For hospitals and hospital groups, the stakes for complying with the CMS’s Hospital Price Transparency Rule are getting higher. While current yearly maximum penalties for noncompliance are just $109,500, a new proposal from the Biden Administration could push them up to $2 million.
Our data can help hospitals and hospital groups avoid such penalties and benefit from the transparency of our aggregated US data.
Here, we’ll explain how to use the hospital pricing data on this website to not only ensure that your hospital is in compliance with the CMS’s rule but also to verify that the data on your site is accurate and to fuel your strategy for remaining competitive in an era of price transparency.
How to Verify that Your Data Complies with the Hospital Price Transparency Rule
One of the resources CMS has published to help hospitals comply with the Price Transparency Rule is a compliance checklist, which contains 22 questions in five categories.
We used that resource to develop a compliance score for hospitals. If your pricing data is published in a machine-readable format, as required by the rule, then we can give you your compliance score.
If you’d like to see your compliance score (which can range from 0 to 100 percent), please let us know. We’re happy to share it with you free of charge.
There are two important caveats to our compliance score:
- Guidance from CMS remains somewhat ambiguous. If and when CMS updates its guidance, those checklist items may change and so may your hospital’s compliance score. Note that all compliance scores are based on the information and guidance available at this time. We have an alerts service to update you if your score changes.
- A mistake in your data or in our capturing of the data could affect your score. In fact, one reason we encourage hospitals to review their data and compliance score on our site is to verify that the numbers publicly available are correct. Come and have a look.
How to Use Our Data to Verify that Your Published Prices Are Correct
As we’ve grown our database of pricing data, and analyzed it hospital by hospital, we’ve found that there are a significant number of price outliers. In our experience, one common reason for a serious outlier is a mistake.
We strongly encourage hospitals to review their data on our site to verify that it’s correct (i.e., that the data you’ve published and we’ve gathered matches your actual prices). We can facilitate this process by highlighting any outliers we see within your data.
What we’re finding is that, because of how we’re processing this data, we often have views of data that hospitals themselves don’t have easy access to and that these views can make potential errors stand out more readily.
We also encourage hospitals to review the data we have for them on our site to make sure we haven’t made any errors collecting and aggregating your data. As other hospitals and hospital groups gain access to this data and use it to make business decisions, it will be crucial to ensure that the data in our system accurately reflects current prices.
How to Use this Data to Guide Competitive Practices
So far, everything we’ve discussed is something hospitals and hospital groups can do for free. To access and assess your own data, see outlier prices, or get your compliance score, all you have to do is let us know you’d like to view it, and we’ll connect you.
But we’ve also structured our system so that you can view the prices of your competitors – including other hospitals in your region, in your state, with your specialties, etc. As part of our service, one of our analysts will review your data as well as that of your competitors and provide some free insights. There are three important business cases for doing this:
- Hospitals may want to know what prices their payers have negotiated with other hospitals in their region. If your payers are paying much higher rates for similar services elsewhere, why should you accept something lower? Access to this data can prove powerful in negotiation conversations, particularly if you’re among the first to see the data.
- Hospitals with access to pricing data for their region can leverage that information to more effectively market themselves. If, for example, you discover that your prices are higher across the board than your local competitors’, you may want to double down on marketing that touts your expertise, state-of-the-art facilities, and satisfaction ratings.
- You may learn that your prices on some key services are higher than median market prices. As corporations and consumers become more aware of prices, particularly for services that are optional or in CMS terms “Shoppable,” it is important to understand if reducing prices on some services will drive volume, particularly in areas where the hospital has capacity or wants to increase its footprint. For example, maybe St. Mary’s Hospital down the street has negotiated higher pricing for some specific services with Aetna. Or, your median price for a colonoscopy is 20 percent below the median market price. These insights are designed to be actionable, or at least drive questions to the pricing teams.
See an example of price comparisons on our Analytics page.
One potential outcome of increased price transparency is that shopping for healthcare may, in some cases, become more like shopping for airfare. Price transparency in the airline industry has not equalized prices or created a race to the bottom; instead, it has empowered customers to choose the airlines that offer the services and experience that are most important to them.
Those most concerned with price can fly with budget airlines; those most concerned with quality and service can choose business class with their preferred airline.
Transparency Will Breed Competition
CMS’s stance is that increased pricing transparency will lead to increased innovation among hospitals. The best providers have nothing to fear from revealing their prices, and their competitors will have more incentive to establish their own niches – a recipe for innovation.
If you would like to see pricing data for your hospital or hospital group, send us a note and we’ll give you access. If you’re interested in seeing pricing data for your competitors, get in touch and we’ll discuss how we can meet your needs.
We look forward to hearing from you.