Jamie Cleverley: Hello and welcome to the 2021 Cleverley + Associates Spring Summit: Addressing Price Transparency’s Key Questions. My name is Jamie Cleverley. I’m President here at Cleverley + Associates, and it is my pleasure today to welcome you to this event. Your participation shows your commitment and interest to making Price Transparency a priority and to positive change for our communities and your patients. So we thank you for your investment of time in today’s event.

Now, over the past several months, since the implementation of the Price Transparency requirements. We have fielded a number of questions from hospitals across the country with regard to implementation strategies, the content of the disclosed data, and how the information can be used and defended. So we want to share with you today some practical thoughts and strategies to how you can address these key questions.

The way that we plan to do that is by taking four individual questions that we received and structuring each session to address that particular question. We’ll start with a discussion on “How are hospitals complying?” The second will be “How is the disclosed data being used.” The third – “How can hospitals defend their position in light of this information being made public?” And fourth, “How can hospitals prepare for the future?”

Now we recognize that as you move through today’s content you may have additional questions, and so we’d like to invite you to share those questions with us. On your web page you’ll notice to the right there’s a question and answer feature. You can simply type your question in that box and our consultants here will be fielding those questions for you real time. If you don’t see the box right now you might be in “full screen” mode. You can simply exit out of that and it will allow you to see that Q and A box.

So, we invite you to share those questions with us. Share a comment! We’ll be looking forward to some interactive dialogue as we move through today’s content. Again, thanks so much for joining us, and with that we’ll move forward to digging into this first question: “How are hospitals complying?”

One of the things that we’ve recognized in this is that in the months leading up to these requirements that were effective on January 1^st, hospitals struggled with understanding what the requirements meant for the, in terms of compliance, and how to specifically comply from a technical standpoint. So we want to share some information with you about the actual requirements and then move the majority of our time into how hospitals have evaluated their compliance position relative to peers across the country. We’ll start by digging into that first piece. Before we can kind of dive into how hospitals are complying we feel like it’s important to probably get a sense of a refresher of what requirements are in effect today.

With that, I always think it’s helpful to sort of set the stage with a timeline. You’re going to see several bullet points on this particular slide and there’s just a few things I want to highlight here. The first is, I think it’s important for us to recognize that all of this began back in 2010 with ACA. So the language we’re dealing with today, in terms of Price Transparency requirements, all really relate back to fundamental language that exists in ACA. There are some interesting things that center around that point. Right now we know that, before the Supreme Court, is a case involving the ADA and its ability to withstand that legal challenge could dictate where these transparency requirements go now and in the future.

For instance, if the entire rule were to be struck down then, in essence, the transparency requirements that we have today would also be struck down. So, there’s a lot at stake in this Supreme Court challenge, which is why so many people are so focused on what the outcome of that will be; whether the entire rule will be upheld, or if portions, like the individual mandate, will be struck down. If it is selective, in terms of what portions are struck down, the prevailing legal opinion is that these associated rules, and again transparency is one of them, would also withstand. So, keep that in mind as you’re watching that play out in the weeks to come.

One of the other key components here is recognizing the progression of the timeline. So you can see here we had some periods early on when we had some gaps of time in between significant elements or reminders for transparency. So we had the initiation of transparency in 2010 through the ACA, a reminder of compliance in 2014, and in 2018 is when we got our first requirements of how CMS wanted us to comply with providing this transparency information. From there things accelerated rapidly. It’s almost been a yearly, or even multiple times within a year, progression of adding on additional requirements.

What we glean from this is that transparency is not going anywhere. In fact, we see an acceleration of the movement for greater and greater transparency. So we’ll keep that in mind as well. We’ll touch on a few of the points in terms of additional requirements that have come into play, most notably the payor role which will really impact us as a hospital industry as well. That will be effective here in January 1^st of 2022. Again, we’ll comment more on that in just a bit.

