Price Transparency Data: New Challenges & Opportunities
In Episode 13 of the “Achieving Health” podcast, host Chad Mulvany shares the latest healthcare policy and legislative updates for the week of December 1, 2025. Then, Beth Mullins and Alicia Faust of Forvis Mazars and Shawn Stack with the Healthcare Financial Management Association (HFMA) join the podcast to discuss price transparency challenges and opportunities. Hear their perspectives on new compliance requirements in the 2026 Outpatient Prospective Payment System final rule, as well as strategies to leverage price transparency data for managed care negotiations and pricing strategy.
Transcript
CHAD MULVANY
On today’s episode of Achieving Health, I’ve got the latest policy and legislative updates from Washington, D.C. for the week of December 1st, 2025. Then we’ll have a conversation on new price transparency compliance requirements, challenges, and opportunities with my Forvis Mazars colleagues, Beth Mullins and Alicia Faust, and our guest, Shawn Stack from the Healthcare Financial Management Association. Stay tuned.
ANNOUNCER
This is Achieving Health. A podcast from Forvis Mazars, where we delve into the topics that matter most to healthcare organizations across the continuum of care. Our goal is to help you navigate the dynamic healthcare landscape and achieve health at your organization. Here’s your host, Chad Mulvany.
CHAD MULVANY
Welcome to Achieving Health. I’m Chad Mulvany, director in the Healthcare Practice at Forvis Mazars. Thank you for joining me. We’ll begin today with our Washington Watch segment, where I share updates on the most recent actions of federal policymakers and their anticipated impact on healthcare providers and payers. Today’s Washington Watch reflects information as of 10 a.m. Eastern Time on Monday, December 1st, 2025. Hope everybody had a wonderful Thanksgiving and was able to enjoy the great carb loading with friends and family.
My comments on these discussions are based on what’s being reported by the D.C. trade press at the time of recording, mixed with a lot of judgment about where things may go based on my experience in D.C. So, today’s remarks reflect information as of this moment and will change.
As far as our agenda is concerned, on November 21st, CMS released its calendar year 2026 Outpatient Perspective Payment System final rule. CMS estimates that before the recoupment related to the 340B separately payable Part B drug settlement, changes in the rule will increase OPPS payments by $1.77 billion in calendar year 2026, excluding changes in enrollment case mix in utilization. For providers subject to it, the 340B remedy offset is estimated to reduce payments by $270 million, which was reduced from the proposed impact estimate of $1.1 billion.
So that’s a huge, if temporary, win. We’ll also cover a couple of the other key provisions in the rule in the segment. We’ll also get into President Trump teasing a healthcare plan. It was reported last week that President Trump would announce a hybrid healthcare plan to address affordability issues. However, the anticipated healthcare plan announcement was delayed, if not kiboshed, amid confusion and pushback amongst Republicans.
We’ll cover what was reportedly in it and provide some thoughts on where, with not many legislating days left to go before premium year starts, how affordability efforts may shake out. CMS also issued preliminary guidance on a couple of One Big Beautiful Bill Act provisions related to provider taxes. And so, on November 17th, there was preliminary guidance clarifying the definitions of enacted and imposed for applying new indirect hold harmless thresholds and also outlining a transition period for noncompliant taxes.
While the guidance isn’t good, it was certainly about what was expected. And then finally, right before Thanksgiving, we got the Medicare Advantage proposed rule. And so, on Tuesday the 25th, CMS released its proposed rule for contract year 2027 that would revise the Medicare Advantage program. The main update in it is related to the star ratings process. There are also some changes that will streamline enrollment processes and codify provisions from the Inflation Reduction Act of 2022.
So, with that, let’s get into it. In terms of the OPPS final rule, beyond the payment update and recoupment related to 340B, CMS finalizes fielding a drug cost acquisition survey. It implements site-neutral payments for drug infusion services in excepted off campus HOPDs. It also modifies price transparency requirements and phases out the inpatient only list while expanding the ASC covered procedures list.
And, just a note on price transparency, I’m going to defer to my friends Beth, Alicia, and Shawn to cover this detail in the second portion of this episode. Certainly, a great conversation and if you were tempted to drop off after Washington Watch, I’d encourage you to stick around as they deliver the goods and then some. Again, what I will say about what I will cover on OPPS, please note that it’s not intended to be an exhaustive discussion, but just kind of cover some of the key things quickly at a very high level.
In terms of the payment update, CMS was on brand with a market basket update that was less than input price inflation. And so, the net market basket update was 2.6%, which was 3.3% gross reduced by the mandated 7/10 percent productivity adjustment for hospitals meeting outpatient quality reporting requirements. This was increased from 2.4% proposed, and not a surprise given that the OPPS market basket update, by statute, has to follow the IPPS final rule market basket update.
