Dear Colleagues,

As a former RAC Auditor (HealthDataInsights Region D), I have some insights on how CMS is using their adjudicated claims to identify hospitals that are violating the required elements in the machine-readable file.

In particular, the new rule requires a hospital to display the FULL charge for a packaged service (e.g., Outpatient Surgery or Inpatient DRG).  In a recent interview, I described this as providing the total charge for a cheeseburger, instead of listing the component charges:  lettuce, tomatoes, pickles, meat, buns, ketchup, mayonnaise, mustard, onions...  This is the intention of the new rule as most patients can not piece together the line-item components that are associated with a packaged service.  Here's the actual language in the Federal Register that makes it crystal clear that the charge includes all of the customary ancillary services:

This is a real example (hospital name not shown) of how CMS audits the data.

STEP 1 - CMS Observes Hospital Listing a Colonoscopy Charge as $4,645 for CPT 45378:

STEP 2 - CMS Refers to Its Adjudicated Outpatient Claims Database to Compare the Charges for this Exact Hospital

In this case, CMS confirms that the line-item charge for CPT 45378 (~$4,600) matches the amount in their adjudicated claims database.  However, when analyzing all ancillary charges that occur on this hospitals claims that include CPT 45378, the amount increases to $7,184, factoring ancillary services such as Laboratory, Pharmacy, Operating Room, etc.

At this point, CMS, at its discretion, may send a letter asking this hospital to correct its machine-readable file and consumer displays to reflect the "fully-loaded" charge that includes all ancillaries for packaged services.

If you would like HPS to take a confidential vulnerability assessment of your current machine-readable file, please schedule a free meeting on my private calendar:

In most cases, we can correct your machine-readable file within a few weeks and make sure your hospital is 100% compliant with the new price transparency rules.


Rick Louie
Managing Director
Hospital Pricing Specialists LLC

LinkedIn Profile:

Watch video of Shark Tank's Mr. Wonderful endorsing HPS Price Transparency services [Click Here]

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