One of the things that we see with that initial language from ACA is the types of requirements that would be included and what the current requirements really involve are definitional elements. So they’ve taken that base ACA language and they have clarified or defined key elements that there have been questions on for the last several years. The first is hospital. Who has to comply? Essentially what these latest requirements would tell us is everybody, essentially, needs to comply. Unless you’re a federally-owned or operated institution, you need to be complying with these new requirements.

The second is items and services. There were questions around “when you say items and services what does that mean? Is it everything? Is it subsections? Do I include drugs and supplies?” The current requirements lay out guidelines for that and again it is essentially all items and services. The next is standard charges.

There were questions as to “What does charge mean? We believe that it means our gross charge or our list price for these services,” and what CMS has done here is really widened out the playbook here and said “No, it’s everything. We want to see your gross charge. We want to see discounted cash pricing. We want to see payor negotiated rates.” This was, of course, the big lightning rod in all of this. “We also want to see min and max statistical elements for those payor-specific rates as well.”

You’re probably recognizing a theme here. Nothing is small in this. They’re asking for everything in each of these key definitional elements. Finally is format. How do they want to see this information? They’ve disclosed two primary ways that they want the information to be provided to constituents, and those two format methodologies are a comprehensive machine readable file and a consumer friendly shoppable services disclosure, which could come through either a file itself, or a web tool.

On the machine readable file there are different components there that need to be met, and on the consumer friendly shoppable services there are different components that have to be met. We won’t go through detail here. There are reference points here that describe this, and again our point in bringing up some of these pieces today is to give in just a refresher for some of the requirements, and not to go through them all in great detail.

We did want to point out one thing though – on the machine readable file, and that is how this particular file should be structured. Some of the key questions that we get, really are with regard to this element. Given all of the different definitional components for the standard charge, and then also the definition of items and services, people have really wondered, “how do we actually put together this file in a meaningful way. Is it even possible to do so?”

So what we’ve done on this particular slide is illustrate the five different definitional elements of standard charge, as well as those four items and services, and provide where these elements kind of tied together, to be technically feasible, and where they are not technically feasible. CMS actually also supported this point. There was an MLN call in December, 2019 where they basically said, “We recognize it’s a challenge to consider the combination of some of these and so we will permit hospitals to structure their files in sort of sub-components, so long as those sub-components (or sub-worksheets, if you will), are still all contained within one machine readable file.

So, with that, many hospitals, and we, as a consulting firm, have structure these files in sort of multi-tabular or multi-component segments, because it’s difficult to actually structure these in a way that you could have one giant worksheet with lots of columns and lots of rows to accomplish the disclosure of each of these elements. The first is gross charge at the per-service unit level. We recommend that that is your CDM disclosure, so your gross charge disclosure at that service level. It really would look a lot like what you had for the FYI 19 disclosure requirements.

There are some additional components that have been requested. They are things like revenue code and HCPCS code which were not a part of the FY 19 requirements. So, you would now want to actually have those billing codes included in your disclosure for that particular component. The second area, or second worksheet really, for thinking about structuring the document this way would be your discounted cash price. Now, CMS has requested both a display of services and service packages. They’ve also requested professional fees to be provided. Recognizing that sometimes this discounted cash price information can really sort of go across all of those lines, you could provide that information in one distinct worksheet.

Then we started getting into some of the nuances and challenges to this file. The next piece is professional services and CMS has included the pro fees in the disclosure requirements they’d like to see, so long as, (and here’s the big caveat), so long as the professional services reflect employed professionals – so employed physicians and other kind of non-physician practitioners. If they are employed, CMS would like or would require that you disclose the rates for those individuals as well.

Now, there’s been a lot of ambiguity around this because CMS did not formally define what employment means. They said, “we choose not to define employment.” So, with that, a lot of folks around the industry have looked and said “gosh, if I don’t know what employment exactly means, I don’t know if my structure would support disclosing.” It’s a real, key point because, as we start to explore how hospitals have been complying, you’re going to see this reflected in the disclosure data very acutely. So, again, keep that point in mind.