After budget neutrality and other adjustments, the resulting OPPS conversion factor is $91.41, or $91.415. As proposed, it was $91.747, and that’s before the 340B recoupment. Despite the increased net market basket update, the decrease in the area wage index budget neutrality adjustment from proposed 1.0116 to final .9990 drove the reduction in the OPPS conversion factor.
And then for those hospitals subject to the half a percentage point 340B remedy offset, which was decreased from 2%, the final rule conversion factor lands at $90.96, or $90.967, and certainly that was increased from $89.958, which works out to a little more than a 2% increase, net of all adjustments for those hospitals meeting quality reporting requirements. As I did mention, CMS did not finalize its proposal to increase recoupment of funds related to the overturned 340B separately payable Part B drug policy at 2%.
Instead, recoupment will begin on January 1st at the previously finalized rate of a half a percentage point and will impact services with status indicators of J1, J2, P, Q1, Q2, Q3, R, S, S1, T, U, V. Recoupment does not apply to providers that began billing Medicare under OPPS after January 1st, 2018. The final rule also notes that CMS anticipates implementing a larger percent reduction, such as the 2% reduction or other reduction beginning in 2027.
So, what CMS is suggesting here is that we may have temporarily dodged a much bigger cut. The rule also finalized the proposal for site neutral payment for drug administration services, provided in accepted HOPDs, and so beginning in calendar year 2026, CMS will pay for drug administration services provided in those accepted off-campus HOPDs, so those billing with the PO modifier at the physician fee schedule equivalent, which is 40% of the applicable APC rate. The policy will only apply to APCs 5691 through 5694, and does not apply to the drugs that are administered; it’s just the code for administration.
The agency estimates in 2026 it will save $290 million. $220 million of that is saved by CMS, $70 million of that is saved by beneficiaries. And like the site-neutral clinic visit policy, CMS exempts sole community hospitals from this change. CMS applies this policy change in a non-budget-neutral manner. It justifies this action as a quote unquote “volume control method” and cites the growth in spending and drug administration services provided in accepted OPDs as the rationale.
It’s worth noting that CMS used the same justification when it applied site neutral payments to clinic visits provided in accepted off-campus HOPDs. While hospitals challenged the clinic visit policy in court, it was upheld by a federal appeals court, and the Supreme Court declined to hear the appeal. However, that ruling occurred prior to the Supreme Court’s decision in Loper Bright, which overturned the legal Chevron doctrine, which required courts to defer to federal agencies reasonable interpretations of ambiguous statutes they administer, which may create an opportunity for a legal challenge to this policy.
CMS, also in the proposed rule, requested feedback on expanding site-neutral clinic visit policy to apply to clinic services provided in on-campus HOPDs. While CMS did not provide a summary of those comments, it notes it received a range of comments related to expanding site-neutral payments and those comments touched on on-campus clinic visits, imaging services without contrast, and off-campus provider-based departments and other services that it contends to consider in future rulemaking.
It also sought feedback for developing a systemic process for identifying ambulatory services at risk of being shifted to more expensive, hospital-based settings due to financial incentives. Similarly, like the question about extending the policy to on-campus clinic visits, it did not summarize these comments, but notes it received 43 pieces of feedback and may take them into consideration in future rulemaking.
CMS also finalized the timeline for its outpatient drug pricing survey, and so in response to President Trump’s executive order related to drug pricing, CMS will field a drug cost acquisition survey for covered hospital outpatient drugs. Based on the final rule, the agency will field the survey in early 2026. Hospitals will have 90 days to respond, so the survey can be completed in time for the results to inform the 2027 OPPS proposed rule.
In addition to drug acquisition prices, the survey will require hospitals to report all discounts, rebates, and other price concessions that are provided, including the 340B discounts. It’s likely the results of the survey will be used to reprise a reduction in payment for separately payable Part B drugs acquired under the 340B program.
Given there were response rate issues when the prior Trump administration attempted to field a similar survey in spring of 2020, the proposed rule also considered approaches to account for non-responses to ensure the data set provides a large enough sample size to be statistically reliable and meet statutory requirements. Based on this commentary and responses to comments, CMS may assume that if a hospital does not respond to the survey, its outpatient drug costs are not significant. As a result, it discussed assigning these hospitals to the lowest reported acquisition costs for its peer group in the proposed rule.
The proposed rule also noted that CMS may consider expanding packaging in some instances, as low response rates might indicate insignificant outpatient drug costs. The final rule also clarifies that CMS has made no decision on how, if at all, it will account for non-responses and any policies related to non-responses will be included in future rulemaking after CMS has had an opportunity to analyze the data. In terms of phasing out the inpatient-only list, as proposed beginning in calendar year 2026, CMS will phase out the inpatient only list over three years, starting with 285 CPT codes that are for mostly musculoskeletal services.
