A health price transparency vendor can provide many advantages for your practice. It can help you become more competitive and also ensure compliance with the No Surprises Act and other regulations.
Read on to learn more about healthcare price transparency companies and the need for price transparency organizations in healthcare. We'll also cover the benefits, challenges, and costs of using healthcare price transparency companies.
What is Healthcare Price Transparency?
The Association of American Medical Colleges defines price transparency as the readily available information on healthcare service prices that, along with other data, define the value of such services.
Price transparency plays a vital role in the healthcare industry by allowing customers to make informed healthcare choices ahead of time. It also helps healthcare providers offer improved customer experiences and ensure compliance with the No Surprises Act, among other advantages.
The Need for Price Transparency Organizations in Healthcare
Healthcare organizations require price transparency for two main reasons.
High-deductible health plans are becoming more common
Healthcare costs have risen over the past decade. This is reflected in the skyrocketing rate of high-deductible health plan purchases. HDHPs are health insurance plans with large deductibles for medical expenses and lower monthly premiums. According to a KFF report, the percentage of people enrolled in HDHPs has increased from 17% in 2011 to 28% in 2021.
While HDHP plans help patients save on monthly premium costs, they are gambling on not having any other health issues or emergencies. Patients often choose HDHPs because they are unfamiliar with the costs of healthcare, which affects their ability to choose insurance that fits their needs. Many consumers are also largely uninformed about what counts toward a deductible and what services are covered at all.
Price transparency can decrease the number of people choosing HDHP plans by giving patients a clearer idea of how much they must pay ahead of time. This allows them to make better healthcare choices. Instead of choosing an HDHP plan that might not be able to help them in case of a health emergency, they can select another healthcare plan that may have higher premiums but gives them better future support.
Price transparency is now the law in healthcare for some situations
Price transparency is now the law thanks to the following regulations.
No Surprises Act and Good Faith Estimates
The No Surprises Act came into effect on Jan. 1, 2022. It promotes price transparency for patients by requiring healthcare providers to give comprehensive good faith estimates of charges for items and services provided to self-paying and uninsured patients.
GFEs are notices that outline self-paying or uninsured individuals' expected charges for a scheduled or requested item or service. GFEs include detailed information about the services and items reasonably expected to be provided to the patient, including:
- The patient's name and date of birth
- Description of the primary item or service
- A list of the following:
- Services and items reasonably expected to be provided for the primary service or item, including prescription drugs, medical tests, and facility fees.
- Services and items reasonably expected to be provided by co-providers and co-facilities.
- Services and items reasonably expected to be provided along with the primary item or service for that specific period of care.
- Applicable diagnosis codes, expected service codes, and expected changes associated with each listed item or service
- Name, National Provider Identifier, and Tax Identification Number of each provider or facility in the GFE
- A list of items and services that may require separate scheduling and are expected to happen before or after the expected period of care for the primary item or service
Related: See our outline of GFE requirements.
Who does the No Surprises Act apply to?
The No Surprises Act applies to every healthcare institution licensed under applicable state or local law as a healthcare facility. These include:
- Critical access hospitals
- Laboratory centers
- Imaging centers
- Ambulatory surgical centers
- Rural health centers
- Federally qualified health centers
- Hospital outpatient departments
How to determine whether someone needs a GFE
You can determine whether someone needs a GFE by asking if they are enrolled in the following:
- A group health plan
- A Federal healthcare program
- A health benefits plan under a Federal Employees Health Benefits (FEHB) Program
- A group or individual health insurance coverage provided by a health insurance issuer
If the patient is not enrolled in any of the above, they are considered uninsured by the No Surprises Act, and you must give them a GFE. However, if the individual is enrolled in one of these, you must ask whether they are submitting a claim. If they are not, the individual is self-paying and must receive a GFE.
Hospital price transparency
According to the Hospital Price Transparency Rule, starting Jan. 1, 2021, each hospital in the United States must provide accessible and transparent pricing data online about the services and items they provide in two ways:
- In a consumer-friendly display of shoppable services
- As a detailed machine-readable file with all services and items
This information makes it easier for healthcare consumers to compare and contrast prices across hospitals and estimate care costs before going to a hospital.
Failure to comply with the Hospital Price Transparency Rule will result in a fine of $300 per day for hospitals with 30 or fewer beds. Hospitals with over 30 beds will receive a penalty of $10 per bed per day, not to exceed a maximum daily amount of $5,500. Under this rule, the minimum and maximum penalty for a full calendar year of noncompliance would be $109,500 and $2,007,500 per hospital, respectively.
Transparency in coverage
The Transparency in Coverage Final Rule requires health insurance companies to publish prices for covered services and items in a publicly accessible place, allowing consumers to compare and contrast easily. To comply with this rule, health insurance companies must disclose cost-sharing data via:
- Machine-readable files: These files must display out-of-network allowed amounts, in-network rates, and prescription drug pricing. They must be published on a publicly available site.
- A web-based self-service tool: This web-based tool will include real-time, personalized, out-of-pocket price estimates for covered items and services. Paper versions must be available upon request. For plans starting on or after Jan. 1, 2023, the web-based tool must provide cost-share estimates for 500 commonly shoppable services and items. For plans beginning Jan. 1, 2024, the web-based tool must provide cost-share estimates for all covered services.
