice is difficult even if the chargemaster is current. For healthcare organizations that are unable to ready themselves by January 1st, the fine is up to $300 each day for every non-compliant hospital.

Across the nation healthcare providers are scrambling to prepare themselves.

The comprehensive mandate has many implications, but the basic tenants of the price transparency rules can be summed up with three main requirements for hospital systems:

  1. Give consumers real-time, personalized access to cost-sharing information.
  2. Disclose the price hospitals negotiate with insurance providers.
  3. Create a list of 300 “Shoppable” Services, including 70 that are directly selected by the CMS.


What Does it Mean for Your Hospital?

Let’s go through these requirements one by one and discuss the easy way and the hard way a hospital can put themselves in a position to avoid the penalty.

Give consumers real-time, personalized access to cost-sharing information

  • What the mandate says: Hospitals and health insurance PriceID Group PsychoTherapyproviders will have to estimate the cost of various services with cost-sharing information taken into account. This information needs to be downloadable so it can be printed off and sent to potential clients at request.
  • What it actually means for healthcare systems: A hospital will need to post all prices, including the gross charges, payer-specific negotiated charges, the amount the hospital is willing to accept in cash from a patient, and the minimum and maximum negotiated charges. This means that a hospital will need to have a standard charging practice and up-to-date information on the prices, instead of the yearly chargemaster check that most hospitals currently do. Hospitals will also need to communicate with insurance providers in order to have accurate cost-sharing information ahead of time. All of this will have to be posted in a machine-readable format, meaning that potential clients can access it easily, and if they wish, download and print it off.

Disclosure of the price hospitals negotiate with insurance providers

  • PriceID Blog SleepStudyWhat the mandate says: Healthcare systems will have to post the insurers’ rates that they negotiate with health insurance companies. This posting needs to be accessible and understandable to the general public to help them choose a good health plan.
  • What it actually means for healthcare systems: Negotiating charge is a complex and continuous process, not merely a fixed number. Healthcare providers will need to adjust their negotiation process to make sure that it is current and that its many components can be read by any prospective patient. This means simplifying and explaining it in terms that the patients can understand. Hospitals will also need to be prepared for calls from irate consumers who will only see a number and may not understand the convoluted system behind the number.

Create a list of 300 “Shoppable” Services, including 70 that are directly selected by the CMS.

  • PriceID Blog Mammography ScreeningWhat the mandate says: Like an online grocery store, hospitals will be required to list 300 shoppable items, procedures, plans, and ancillary services. This “shopping list” must be readily available online and posted with a standard charge. Of the 300, the CMS will directly choose 70 that hospitals are required to include, and then they can pick and choose the remaining 230 items and services themselves.
  • What it actually means for healthcare systems:This rule seems simple on the surface, but terribly complex in actual practice. Like the others, this requirement illustrates the difficulty of having accurate, up-to-date pricing. It also sheds light on the challenge of competitive pricing. Hospital pricing transparency takes away the flexibility that exists in current pricing models. The standard charge practices that hospitals develop will now be compared by a public that does not understand the nuance of pricing. Figuring out how to competitively price will have to be a priority for every hospital.

How a Hospital Can Meet the Deadline:

The hospital price transparency rule puts a considerable burden on your healthcare system. Hospitals will need to first become self-transparent with charging practices. This means digging through the chargemaster, a system that is not readily transparent. You then need to find a way to organize, standardize, and simplify that information. Hospitals will also need to communicate clearly with the insurer to ensure that the insurance negotiated rate for every single charge is current and accurate. Finally, they will have to start thinking seriously about prices themselves. In a new world of competitive pricing transparency, how does a hospital price itself, making sure it stays competitive, but also financially sustainable.

That’s a lot to think about, but there is a way forward. As we outline how to become compliant, know that you have a choice between a hard way and an easy way.

Before we jump into the hard way… we want you to know we have a solution to help.

Check out our PriceID tool which can help you achieve hospital price transparency compliance in as little as two weeks.

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The Hard Way: Doing it on your own

A team that monitors all billing:

The first step to becoming compliant with the Hospital Transparency Mandate is putting together a team to monitor, track, and record all aspects of hospital pricing. This team will have to spend hours, days, and weeks in the chargemaster working out current prices and standardizing them across the board.