The services CMS removes are listed in table 119, page 888 of the display copy. Correspondingly, CMS creates a seven-level musculoskeletal procedure APC, to which it will assign procedures removed from the list based on applicable estimated cost. CMS will complete this phaseout by calendar year 2029. CMS will continue exempting procedures that have been removed from the IPO list for medical review activities to assess compliance with the two midnight rule, until the Secretary determines that the service or procedure is more commonly performed in the Medicare population in the outpatient setting.
It’s also important to remember that Medicare Advantage plans should also be adhering to this guidance. In terms of the changes to the AIC covered procedure list, the final rule expands the AIC covered procedure list by 560 services. So, this is 289 procedures in general, and then includes an additional 271 that were removed from the inpatient-only list. The list of procedures CMS adds are included in tables 131 and 132 in the display version of the final rule, and so these begin on page 1068.
Final rule also includes a requirement for hospitals to report their Medicare Advantage negotiated rates, with the idea that these will be used in calculating MS-DRG rates in the future. And so, for cost reporting periods ending on or after January 1st, 2026, CMS requires hospitals to include, in their Medicare cost reports, the median of their negotiated Medicare Advantage rates for all plans.
This data would come from the most recent version of its price transparency machine readable file. Critical access hospitals are excluded from this requirement. Instructions for reporting this data on the cost report are discussed in an information collection request, and that will be included in the show notes. CMS also intends to use this data for setting MS-DRG weights effective for Fed fiscal year 2029.
The agency believes there is a need to reduce reliance on hospital chargemasters and develop market-based approaches to establishing payment rates under the Medicare Fee-for-Service system. The prior Trump administration also included this policy in the 2021 IPPS final rule, which was repealed by the Biden administration in the 2022 IPPS rule. Shifting gears, President Trump on November 23rd teased a health plan to address affordability issues.
It was reported that the president would announce a hybrid health plan that would address some of the affordability issues that could imperil Republicans’ majority in the House and possibly cost them a pickup seat opportunity in the Senate in Georgia. However, the anticipated healthcare plan has been at least delayed, if not had the kibosh put on it, amid confusion and pushback from Republicans, many of whom were surprised by the proposal’s direction.
The plan was reported to include a two-year extension of the enhanced ACA subsidies, but with income caps and also minimum premium payments in an option for enrollees to divert part of their tax credit into savings accounts, either an FSA or HSA, if they chose lower cost plans. While an extension of the exchange subsidies is not popular with most Republicans, the restrictions to subsidy eligibility and the HSA provisions align with conservative priorities.
However, the president, as I mentioned, has since walked back support for a two-year extension while leaving the door open for some kind of change. Democrats’ reactions ranged from cautiously optimistic to outright rejection. Senator Jeanne Shaheen of New Hampshire welcomed the possibility of bipartisan talks, noting that the president’s involvement could signal a serious negotiating effort, especially ahead of a December vote on extending subsidies.
However, top House Democrats dismissed the proposal as recycled Republican ideas that fail to protect consumers from looming premium hikes. With Republicans divided and Democrats split between negotiation and opposition, the president’s healthcare plan remains in limbo, leaving the future of ACA subsidies and any small bore healthcare reform uncertain. If the president does lean in and introduce a healthcare affordability plan that includes an extension of the enhanced exchange subsidies, it improves the likelihood they are extended. However, I’m not sure by how much.
As I mentioned earlier, an extension of the subsidies remains unpopular with conservative Republicans in the House and the Senate. Those obviously in safe districts or in solidly red states, in the optics of passing a healthcare bill in both the House and Senate, supported by only a minority of Republicans, is a bad look for both Majority Leader Thune and Speaker Johnson, who has already had enough of a challenge recently managing his caucus.
Speaking of, it’s reported that more than 85 House Republicans have expressed their support for an extension of the enhanced tax credits. It’s possible that enough of this cohort will work with Democrats in the House to file a discharge petition for a vote on the extended subsidies in that chamber. If that occurs, it’s likely an extension of the enhanced subsidies would pass the House with less than majority Republican support.
However, I still don’t think there are votes in the Senate. Majority Leader Thune makes good on his commitment to hold a vote on extending the subsidies. The other things here to watch are the potential offsets, in addition to the existing list of potential offsets. So, think PBM reform, further expansion of Medicare site-neutral payments, the No UPCODE Act, which would impact MA plans.
It’s reported that President Trump, if he had rolled out a healthcare plan, was considering codifying his most favored nation’s drug pricing policy. While details are scarce on what this entails, and there are two rules under review with the Office of Management and Budget that are likely related to it, it’s possible that it would again impact Medicare payment for Part B, separately payable drugs.