The final elements all relate to the payment rates, and, again, this was the lightning rod in all of the requirements, disclosing these payor specific negotiated charges. Again, charge, in this instance, is not your list price. It is the rate which you’ve negotiated with your payors. Now, for this, they want to see this for services and service packages. What we recognize is, at the end of the day really, almost all of a payment environment, as it relates to our payors, is at the claim or aggregated level – this sort of “service package level.” Even, in some cases, for percentage charge contracts we see where the claim in its entirety is obviously being adjudicated, and you might have even different percentages or different carve outs that can apply.

That being the case, we believe that an encounter level view of this information, or a service package level view, is not only heavily supported by the rule, but also probably makes the most sense in terms of communicating this information. We’ll spend a little bit more time on this a little bit later in our day.

But it’s important to recognize how this file can be structured, and how each one of these components is really on its own, a distinct component because now, as we start to kind of move into how hospitals are complying. Recognizing these distinct components will really be critical as we look at who is disclosing which particular points. So with that, I’m actually going to turn our presentation over to Sean Gardner. Sean has been coordinating our firm’s review of these disclosure documents and has some really interesting research to share with you on how these, different components are being disclosed. So, I’ll turn it over to Sean now.

Sean Gardner: Thank you Jamie for the introduction. My name is Sean Gardner. I’m the Client Success Consultant here at Cleverley + Associates, and I conducted the research around Pricing Transparency at our firm. We looked at 137 health systems with 10+ hospitals within the health system itself, which represented 3,350 hospitals in total. The first thing that we’d like to take a look at is some of the insights that we found within the data when we conducted the research.

The Wall Street Journal recently published findings that many hospitals across the nation were hiding their transparency information from webpages, through search engines, by using blocking code. We did not experience that in our research. The way that we conduct our research was using the health systems webpage and their search engine itself. If there was a tab available within the web page that indicated a Pricing Transparency website, we would use that to find the files necessary for the data for the Pricing Transparency.

We will also use keywords to search within the system itself – keywords such as machine readable, pricing transparency, pricing, standard charges, and charges. I do find it interesting that we did experience some difficulty in finding the files, even with searching within the website.

Congress recently wrote a letter to the HHS through the Committee of Energy and Commerce that stated that it was difficult for consumers to access the pricing information. We did experience that in our searches as well. Sometimes, when we use keyword searches like machine readable, pricing transparency, or pricing, it would actually come up with a “no results found” on the website, which I did find interesting. It’s not to say that the information wasn’t there, because, through further research, I actually did find the information through the health system, so I’m not certain if the health system was actually blocking the information through their own webpage searches, or if it was just located in a different page. I did find that interesting to note.

We also found that the majority of systems did have pricing transparency dedicated pages. When we did find the pricing information, however, it was more common for it to be directed to the pricing tool for the consumer shoppable than it was for the machine readable. Some even often advertised that the machine readable file provided was going to be provided within the tool that they promoted, but it was not located within the tool itself. So, we did have some difficulty finding that information.

The next thing I’d like to talk about is some of the language that we actually found within the webpages around the machine readable files. About half of the files that we examined included some form of disclosure agreement prior to viewing the file. What this actually meant was we would have to read the disclosures, and then actually clicked accept before we could ever even view the machine readable file.

This was, again, about half of the hospitals that we examined would have us click the accept button. One system in particular required individuals to watch a video explaining what the CDM was and how pricing works prior to viewing the file. It was a very interesting video, but you actually had to watch the whole YouTube video before we could even click accept.

Most hospitals offered also some other form of price estimates for the potential patient. In addition, many hospitals used disclaimers to discourage the consumer to use the machine readable file for pricing information that itself, and would oftentimes direct them towards their patient financial services department or other lines to reach out for pricing estimates. Some of the examples that you’re seeing on your screen right now are from two hospitals in particular that we looked at.

