Relentless Health Value

On January 1, 2019, the Centers for Medicare and Medicaid Services (CMS) mandated that hospitals must publish their chargemasters. In case you’re unfamiliar, hospital chargemasters are the price lists, or the rack rates, that every hospital has in their billing office. If you talk to hospital CFOs, they will tell you that chargemaster prices serve as a starting point for negotiations with insurance carriers. In order for hospitals to get the highest possible price, their chargemaster price has to be higher than the highest rate any insurance carrier in their market would possibly pay. Because of this, the prices on them tend to be exorbitant. If you keep talking to a CFO, they may also tell you that the prices on the chargemaster don’t really matter because most people have insurance. The issue with this is chargemaster-based balanced billing: Patients without insurance, those who get out-of-network care, or those who haven’t met their deductibles yet may get charged a price based on the chargemaster rates. Medical bills are the #1 cause of bankruptcy in the United States. In 2018, for the first time, the average family paid more to hospitals than they did to the federal government in taxes. Chargemasters matter. At a minimum, they are the anchor for the negotiations that ensue. Today I speak to Caroline Znaniec from Luna Health. She offers some practical advice to help hospitals fix their chargemaster issues.

You can learn more at lunahca.com.

Caroline Znaniec, MBA, MS-HCA, is the founder and principal of Luna Healthcare Advisors LLC. Her boutique consulting group provides revenue integrity advisory services to other consultancies and large advisory firms, software companies and developers, and health system and physician providers. Caroline writes and speaks regularly on topics of revenue integrity for many nationally recognized professional associations, including the Association of Healthcare Internal Auditors (AHIA), American Health Information Management Association (AHIMA), Health Care Compliance Association (HCCA), Healthcare Financial Management Association (HFMA), and National Association of Healthcare Revenue Integrity (NAHRI). She has more than 20 years of industry experience, having worked with the nation’s top health systems and health care talent.

03:12 What a chargemaster is.
04:00 Why chargemaster pricing has become more complex and higher than any insurance is willing to pay.
05:37 The “self-pay” discount and why this is still problematic.
06:54 The justification for reducing chargemaster prices.
08:55 The intention behind requiring hospitals to publish their chargemasters.
10:33 CMS and creating more transparency and competition.
12:12 The conflicting incentives to keep chargemaster prices high.
14:46 Why this “baby step” is for the payers, not the consumer.
16:55 “The best thing that could happen next … you need to give a patient-friendly description.”
17:58 “Can you relate your charges to your cost?”
21:40 “Do your charges make reasonable sense?”
22:17 “Do I have varying charges for the same CPT code?”
23:14 “Do your charges reflect the intensity of the procedure?”
24:06 Charging for routine services and defining that.
25:25 “Chargeable items at the end of the day are … helping to diagnose or treat you.”
25:44 “Are your common items egregiously priced?”
29:26 “You’re not going to engage … your patient in that pricing transparency … until you get meaningful information out to them.”

You can learn more at lunahca.com.