And while a straight extension of the enhanced subsidies without an offset will benefit all providers, if the cost is offset, and that’s, I’m assuming it will be, how that occurs will determine whether or not an extension of the subsidies benefits a specific provider or not, and that will likely break down between expansion and non-expansion states. Moving on to OB3, on November 17th, CMS issued preliminary guidance implementing the provider tax provisions of the One Big Beautiful Bill Act, and this guidance clarified definitions of enacted and imposed for implying new indirect hold harmless thresholds and also outlined a transition period for noncompliant taxes.
As a bit of background, under section 71115 of OB3, new indirect hold harmless thresholds. Effective October 1st, 2026, non-expansion states are limited to provider taxes enacted and imposed as of July 4th, 2025, while expansion states face phasedown thresholds starting at 5.5% in fed fiscal year 2028, declining to 3.5% by fed fiscal year 2032. States without provider taxes as of that date are capped at 0%.
In section 71113, closing a regulatory loophole, this tightens rules for waiving the uniformity standard by prohibiting tax structures that favor or penalize providers based on Medicaid participation or volume, with the HHS secretary authorized to establish a transition period of up to three years for taxes failing to meet the new redistributive criteria. With that out of the way, let’s get to the guidance.
So, for section 71115, the new indirect harmless thresholds, CMS clarified which provider taxes fall under the new hold harmless thresholds by defining enacted and imposed. A tax is considered enacted if all legislative steps were completed and any necessary CMS waiver was approved by January 4th, 2025, with later adjustments excluded from this definition. Imposed means the state was actively collecting revenue under that tax structure as of July 4th, 2025, and any proposals pending or submitted after that date would not count towards threshold calculations.
The new indirect hold harmless thresholds established by section 71115 of OB3 will take effect on October 1st, 2026. In section 71117, Closing a regulatory loophole, CMS’ guidance under the OB3 restates the updated criteria for determining whether a tax is considered generally redistributive. To help states comply,
CMS set transition deadlines. Managed care organization taxes must meet requirements by the end of the state’s fiscal year in 2026, while all other affected taxes must comply by the end of fiscal year in 2028, but no later than 10/1/28. The agency emphasized that these timelines are the minimum transition periods, with the possibility of granting up to three fiscal years depending on final rule making.
The guidance isn’t good, but obviously it’s about what was expected. Section 71115 will impact counties and states that quickly passed provider tax increases before OB3’s enactment but were unable to either one, get a waiver associated with the tax approved by CMS and or two, actually collect proceeds from the class of tax providers. While CMS will allow these new taxes that didn’t get across the finish line to go into effect, the tax rate must come back down by 10/1/26.
Allegedly, CMS is calling states to inform them if they were impacted by the preliminary guidance. CMS is not anticipated to publish a list, so the extent of the impact is unclear and will likely remain so for a bit. Given this was preliminary guidance, there is a chance that CMS reconsiders. However, I think the odds of this are probably long given they knew what they were doing when they issued this preliminary document.
Finally, on Tuesday, November 25th, the Centers for Medicare and Medicaid Services released a proposed rule for contract year 2027 that would revise the Medicare Advantage program, rule updates, star ratings, streamlines enrollment process and codifies provisions from the Inflation Reduction Act of 2022. Key changes to the star rating system include removing 12 measures that focus on administrative processes with little variation in performance, while adding a new depression screening and follow up measure to address behavioral health gaps.
CMS also decided not to implement the previously planned Excellent Health Outcomes for All reward. Instead continuing the historical reward factor that emphasizes consistent high performance across all measures. These adjustments aim to reduce administrative burden and refocus the program on clinical care outcomes and patient experience, where meaningful differences exist among plans. The proposal also addresses enrollment and drug benefit reforms.
CMS plans to expand special enrollment periods to make it easier for beneficiaries to switch plans when providers leave their network, and to codify policies requiring CMS approval for certain special enrollment periods to ensure transparency. Additionally, CMS seeks to codify major Part D reforms from the Inflation Reduction Act, such as eliminating the coverage gap, lowering out-of-pocket thresholds, removing catastrophic phase-in cost sharing, and implementing the manufacturer discount program.
Finally, CMS clarifies that cannabis products, illegal under federal or state law, cannot be offered as supplemental benefits for chronically ill enrollees, aligning MA policies with federal law while maintaining safeguards. This concludes today’s Washington Watch. Up next, we’ll have a conversation on price transparency between my colleagues, Alicia Faust and Beth Mullins, and our guest, Shawn Stack from HFMA.
I’d like to welcome our guests for today’s episode, Beth Mullins, Alicia Faust, and Shawn Stack. Beth is a principal in the Healthcare Consulting practice at Forvis Mazars. Her work focuses on managed care strategy and contracting, including rate benchmarking and negotiations, supported by price transparency data.
Alicia is a partner on our Healthcare Consulting team with a focus on revenue cycle improvement and revenue integrity. She supports clients with price transparency compliance and reporting, and she also helps them leverage price transparency data to support pricing strategy and also monitoring payment variances.