You will see that one of them says that this is the hospital’s machine readable pricing file, but they strongly encourage the patient to use Ascension’s easy to use price estimator, available at their pricing estimator, ascension.org, to obtain pricing information. This is just one example that we saw where a hospital would try to encourage the patient to use a different format, other than other than a machine readable file, to receive the pricing information that they’re looking for.

Below you will see another example from Northwell Health, where they’re doing something very similar that Ascension was doing, where they noted the machine readable file and the information for the machine readable file is included below that, but that they would like them to actually view the charge information through their pricing estimator tool, or even reach out to them in particular for financial assistance. They also provide additional information that they want to make sure that they’re not using this information to confuse the users or to confuse the consumer on the pricing that is available within their system.

So, the key takeaway here is that we’ve noticed that it has become very important for hospitals to educate their patients or educate their consumers on the information that they are about to view and they oftentimes want to make sure that there’s other means available for them to get the information that they’re looking for.

So again, we looked at 137 health systems. Of those 137 health systems, we did identify 100 Pricing Transparency webpages available for those 137 health systems. So, what that means in particular is that there was a dedicated Pricing Transparency web page for those health systems, which we did find very friendly to the consumer that was viewing the information.

Of all the data files that we looked at for those 137 health systems, 40 of those actually met the requirements that CMS has set forth to include the data elements that need to be represented within the Price Transparency file. Again, those data elements are the gross charges, the discount cash pay policy. The deidentified mini and max, and also the negotiated payor rates.

Next we’d like to kind of take a look at how our research compared with others in the industry. So here we are taking a look at Kaiser, Health Affairs, Milliman, and Guidehouse. The research that was conducted by all these firms differed in methodology, and we’ll talk about that here in a moment, but the information down below with the percentages represented are representing those hospitals that are in full compliance with the CMS rule on Pricing Transparency. You can see that we have 29% of hospitals that we evaluated in full compliance. Kaiser is at 33%, Health Affairs at 22, Milliman at 68, and Guidehouse at 45%.

A little bit below here, in the box to the left, you’ll see what our research consisted of. Cleverley + Associates had 137 health systems, again representing that 3,358 hospitals. Kaiser Family Foundation had 102 hospitals. The way that they conducted their research is that they took the two largest hospitals in each state, DC included, and then Health Affairs with 100 largest hospitals across the nation. Milliman looked at 55 Health Systems representing 600 hospitals, and then Guidehouse had 1000 providers across 27 states.

Now, talking about the methodology that they followed – Milliman, in particular, their methodology was to evaluate whether or not the data elements were just present within the files themselves. So, when they view the files they’re seeing if the min and max, or if the discount cash policy was present. Health Affairs took more of a systematic approach when they evaluated this data. The way that they looked at the data was when they viewed the data, they looked at the validation of the data also. So was it actually representing what it was intended to represent?

Our approach was a hybrid approach. We did both. So, we looked at the data elements within the file itself and we also looked to see if it was being represented the way it was intended to be represented.

So, our results! We’re looking at the components that are being disclosed within the files. So of those 3,358 hospitals that we evaluated, 85% represented the gross charges within their machine readable file. 48% examined the discount cash price policy within their file, 40% for the deidentified min and max, and then 36% For payor-specific charges. We only found 4% of those files representing some level of proficiency, excuse me, professional charges as well. We have a note here that we believe the low professional percentage could be driven by the absence of a clear employee definition within the rule itself.

Next we’d like to take a look at what were the file types that we were seeing being used by the hospitals within this research. So, the largest percentage is represented by Excel. So that’s the Excel XLSXs. It represents the Excel files at 38%. 28% of those files were CSV. 12% were JSON. 11% or web or tool, and then 8% was text files, with the lowest at 3% being XML. So there’s obviously some wide variation as far as what file types hospitals are using to display this information.

