Hospitals have to post prices. Soon, you will too.
For those of us in the cosmetic space, practicing within the comfort of your own office-based practice, January 1, 2021 may have come and gone without much fanfare. But in actuality, that day was one of the biggest tipping points in health care.
Hospitals, long known for opaque pricing, were forced to do the unthinkable: post their prices on their websites.1New CMS price transparency rules2 went into effect on January 1, and while these new rules were initiated by former President Trump, the Centers for Medicare and Medicaid Services are still charged with enforcing these new rules, even under a new Administration.
New CMS Price Transparency Rules
There are two overarching requirements from CMS.3 In short, hospitals are required to make the following two items easy to find on a hospital’s website:
A machine-readable file with all of their pricing—chargemaster rates, insurance specific negotiated rates, cash prices and the average maximum and minimum negotiated charges for each procedure and 300 “shoppable” services with the same rates as above, except for the chargemaster rates. And of those 300 shoppable services, CMS specifies 70 of those procedures, while the hospital can choose the other 230.
In regard to number one, the downloadable files must contain all of the necessary information described. Hospitals don’t get to pick and choose what types of charges to include. CMS requires the inclusion of supply costs as part of the procedure.
As for the second requirement, shoppable services have to be displayed in a consumer-friendly price estimator tool.4 Aside from showing the cash price and negotiated rates from all payors, including the maximum and minimum negotiated rate, CMS also clarifies that the tool cannot require any personally identifying information (PII) required to create an account, such as a username or password. Asking for PII in the form of an insurance plan or policy number is allowed so as to provide the consumer with a more specific out-of-pocket estimate.
Hospitals that are non-compliant with these requirements risk a $300 per day CMS penalty ($109,500 annually).
What does this have to do the cosmetic practitioner?
At this point, you may be breathing a sigh of relief, thinking, “I only provide cash-based cosmetic procedures in my office. I don’t even have privileges at a hospital anymore. This doesn’t affect me!” But as we say here in San Francisco, if you think these new rules won’t eventually have an affect you in some way, you’re high.
Yes, of course, the new CMS rules only directly apply to hospitals. But next year, CMS will also require insurance companies to post all of the negotiated rates they have with hospitals and individual practices and practitioners. So, if you still perform any insurance-based procedures, your negotiated rates will come to light.
Even the upcoming rules for insurance companies still do not directly affect those of us providing purely cash-based services. However, they will indirectly affect us eventually. As more consumers get used to the idea of checking pricing on shoppable services from a hospital, they will start to expect pricing information for the most shoppable of services: cosmetic procedures!
Conclusion
Doctors, and especially cosmetic providers, often give several reasons for not wanting to post pricing on their website. “It’s too complicated to provide pricing ahead of time.” “I don’t want competitors to see my pricing.” “What if the consumer doesn’t understand it’s an estimate?”
While all of these concerns are valid, the truth is: physicians, surgery centers, and hospitals all have spreadsheets to keep track of their cash rates, bundled rates, and negotiated rates. The data is there. It just needs to be organized into a user-friendly price estimator tool 5 chatbot6 that offers easy access to pricing information.
Luckily, as a practitioner, you can use this as a lead generation opportunity and build a huge email marketing database7 in the process! Similar to how hospitals can request insurance information from the consumer to provide a more accurate out-of-pocket estimate (and thus capturing identifiable information), individual practitioners can still request or require users to enter their contact info in exchange for pricing information like I do on my website.8 In this way, I’m using price transparency as a lead generation technique.9 And because the consumer gets that always elusive cost estimate before the consultation, it’s also a customer service opportunity!10
Don’t bury your head in the sand thinking this won’t affect you. Simply recognize it for what it is: The right thing to do for the consumer and an effective way to avoid consults that end in sticker shock, thereby increasing the number of patients that book a procedure at the time of the consultation by 41%!11
1. https://www.medicaleconomics.com/view/top-10-ways-hospitals-are-not-compliant-with-new-cms-price-transparency-rules
2. https://www.cms.gov/hospital-price-transparency
3. https://www.cms.gov/hospital-price-transparency
4. http://www.buildmybod.com/medstar-georgetown
5. https://www.timsayedmd.com/pricing/
6. https://www.timsayedmd.com/
7. https://modernaesthetics.com/articles/2019-may-june/how-an-email-database-can-power-your-practice
8. http://www.realdrbae.com/pricing
9. https://modernaesthetics.com/articles/2017-nov-dec/loading-the-sales-funnel-through-price-transparency
10. https://www.medicaleconomics.com/view/price-transparency-customer-service-opportunity-healthcare
11. https://journals.lww.com/annalsplasticsurgery/pages/articleviewer.aspx?year=2016&issue=05003&article=00023&type=Fulltext
12. http://www.buildmybod.com/
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