Finally, we have Shawn Stack, Director of Perspectives and Analysis at HFMA. Shawn is here to provide a policy perspective on price transparency in the recently finalized 2026 Outpatient Perspective Payment System rule and give his thoughts on future developments in price transparency.
Thank you all for being here. Beth, I’ll turn it over to you to get the conversation started.
BETH MULLINS
Thank you, Chad. Well, the new OPPS final rule has come out and Shawn, how did the final rule change the price transparency requirements that hospitals must meet?
SHAWN STACK
Great, Beth. Well, yeah, the final rule. Really, I mean, CMS largely finalized the price transparency changes as proposed but added a little bit of important operational and compliance clarifications that hospitals need to understand heading into 2026. The biggest shift is the formal replacement of the estimated allowed amounts with the actual percentile based allowed amounts. That 10th, median, and 90th percentiles, plus a number of data points used.
The final rule adds technical instructions like rounding rules, requires a 12- to 15-month lookback, and allows equivalent remittance data sources beyond the EDI 835 that was in the proposed rule. It also updates the attestation language and finalizes that and expands it a bit. Hospitals must testify, or attest, I should say, not only that the MRF is accurate, but that algorithmic based rates included all components necessary for the public to derive dollarized pricing.
CMS also finalized the requirement to encode the CEO or senior official responsible for that attestation language. The final rule also talks about NPI requirements. It tightens the NPI requirement. Hospitals must now report type two NPIs specifically tied to hospital taxonomy codes 27 and 28. And it also continued that language that was in the proposed rule around the approved proposed 35% reduction in civil monetary penalties for hospitals that waive appeal rights.
It did carve out any noncompliance related to core requirements, such as failing to post an MRF or shoppable services, away from that 35% reduction. And then last but not least, the final rule did allow a little bit of variation on effective versus enforcement dates. While January 1st, 2026 remains the effective date for the new requirements, the agency did introduce a new three-month enforcement delay where CMS will not enforce these provisions until April 1st of 2026, giving hospitals a little bit of time to operationalize those new elements.
BETH MULLINS
Great. Thank you. Alicia, what are you hearing from clients about the new requirements?
ALICIA FAUST
The new requirements will continue to be burdensome and that’s kind of what we’re hearing around the country. The allowed amounts, as Shawn mentioned, continue to be a challenge, mostly because all of the fields of the 835s are not required to be filled out by the payers.
This, along with complex reimbursement methodologies, as well as the edits that we’re not able to see, really do present challenges on how we get to the allowed amount. The addition of the additional NPIs is also going to be a challenge for organizations, particularly around behavioral health, which I think many of them did not include previously as a hospital unit.
And we’re seeing that being added around the country. The 90th and 10th percentile will be a challenge as well, because we have to be able to identify that allowed amount in those specificities. There is some language around what rounding is going to be. However, organizations are going to have to be meticulous in their calculations in order to get there.
So, I think folks are nervous. I also think that they are even more nervous about the attestation being at the most executive level, most senior executive levels of their organizations, which is more in line with what we see on the cost report side.
BETH MULLINS
Great. Thanks, Alicia. Shawn, what are you hearing?
SHAWN STACK
Yeah. So, Beth, very similar to what Alicia’s hearing. On a general level, I think folks right now are still processing the rule, right? They’re still analyzing what these impacts are going to be. I think timelines for compliance are extremely tight, even given that new 90-day window for enforcement, and administrative burden will be high given the size of these files.
Many organizations were set to refresh their MRFs in January based on that annual update requirement, and then they immediately have to implement new fields and meet the updated compliance requirements by April 1st. So that’s going to be a heavy lift. But I think once providers really dig into the attestation language that Alicia talked about in that final rule and recognize how broadly the operational requirements apply across multiple scenarios, I expect the angst to ramp up quickly, and I think we’re all going to be getting calls from our members and clients.
BETH MULLINS
Alicia, just in terms of compliance, are there some of the components that are more concerning than others, just in terms of meeting that compliance in that time frame?
ALICIA FAUST
Yes. I think the allowed amount is definitely the highest concern for folks. Most hospitals continue to struggle with just getting their contracts from their payers to be able to meet what was historically the minimal requirement from an allowed amount.
They have to now go back to using the 835s and calculate at the additional percentiles will create additional work for most organizations that really don’t have the sophistication in order to read those 835s beyond what they use for charge posting.
In addition to that, while the NPI reconciliations are not complex, it is going to take additional time for them to get that data in their MRFs, and then everything that they do from that perspective will have to also flow to their shoppable services. So, as organizations are looking to comply with this review requirement, it’s not only on the MRF, but also on the shoppable services for both.