Again, going back to the letter that Congress recently sent to the Department of Health and Human Services, I found this quote interesting. They said “some hospitals also are providing the data in a non-usable format or failing to provide the codes for items and services.” I think it’s pretty apparent what they mean by format or failing to provide codes for items and services, but what I find interesting is that they call out the hospitals or providing the data in a non-usable format. Without getting any more detail from Congress within that letter, we are left to assume that what they mean is that 11% as being represented by the web and tool format. Since the web and tool format is not machine readable, our assumption there is that may be what they are trying to identify that statement.

We also noted down below that even though a high number of hospitals are using similar formats data within still varies greatly, making data extrapolation and comparisons difficult. And this is something that we’ll evaluate further within Session Two of the Cleverley Summit. As far as how the comparisons, the data is moving forward.

We also looked at the consumer shoppable portion of the transparency regulation. And within this research we also looked at the same 137 Health Systems representing those 3,358 hospitals. What we ended up finding was that a total of 119 of them did comply with the consumer shoppable tool itself. I notated that there was 15 of them that did comply, but within those 15 there was only either one general payor category, or they actually required an email for the user to input, or there was no uninsured option at all, or there were other barriers of entry that we noticed when we’re trying to use a consumer shoppable tool.

So, obviously, the interpretation of their compliancy can still be left up in the air, given the, the regulations that we’re evaluating from CMS. But I just wanted to notate that  the 15 of those kind of represent a different category and how we saw the others responding.

Of those 119 We did find that 40 of those, to the same number that responded the machine readable file, did have compliancy as well. The disclosure type that we noticed with the consumer shoppable file was we had six that provided it with a downloadable file or a web page table. The vast majority of them, 113 of them, utilized a web based tool.

Some additional observations that we noted with the consumer stoppable research was that 90% of the tools in themselves use a CAPTCHA security coding to where it just makes sure that you’re an actual user prior to viewing the information and you’re not  a robot or an AI coming out to gather that information. Numerous facilities also had a member login, and then also a guest user access for pricing tools, more commonly that was associated with a My Chart. However, we did see it with other tools as well. Our assumption is that the information is the same. We just wanted to make sure that we call that out that, there was different login opportunities for users that were coming in to view this information.

We also had noticed that many of them asked for emails, but only a few required it. An example is down below of some of the patient information that one of these tools was asking the consumer to fill out. And even though we don’t believe that is not compliant for them to require the email in itself, it is in the spirit of the rule to make the information as accessible as possible to the consumer, with the fewest barriers of entry.

And so you can see over here to the left, the final rule and transparency requirement is that is prominently displayed on the hospital’s website, and to be accessible without charge, and without having to register or establish a user account or password. So, I think that the email requirement may be one of those gray areas, and as far as the spirit of the rule goes, maybe something further for hospitals to evaluate.

That is the research that we conducted. I hope you found the findings interesting. I am now going to turn it back over to Jamie to discuss, after we reviewed that information, how should we potentially change our compliance, moving forward.

Thank you.

Jamie Cleverley: Great. Thank you, Sean. I appreciate your sharing that research with us and, you know, maybe for many of you, as you were listening to that, you were starting to consider if that, you know, modified or changes the way that you’re approaching your current disclosure position. If that question did pop up in your mind as you were hearing some of those results, we want to share a little bit of additional context that might be helpful as you consider your next moves.

The first is really this fundamental understanding that enforcement really is coming. In fact, within the past several weeks, we’ve seen the first letters issued to hospitals that CMS audited and found it noncompliant, and we fully anticipate those efforts continuing. Now those hospitals will have 90 days to correct the areas of noncompliance before proceeding to additional corrective action and or civil monetary penalties. Again, we’re this has become really a bipartisan issue, we do anticipate enforcement to continue in the days and weeks ahead.