Penalties for failing to comply with the Transparency in Coverage rule have yet to be announced. However, experts predict noncompliance may result in monetary penalties of up to $100 per day per violation.
Healthcare Price Transparency Companies
Now that you understand the need for healthcare price transparency, let's explore how healthcare price transparency companies work.
How they operate
Healthcare price transparency companies can provide price transparency by using state-of-the-art tech to gather and present relevant healthcare price information to customers. They can also:
- Use technology to comply with the No Surprises Act, the Hospital Price Transparency rule, and the Transparency in Coverage rule.
- Educate your staff on how to respond to patient questions about healthcare costs.
- Develop new ways to effectively present healthcare price information to customers, such as itemizing bills to give patients a clearer understanding of how services are broken down.
Types of services offered
Most vendors provide the following services.
Patient cost estimate software
Healthcare price transparency companies use patient cost estimate software to project patients' out-of-pocket costs with a high degree of accuracy. They also use these programs to automatically send GFEs through letter, text, and email and comply with the No Surprises Act.
Real-time eligibility verification
Healthcare price transparency companies also provide real-time eligibility verification. They use software to determine a patient's current insurance coverage. Real-time eligibility verification allows for more effective and efficient use of healthcare resources and improved customer service.
No Surprises Act compliance and Good Faith Estimates automation
Finally, healthcare price transparency vendors can use software to generate and send good faith estimates that comply with the No Surprises Act. This will help you avoid the No Surprises Act's penalties for noncompliance.
Benefits of Using Healthcare Price Transparency Companies
There are many benefits of using healthcare price transparency companies.
Become more competitive in your market
First, healthcare price transparency companies can help you become more competitive. That's because most healthcare providers still do not provide price estimates ahead of services. According to PYMNTS, only 30% of patients had received a price estimate ahead of services in 2022.
Patients also prefer transparent healthcare providers. A Deloitte study has revealed that patients are 60% likelier to choose a provider who is transparent with prices compared to local providers.
Ensure compliance with the No Surprises Act and Good Faith Estimates regulations
Providers that fail to comply with the No Surprises Act can be fined up to $10,000 per violation, while insurers can be fined $100 per day for noncompliance. Healthcare price transparency vendors can help you comply with the No Surprises Act and avoid these fines.
Deliver a superior patient experience
Besides ensuring compliance, healthcare price transparency companies can also help you deliver rich patient experiences.
A study by Experian and PYMNTS found that only 78% of patients who received no estimate were satisfied with their provider, while 88% of patients who did receive an estimate were satisfied.
Accelerate your revenue cycle
If your revenue cycle isn't moving fast enough, healthcare price transparency vendors can help. They can use patient cost estimate tools to generate and send cost estimates to patients, which can encourage patients to pay ahead of time.
Case in point: a January 2022 PYMNTS report found 89% of patients surveyed indicated it's easy to pay upfront when they know their bill beforehand. After implementing a policy where 100% of patients received price estimates, the Health First health system in Florida increased its upfront collections by 27% and reached 2.7% of net revenue in upfront collection compared to the industry average of .7%. Similarly, the clinical testing company Counsyl increased upfront collections from patients by 63% after adopting a price estimate tool.
Challenges of Implementing Healthcare Price Transparency
As you can see, healthcare price transparency businesses provide many benefits. However, as with all things, they also present challenges that require a sophisticated partner to assist in implementing.
Lack of comprehensive data
Obtaining comprehensive and accurate data on the prices of healthcare services can be challenging, especially if your healthcare privacy transparency company doesn't hire experienced staff or use the right software. If your chosen company's patient cost estimate and GFE automation programs provide inaccurate estimations, its usefulness will be limited.
Picking the right healthcare price transparency partner is vital to getting the results you paid for and avoiding fines for noncompliance with the No Surprises Act.
Potential for misuse or misinterpretation of data
If you don't have the time, knowledge, experience, or personnel to interpret and use healthcare price data properly, you may misunderstand or make false assumptions about the prices of healthcare services.
You could fail to provide accurate GFEs for uninsured and self-paying patients, leading to steep fines of up to $10,000 per violation (for providers) and $100 per day (for insurers). You may also suffer other consequences, such as high consumer turnover rates, negative customer reviews, and a slower revenue cycle.
The Cost of Price Transparency Vendors in Healthcare
The cost of hiring price transparency vendors varies depending on volume of patient encounters and specific features needed. Generally speaking, large healthcare systems pay more due to high volume of encounters, while smaller practices seeing fewer patients will experience lower costs.
MD Clarity: A Price Transparency Company Operating Since 2010
Finding a suitable price transparency company can be an uphill battle, especially if you've never looked for one before.
If you don't know where to start, consider partnering with MD Clarity, a price transparency company that has operated since 2010. We offer a powerful price transparency solution for healthcare providers called Clarity Flow, which features real-time eligibility verification and can automatically generate price estimates for all patients.
Clarity Flow is also used by healthcare organizations to comply with the No Surprises Act and generate good faith estimates for self-paying and uninsured patients. It can auto-send GFEs via email, letter, or text and allows patients to pay directly from the estimate.
Interested in seeing how Clarity Flow can help you? Book a demo today.