BETH MULLINS
So, Shawn, if you’re looking into your crystal ball, where do you think the administration and CMS will go next on price transparency?
SHAWN STACK
Next on price transparency. Oh, boy. Well, my crystal ball basically shattered the day the OPPS proposed rule dropped, so that’s out the window. So, that tells you how unpredictable things have been. But if I had to put money on what’s next in the regulatory laser beam line up, it’s no surprise act enforcement, right? I think shoppable services and price estimator tools are of high focus by the administration and their stakeholders.
The advanced EOB and all-inclusive good faith estimates, are certainly going to be next. And a pretty clear drift toward exact pricing, especially for shoppable services. So, I think there’s going to be some heavy lifts coming from the administration and from the agencies. So, I think we should buckle up, or at least make sure you rest up over the holiday break.
BETH MULLINS
Got it. So, Shawn, what does this mean for hospitals and health systems?
SHAWN STACK
I mean, you can see the administration and its advisors starting to show more interest in holding payers accountable for TIC files, especially now that they’re trying to line up hospital files against those payer files to judge accuracy and usefulness. But I’m not overly optimistic that federal oversight of payer TIC files compliance is going to gain much traction. The audit authority is murky.
And the question is, is it state or federal? It’s previously been left in the state’s hands and even the federal contractor doesn’t really have the bandwidth for large scale TIC audits based on what I’m hearing. So, for now, I think the scrutiny is going to stay focused on hospitals and providers for the foreseeable future. That’s just my two cents.
So, I think hospitals are going to have to balance what is most, you know, what are those items that they can get as compliant as possible based on these very murky directives from the administration and from the agencies.
BETH MULLINS
So, Alicia, just in terms of where we think the administration may be going, what do you think it means for hospitals and health systems from your perspective?
ALICIA FAUST
So, I agree with Shawn. I don’t think that the administration has the ability to do what I think they ultimately want to do, whether we’re 12 months or 24 months away from it, is really reconciling these two files.
So, the payer files historically have required NPI so that they could clearly identify the hospital and plan associated with that reimbursed amount, or the allowed amount. The hospitals did not require that. This new directive that requires hospitals to publish their NPI makes it a little bit easier for the administration to reconcile those two data sets.
To my earlier comment, is it going to become he said she said of who published the right rates? Is it the hospital file that’s correct, or is it the payer file that’s correct? And what does CMS plan to do with this information? In the future, what we’re talking to our clients about is, although they’re probably several months away from that audit program, organizations, hospitals, and health systems need to start preparing for it now.
BETH MULLINS
So while in the past I think they kind of skirted by still using some estimated amount, still potentially omitting some pretty significant reimbursement by payers that they’ve negotiated with, all of that comes to a halt because the cosmetic audit is going to come to an end and an actual audit of the allowed amounts is going to start to be enforced.
SHAWN STACK
Yeah, that’s that’s a good point, Alicia. And I’ve been hearing from my sources at CMS and in the agencies that there’s a lot, there’s a great deal of talk ramping up around desktop audits. And of course, we know that means looking at payer addendums, contract addendums and things like that. So yeah, I agree with you 100%.
Okay, Beth, I’ve been in the hot seat here for too long; let’s see what you have for us. And I say that because I think most listeners who know both of us know you’re smarter than me anyway. So, I want to pull you into this conversation and flip the table here a little bit. So, what opportunities do hospitals have to use price transparency data for market assessment and items?
BETH MULLINS
Yeah, that’s a good question, John. Hospitals are and should continue to use the price transparency data to benchmark their negotiated rate with peer hospitals in their states. The payers are using this data to leverage lower rates from hospitals. So, in many cases the payers are cherry picking rates to their advantage during contract negotiations with hospitals.
So, the hospitals really do need to be aware of how their pricing, their negotiated rates, align with other hospitals in their communities and their states in order to really maximize their opportunities and manage their risks with their negotiations.
SHAWN STACK
Great. Alicia, any thoughts here on this topic?
ALICIA FAUST
Absolutely. So that kind of hit the nail on the head that we should be using this data to help us negotiate our contracts, but part of what we also see hospitals and health systems using this data for is for their own market position benchmarking on how they’re actually charging the patients and the prices that they are charging to patients specifically.
What they need to be doing is really looking to understand from those contract amounts, do they have lesser than language, and are they leaving dollars on the table because their prices top line to the consumer is not appropriate? So, we have been using this, in tandem with Beth, to look at the top line to ensure that we’re maximizing our contracts. And then Beth and her team use it to help negotiate even better rates than what we already have.
SHAWN STACK
So, I know you guys have been having these conversations and doing this work with a lot of your clients. Can you give me a granular example of how this knowledge has helped inform managed care negotiating strategy? Beth, do you want to go first, since I know you’re working really closely with your clients on this?