A significant part of this price standardization will be communicating with insurance providers. You will need to be able to get an accurate estimate of what percentage of each service they will cover. Alongside services they cover, remember that negotiation rates with the insurance providers will have to be reported too, so getting those worked out will have to be a priority as well.

The initial gathering of information will be a long and arduous process, but it won’t end once that information is gathered. Your team will need to stay focused on the mandate for the foreseeable future because staying compliant with the Hospital Transparency Mandate is going to be a constant battle. Once the initial pricing is locked down, finding a way to publish it will be the next step.

Developing an online interface:

Much of the mandate deals with the publication of a hospital’s pricing data. Healthcare organizations will need a way for potential clients to access, download, and compare prices between different healthcare systems. This means that hospitals need to build a web page to display the pricing information.

Working to create a website for your hospital that is both accessible and easy to use can be time-consuming and stressful. You will want to make sure that the website can help your clients find comprehensive information pertaining to the new pricing, and that all information is readily available in one location. And of course, you will have to include insurance rates and negotiation information, as well as a way to explain the reasoning behind the pricing of treatments, procedures, etc.

All of that doesn’t even include the mandated 300 “shoppable” services list. Finding a way to publish that data so it is accessible for your clients will take multiple people developing the list and editing it to ensure that the information is presented in a way that is easy to access and understand.

We know that’s a lot, and truthfully there are components of the price transparency rules that won’t be entirely covered by even these actions, but if you follow these steps, your hospital will be well on its way to compliance. However, mere obedience to the mandate is only half the battle.

Thinking about competitive pricing:

Your hospital group has now compiled all the initial pricing data, the team has communicated and received rates from insurance providers, it has picked a list of 300 services, and finally built a website that displays the data in a user-friendly format. Unfortunately, the process is still hardly over. The Hospital Price Transparency Mandate means a whole new world for healthcare systems.

The best run hospitals will be able to see this as an opportunity, not a hurdle.

Hospitals’ charges differ for a reason. Healthcare pricing is a complex web that includes many levels of nuance that are impossible to convey in a simple spreadsheet. Clients will not understand the inner-workings of healthcare pricing. But now, with the new mandate, all pricing will be readily available. Consumers might simply see a price, compare it with another hospital system’s list, and make a decision based on that. This means that building a competitive pricing strategy is paramount.

The best run hospitals will be able to see this as an opportunity, not a hurdle. Step one will be finding a price that allows your hospital to compare favorably. You will need to develop competitive intelligence. Know what your competitors are charging. Know how they are charging. What is their strategy? How are they adapting to this new transparent world? Are they compliant with the Hospital Price Transparency Mandate yet?

Answers to these questions allow you to position yourself to lead well in the new world. We recommend including not just your data on the website, but how it compares to the competitors. Don’t make it hard for clients to access data; make it easy! And when they’re looking at your healthcare system’s data, they’ll see how much better your prices are. The mistake would be to share information begrudgingly. Embrace the change with exuberance! Let the website be a testament to your commitment to price transparency and a demonstration of your hospital’s superiority to the competition.

Change is coming whether your hospital is prepared or not. There is a lot to do, and time is running low. From gathering data to figuring out how to publish prices, hospitals around the country are faced with a long, challenging, and expensive process. If this sounds like something that is out of reach for your hospital, there is another way.

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The Easy Way:

Hiring an outside company to help

The easy way is a hiring outside help with software implementation to pull and publish that data. Many hospitals already have third-party software that pulls their charging data and automates their revenue cycle. In light of the Price Transparency Ruling, many of the companies that build that software, have also designed tools to help with compliance.

The challenge of price transparency is multi-faceted. It is difficult to know your own internal charging practice. Many hospitals don’t have a standardize pricing system. It is hard to find a way to pull and publish that data. Finally, it is challenging to figure out the balance of competitive pricing and maintaining a good bottom-line.

The best software solutions will be able to help with every part of compliance, and position your healthcare system to succeed and flourish in the new world of price transparency. The only real con is that software solutions can be expensive. However, so is the penalty for not being compliant.


Of course, at Avelead we have developed our own solution. If compliance is looking like a challenge for your hospital, check out a solution we developed. We have implemented our software at hundreds of hospitals across the country, and to help with the mandate, we’ve developed another, PriceID.

Click on the link to read about or schedule a demo, and we can show you how PriceID can position you for success in the new world of price transparency.

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