Are You Prepared for Healthcare Price Transparency Laws?

by:
on October 14, 2019

This year, President Trump signed an executive order directing federal agencies to create new rules and issue guidance for healthcare providers around price transparency.

The goal of the order, which came after several other related rules—such as the new requirement that drug manufacturers disclose pricing information in advertisements—is to more clearly communicate the cost of medical care to patients so pricing can help better inform their decisions regarding treatment.

The move to make healthcare pricing more transparent and protect patients from receiving unexpected medical bills is supported by representatives on both sides of the aisle, so it’s very likely that we’ll see new legislation around these efforts very soon.

Practices that prepare for the change before it’s mandated will gain a competitive advantage over those that take longer to do so.

We recently ran a survey of nearly 300 U.S. patients to learn about their experiences with healthcare costs. Based on that data, here are three ways you can start preparing for healthcare price transparency laws today:

Talk about cost of procedures before ordering them

In our survey, we asked patients to rank a list of methods for communicating healthcare costs in order to identify actionable solutions practices could start implementing today. Discussing the cost of treatment options (e.g., bloodwork, medication, etc.) before ordering it was far and away the most popular choice.

Patient preference for discussing medical costs in person

If you’re familiar with shared decision making, you’re more or less already equipped to implement this strategy.

The idea of shared decision making (which 97% of patients want, by the way) is for doctors to have conversations with their patients about different treatment options before acting. The goal is to enable patients to make informed decisions about their own care, which will encourage them to be more active and engaged with their own health—which will ultimately improve health outcomes.

To implement this price transparency strategy, you would need to add cost to the list of things you cover (likely out-of-pocket costs since insurance plans make it more complex) when discussing treatment options.

List pricing online

The second-highest ranked solution for healthcare price transparency in our survey was for practices to begin listing prices on their websites.

Patient preference for listing medical costs online

That sounds easy, and it makes sense that it’s something patients would ask for given their experience as consumers in other markets, but medical professionals know it’s not that simple.

That hasn’t stopped the President from requiring all hospitals to post their prices publicly on their websites, though. To comply with the President’s order, large hospitals have released massive price lists, called chargemasters, that cover the costs of individual services, drugs, procedures, or treatments patients could possibly experience.

chargemaster example
 
Example chargemaster (Source)

These lists are intense, and some experts believe they only serve to further confuse patients rather than to clear up healthcare pricing.

Fortunately, smaller practices have an advantage here. Because the list of services provided by independent practices and specialists is significantly smaller than hospitals, it’s a bit simpler to list out these costs.

You may also go so far as to group services that are commonly issued together to come up with a complete (out-of-pocket) estimate for patients to search by their needs.

For example, say a patient is experiencing cold like symptoms and wants to know how much they’ll spend if they come into your practice for treatment. On your website, you can list all of the tests you would run and treatments you would recommend for a sinus infection diagnosis—the cost of an office visit, the cost of lab tests, the cost of medications, etc.

Using this approach lets you form “cost groups” for the services you most commonly provide and which your patients most often require.

Itemize your bills

Finally, the last solution our survey respondents selected was for practices to provide itemized bills after patients receive services. These bills should clearly show what the charges were, how much was covered by insurance, and what portion of the total patients are responsible for paying.

Patient preference for receiving itemized medical bills

This is great news for providers because it’s a relatively easy solution to start offering—and in fact, many practices are already doing this.

For those that aren’t, the magic words are medical billing software.

These systems are available to medical practices as standalone software or as integrations in larger practice management suites, so the cost of implementing billing software ranges quite a bit.

There are many benefits to using a medical billing system, from increasing revenue to reducing physician burnout, but let’s focus on the specific applications of these systems for price transparency.

Medical billing software features include many automated processes that take the administrative burden off of you and your staff—including creating and sending statements to patients.

With the right system, you can send information from your EHR directly to your billing system, which will then be able to create an itemized bill to clearly show what patients are paying.

It’s a quick solution that patients are asking for, and it comes with additional benefits to make your life easier. It’s a classic win-win. If you want to learn more about medical billing software or practice management systems, reach out to our team of medical advisors to discuss your specific questions and needs.

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