BETH MULLINS
So, we’ve worked with numerous hospitals on rate benchmarking analyses, and in many cases it highlighted tremendous financial opportunities for the hospitals. It’s really very compelling actionable data and the hospitals were able to use that data in that analysis to renegotiate their rates to better align with peers. And significant financial upside and opportunity for those hospitals that were very knowledgeable about how their pricing compared to their peers.
SHAWN STACK
Great point. Alicia?
ALICIA FAUST
Yes. Similarly, so when we look at the actual reimbursements across the table, it highlighted for us the disparate negotiating tactics that the payers have been using across the country for a very long time. So, your reimbursement within your organization was only as good as the person sitting across from the payer when that negotiation was taking place. Historically, we did not have access to this information, and the access we did have was very, very costly.
For the first time, we actually have Freedom of Information Act. This information is public information. We are now able to understand our organization compared to our peers that are right down the street, the peers that are in our city. And then from a national perspective, even though the cost of care really should be level set across the country.
SHAWN STACK
But Alicia, don’t plans have access to the same data and aren’t they using it as well?
ALICIA FAUST
They are. And unfortunately for us, they’ve been using this data for a longer period of time purely because they had their own data to manipulate and really identify based on what they’ve negotiated with individual hospitals. So previously they had access to their own negotiating rates and were using that in order to negotiate with hospitals. This basically opened the field to them because now they have access to their peers.
So United has access to Aetna. Aetna has access to Blue Cross. Blue Cross has access to Humana. What it did is it gave them even more information that they historically had beyond their own negotiating. And yes, they are accessing it. They’ve been using it for a long time. So, they know how to access it. They still have a lot of the work to do that we’re doing on the hospital side in order to make that data usable, but they are definitely leveraging it in their current negotiations and probably future negotiations.
SHAWN STACK
So, it seems like the hospital’s David, in this scenario, and the payer’s kind of a Goliath scenario here. Sounds like this price transparency data is maybe giving David some steroids. Beth, are you seeing that in your negotiations with hospitals and managed care agreements on behalf of hospitals? Are you seeing this data greatly help and kind of boost the clarity that the providers are able to take into those conversations?
BETH MULLINS
Yeah, absolutely. Certainly, the hospitals, if they have done their research and understand where they are from a pricing perspective versus their peers, that it certainly gives them actionable data and then to know where to push on those rates. And, you know, we negotiate managed care agreements on behalf of hospitals every day and we’re seeing the payers now armed with this information, they’re using it to try to get hospitals to take decreases or minimize increases, like I mentioned before.
With the cherry picking of the data, the payers are, you know, picking different pieces of the rates to try to force the hospital to take a reduction in certain areas. Which is why it’s more important to do that overall assessment where your pricing compares to a rate benchmarking exercise. So, you know, in totality, how your rates align not just at the individual code level or service line level.
And so, in most cases, we’re able to use those analyzes that we’re doing on rate benchmarking to counter the payers information with more precise data that we have access to.
SHAWN STACK
So, Beth, I’m hearing you’re right. You’re kind of saying, you know, even if you’re a provider or a hospital in a region where you think you’re getting fairly fair prices, this data is just as important for you because you need to go into these negotiations very well prepared as you always have. But this gives you more insight into more defensive strategy and not taking reductions in payments, right?
BETH MULLINS
Yes, we have quite a few clients where the benchmarking analysis showed they were at top of the market in terms of their rates. So, it really then became important for them to ensure that their rates align from payer to payer so that there’s parity in their pricing. So that at the top of the market, at least, the payer A is competitive with payer B, if that makes sense. In terms of, and it dials into that defensive strategy, is how do we justify pricing and that articulating that defensible pricing.
SHAWN STACK
Great. Yeah. Because keeping in mind that the value of healthcare is not just pricing, right? It’s clinical outcomes. It’s length of stay, it’s readmission rates. It’s everything that goes into this. So yeah, that data, all this data together is what I think is what you guys are saying is, it really helps prepare those robust conversations when managed care contracts are due.
What are some of the challenges of working with hospital price transparency data and the health plan transparency in the TIC files? Alicia?
ALICIA FAUST
There are several challenges working with those files. I’ll take them independent of each other, but on the hospital side, the files continue to be inconsistent in what they’re reporting. They continue to be noncompliant with all of the components that they need. Many organizations really are still not reporting all of the payers that they have contracts with, simply because they don’t have access to the fee schedules that are required in order to publish.
While CMS has standardized the template, that’s about it. The underlying data still is very, very questionable for many hospitals across the country. On the health plan side, while I think the schema came out and was a little more consistent, the amount of data that they flooded the market with is unsurmountable. And so, folks are having to take a lot of time to kind of sift through that, because we want to ensure that we’re comparing apples to apples and not apples to oranges.
