CMS asks “Where’s the Beef?”... and pickles, tomatoes, onions, etc.
Before founding Hospital Pricing Specialists, I was the SVP of a RAC auditor (Region D).  Having a good relationship with CMS has been very useful in navigating the nuances of the new price transparency requirements.

Yesterday, I had a very enlightening and amusing conversation with my contact.  She said that many hospitals are missing the mark by not fully understanding the new definition of charge.  I’m paraphrasing, but this is the extent of her comments: “We’re asking for the full charge of the hamburger, not just the meat or buns.  In other words, when a consumer purchases a hamburger, is he likely to get pickles, lettuce, tomatoes, onions, condiments, and perhaps a side of fries?”
Some hospitals are simply regurgitating their chargemasters to meet the new rules and this is not copacetic. 

Here is the actual example in the Final Rule (Click Here) for a colonoscopy (CPT 45378) that must be included in the machine-readable file.  As you can plainly see, CMS is listing ALL of the corresponding codes/charges that the hospital bills when code 45378 takes place.  Moreover, the negotiated rate is NOT simply the fee schedule rate associated with CPT 45378, but rather the average payment (by payer) the hospital received for the entire claim that included 45378.

The only way to comply by this requirement is to meticulously mine through historical 837/835 files to see what was charged and what each payer paid.

Spoiler alert... it's not cheap to meet the new requirements.  In AHA’s brief to challenge this burdensome requirement, it cited Cleveland Clinic's estimate of up to $1MM and University of Tennessee budgeting $450K/year to meet the requirements.


I'm just being honest.  There are many vendors who simply want your money and do not fully understand all of the complexities involved to fully meet the new requirements, especially the machine-readable file.  In order to fully appreciate the new price transparency requirements, I suggest you watch a HFMA webinar that HPS presented [HERE].

If you'd like to discuss anything on this email, you can schedule a meeting on my private calendar:


Rick Louie
Managing Director
Hospital Pricing Specialists LLC

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