As you start to think about that and if maybe you’ve been sort of sitting a little bit on the sideline, waiting to kind of see how others approached the disclosure of this information, it might be helpful to sort of consider a couple key points. One is the accessibility of the information. Sean had mentioned that one of the challenges that we had was just being able to find the information on the hospital or health system websites. We’ve tended to kind of recommend a two-click rule of thumb, where, off of your homepage, it would take a user two clicks to be able to identify this information. If it’s getting kind of beyond that, more than likely, that could be a compliance risk for you because the information could be viewed as not being prominently displayed as the rule describles.

The other is really kind of – are all of the standard charge elements available. Do you have the payor-specific negotiated charge provided in that file. If there was one that we saw obviously that was least reported of all, it was that way.

In part, we believe that some of this is very understandable. This information is highly, highly sensitive, and in many cases has been protected by legal language contained within the contract. It’s untested in terms of our ability as an industry to release this information, and to know if we actually can do that. So again, very understandable that hospitals have been reluctant to put this information out there, recognizing that if their peers did or did not do it, it might put them at a certain level of risk. If their contracts had language in there that protected this information, and they did it, what does that mean in terms of a risk for them as well?

Knowing that enforcement is coming and seeing that more folks are beginning to put this information out there. Again, it very well may alter your position in terms of providing this information out to the community.

We also see some best practices, as we’ve been reviewing this information, and so we wanted to share those with you as you consider kind of your own disclosure methodology. The first is creating a dedicated Price Transparency page. Sean had mentioned that several systems actually had a landing page that would help orient consumers to the types of information that they would find there. You know, we believe that that was a really helpful step, not only in helping consumers understand the complexity of this information, but also really appropriately directing patients to the information that is going to be most germane to them and that is in that consumer shoppable tool.

So the example that we’ve provided there, it’s actually just coming from the disclosure solution that we’ve provided clients on that on that transparency solution. Really what we’ve tried to do there is make it very clear that this one is for patients, and the other is more oriented towards researchers, so trying to keep frustrations to a minimum for a patient accessing this gigantic machine readable file and not knowing how to make heads or tails out of it.

Another kind of point of emphasis that we saw was including disclaimer language for individuals viewing the required data. Sean brought up two health systems that had some language there and certainly we saw a number of others that really kind of thought through helping to have patients understand the strengths and then also the limitations of the data. Also, from a risk mitigation standpoint, not putting the hospital at undue risk for sharing some of that and having an expectation of how that information is going to be reviewed.

A third point is limiting requirements needed for patients to obtain a pricing estimate using that price estimator – certainly not having barriers to entry, not having undue hoops for folks to jump through, is something that should be considered. And then finally, considering the format that that payor-specific negotiated charge is provided in.

We really believe that an encounter-level view is very helpful. The view that we have illustrated here is coming from our consumer shoppable tool, where we’re viewing an ED visit, a level three Ed visit, and showing the associated charges that are also common with that, which is a requirement if the information is presented in a file format. It is not a requirement on the web display but we’ve chosen to provide that, because we do actually believe that there’s great value in showing these ancillary or supporting charges for patients to be able to get a get a greater sense of what their liability will be in their encounter with the hospital. Then, transitioning that over into how that, how those standard kind of gross charges will translate over into their payment, and then what their out of pocket will be based on the provisions that they put into place for their particular coverage.

So with that, again, just some things to be thinking about in terms of how you’re wanting to structure presenter information, making sure that if we’re thinking about best practice we’re trying to educate patients as much as possible, trying to give them a full look of what their encounter will be with the hospital, and then making this as easy to understand and access as possible as well.

So, we hope this information has been useful in terms of displaying or understanding how others have complied and some thoughts around how this might change your current disclosure position. Now what we want to do is begin to evaluate how this disclosed data is being used and we’ll dig into this question in our second session.

But the first thing that we want to do is give you an opportunity to take a quick break, and so we’ll, we’ll join you back in about 15 minutes to dive into the second question. Thank you so much for hanging with us this far.