So, if you have the wrong plan selected on the payer side, compared to the hospital side, you could be misrepresenting what that patient amount from a price, as well as from a reimbursement to the hospital may really be. So, it’s really looking at those files independently, really understanding what is being published in order to make it usable and presentable for your organization.
SHAWN STACK
And then, Beth, what are you seeing as some of the challenges?
BETH MULLINS
Well, when using the data for rate benchmarking purposes, we typically utilize the payer price transparency files. We find them to be more consistent and reliable than the hospital files. However, those files are terabytes of data, and they’re quite large and difficult to navigate. So, they really do require expertise and experience to garner the data required for benchmarking.
SHAWN STACK
Interesting. And what lessons you guys, just wrapping up here kind of, what lessons have you learned from helping providers improve their managed care contracts that you think may be under appreciated by, you know, our listeners? What are those key opportunities or those a-ha moments that you guys have had going through this process because you spent so much time in this area? What are kind of those points that you want to get across? Beth, I’ll let you go first.
BETH MULLINS
Well, Shawn, the data not only allows hospitals to see how their rates compare on an aggregate basis, but they also allow benchmarking at the service line level. This really allows hospitals to better develop their rate proposals to payers to focus on service lines where there is a rate gap. So, for example, the rate benchmarking analyses will show them for inpatient services, how their rates align, how their emergency room rates align, surgery, all different service level information.
So, it really allows them to tailor their proposals to the payers and really try to make up room where their rates are lower in certain service lines, and maybe they dial back their rate ask on the services where they’re already at market or above.
SHAWN STACK
And Beth, don’t you think that’s going to become more and more valuable insight now that we’re really getting into that age of site neutrality and so many service lines being impacted by that lower reimbursement?
BETH MULLINS
Yeah, absolutely. I mean, having optics into that is important. We have clients that really not only want to benchmark themselves hospital-to-hospital, but they want to see how do my rates align for other provider types that are freestanding sites of service, to have a better idea of really what the patient is seeing in terms of price in hospital versus freestanding side of service.
SHAWN STACK
Yeah, I agree, Alicia. Anything here as we wrap up? What lessons have you learned from helping providers improve their managed care contracts?
ALICIA FAUST
I think a couple of takeaways that we have is, to Beth’s point, it really allows you to benchmark against your peer from a reimbursement perspective, to see where you have opportunity to improve those negotiations and those reimbursement rates while trying to keep the ones where you’re ahead of the game in line and static. But from a price perspective to the consumer, it also allows us to ensure that we’re maximizing our contracts and not having lesser than concerns, because we are able to see what those reimbursements are and set our defensible consumer price strategy.
Lastly, it allows us to also comply with the No Surprise Act and be able to look at those shoppable services and ensure that we are providing quality data to our patients as they think through what their financial implications are, all in the world of transparency.
SHAWN STACK
Well, Beth and Alicia, I really appreciate, you guys going through my questions here around, you know, these new price transparency requirements and where we’re heading as far as a healthcare ecosystem. I know you guys have boots-on-the-ground experience working with your clients and are able to really guide them through this process by laser focusing on these new requirements and how they can help providers and help them prepare for these conversations, not just with managed care payers, right, but also with the public, with the news outlets, with press, kind of that defensible pricing that makes sense to the consumer and educating them on that. So, thank you for sharing that today.
Let’s turn this back over to Chad.
CHAD MULVANY
I want to thank Beth, Alicia and Shawn for joining this episode and sharing their insights. I also want to thank our listeners for tuning in and following Achieving Health wherever you listen to podcasts. If you want to learn more about the topics we discuss here, be sure to check out the show notes for related content and information about how to get in touch with me and the team at Forvis Mazars.
Finally, I want to give you a heads up that we are planning some exciting changes to the podcast in the new year, and we’ll be sharing more details in two weeks on the next episode. I hope you’ll join me then for Achieving Health.
ANNOUNCER
You can follow Achieving Health on your favorite podcast platform or visit forvismazars.us/AchievingHealthPodcast to learn more. New episodes are released the first and third Wednesday of each month.
Achieving Health is produced by Forvis Mazars LLP, an independent member of Forvis Mazars Global, a leading global professional services network. Ranked among the largest public accounting firms in the United States, the firm’s 7,000 dedicated team members provide an Unmatched Client Experience through the delivery of assurance, tax, and consulting services for clients in all 50 states and internationally through the Global Network.
The information set forth in this podcast contains the analysis and conclusions of the panelists based upon his, her, or their research and analysis of industry information and legal authorities. Such analysis and conclusions should not be deemed opinions or conclusions by Forvis Mazars or the panelists as to any individual situation as situations are fact-specific. The listener should perform their own analysis and form their own conclusions regarding any specific situation. Further, the panelists’ conclusions may be revised without notice, with or without changes in industry information and legal authorities.