Discover how AArete’s operational improvement, healthcare tech and end-to-end implementation can help healthcare payers tackle the biggest CMS regulatory compliance challenges create.
Understanding CMS Best Practices for Regulatory Compliance
The Big Picture
Regulatory bodies are increasingly focused on policies aimed at enhancing cost-of-care transparency and empowering policyholders to examine comparable service costs from group and individual networks. While the objective of these efforts is to provide price comparisons for consumers, these extensive policies can create friction for providers with massive numbers of covered items and services or irregularly documented billable procedures. This friction carries over to payers who now must supply impute rates for specified professional services based on plan information, often resulting in gaps between hospital-provided rate configuration and payer data.
The Fine Print
The Centers for Medicare & Medicaid Services (CMS) took aim at opaque pricing structures for billable services for group and individual network providers by creating a wide-reaching pricing transparency regulation framework in 2019. Dubbed the Hospital Price Transparency provision, this portion of the Public Welfare Code requires most hospitals to publish their standard charges online in a machine-readable file (MRF) format. These files must be provided free of charge and be accessible to automated searches and direct file downloads.
Hospitals were required to meet this new regulatory standard in phases. The multi-year requirement rollout began in 2022 and culminated in January 2024 as the final phase was initiated. First, hospitals were required to publish MRF with costs for items and services for both in-network and out-of-network providers. Next, providers had to roll out an online price comparison tool with cost estimates for at least 500 items and services. This publicly available tool was available for members to estimate the cost of services from specific providers. The final phase requires all providers to provide a price comparison tool for all covered items and services.
A huge onus is placed on providers to describe and attribute a cost to each item or service provided by the hospital, but this regulation creates immediate and wide-ranging data reporting requirements for healthcare payers as well. Insurers must provide hospitals with rates for plan participants so the hospitals can publish the costs in their cost comparison tools.
Our Approach to CMS Regulatory Compliance
Cost comparison tools like what is required by the Hospital Price Transparency code section can encourage users to shop for the best rates on medical procedures, but only if the data used is reliable and accurate. AArete’s end-to-end implementation approach ensures data is identified, cleansed, codified, and reported to meet CMS compliance requirements.
Our team first collects all data sources and creates a database for corresponding information and rates to populate MRF. After implementing a universal taxonomy to standardize provider and payer data, we incorporate proprietary market intelligence to identify rate differences in the payer-documented billable procedures and the MRF.
From there, we developed a multi-step, tiered analytical model that leverages descriptive statistics to fill in the missing information with combined data from 30 markets.
While our data modeling process is highly effective, our unique value lies in our dedication to fostering strong client relationships. By partnering closely with the client, our consulting team easily translates business needs to custom solutions and frameworks that support simple annual reporting.
Results
We worked to close identified gaps to ensure the client is on track with upcoming regulatory compliance requirements. The MRF is now ready for entry into a publicly accessible price comparison tool, reaching a 99% High or Medium confidence level.
Because our approach was grounded in frequent communication with our client, the output not only complied with current regulatory standards but also made it easy to meet annual update requirements. Our analytical approach and forward-looking logical framework were easily transitioned to the client, meaning their data can be continually refreshed with minimal effort and oversight for seamless annual reporting.
Opportunities Ahead
Time will tell how these regulations will ultimately affect members, but the ever-increasing push for data-driven pricing models presents insurers with the potential to save money by using data to their advantage.
If your organization needs help navigating the ever-changing landscape of network regulations, explore AArete’s operational improvement & healthcare tech solutions.
