Most hospitals aren't complying with price transparency rule
There is a lot of misunderstanding in this thread. I have a significant expertise on the price transparency rule and hospitals&#x27; responses to it, and will try to shed some light.<p>Disclosure&#x2F;source: I&#x27;m a former lawyer and the founder&#x2F;owner of ClearCare[0], a price transparency compliance platform for hospitals that&#x27;s purpose-built to help them solve exactly the requirements of this rule.<p>I&#x27;m actively seeking someone to take it over, as I recently got a once-in-a-lifetime opportunity to join a plant-based bacon company as a cofounder, and I&#x27;m taking it. I don&#x27;t want to shut ClearCare down, but I don&#x27;t have time to focus on it since the bacon company is growing so quickly.<p>I was actually pretty shocked to find so few HN-crowd startups tackling this. There&#x27;s some competition in the market but it isn&#x27;t very strong, and the distance to, at the minimum, a nice lifestyle-business that does a few hundred $k to a few million in ARR is pretty low.  It took about a year to get ClearCare where it is today.  The platform is written in React, uses Auth0 for auth, and is currently on Netlify. If you&#x27;re interested in running with it, please reach out - jared.hansen [ at ] clearcare dot io.<p>Also one other disclaimer: the following is an oversimplification. Obviously.<p>----------------<p><i>Background</i><p>The Affordable Care Act[1] (aka &quot;Obamacare&quot;), passed by Congress and signed by Pres Obama in 2010, required hospitals to “make public... a list of the hospital’s standard charges for items and services provided by the hospital,” and to update this list annually. The standard way hospitals met this rule was, for many years, to simply post a link to their chargemasters[2] -  which you can think of as, essentially, an almost aggressively user-hostile data dump of opaque billing codes and amounts that didn&#x27;t actually mean anything for patients.<p>In June of 2019, Pres Trump signed an executive order[3] requiring the Dept of HHS to create new regulations that would more clearly codify the requirement.  HHS&#x27; sub-agency CMS created a draft rule in September of 2019, which became final around 14 months later.<p>The AHA sued to block the rule but lost, and the compliance requirement has been live since January 1 of this year.<p>There are many reasons the Chargemaster rate bears little resemblance to the rate paid by any actual patients, medicare reimbursement rules chief among them. Too much to go into here.<p>So what <i>does</i> the rule actually require?<p><i>The Rule</i><p>In short, hospitals must post two things:<p>(1) a list of Standard Charges (i.e., the chargemaster), for everything. This has to include negotiated rates with each payer (E.g.: Blue Cross pays 7500 for a given kind of knee surgery; Aetna pays 562;  United Health pays 812), and the cash discount rate, if any.  One thing that&#x27;s interesting about this list (and overlooked, frankly, by most of the providers in the space) is that it is described by CMS as a &quot;machine-readable file&quot; - and they give examples as CSV, JSON and XML. Historically, hospitals would post chargemasters often as PDF(!), sometimes XLS, txt, csv, god knows what all -- but CMS is trying to move toward a world where you can create an API on top of all of the data and build more of the &quot;kayak for healthcare&quot; tools that the industry has been trying (and failing) to build for so long.<p>(2) for 300 procedures designated as &quot;shoppable services&quot; (meaning: can be scheduled in advance, and patients might want to shop around), a &quot;user-friendly&quot;, &quot;searchable&quot; and generally better-designed disclosure of prices and various other information about the services.  CMS designated 70 of these, and hospitals choose the other 230.<p>*THAT&#x27;S IT.*
Contrary to popular belief, especially elsewhere ITT, the rule does not require hospitals to provide the kind of price transparency you see elsewhere in life. You just have to post certain kinds of data in certain formats. It&#x27;s not actually that hard, but it&#x27;s pretty hard for hospital IT departments to do on their own -- especially IT departments that don&#x27;t really exist, because they&#x27;re at small hospitals with small budgets.<p>=======<p><i>Misunderstandings ITT</i><p><i>Myth: &quot;The price transparency rule requires hospitals to explain what things cost for patients&quot;</i><p><i>Reality:</i>
The price transparency rule requires hospitals to list the &quot;standard&quot;, or &quot;chargemaster&quot; price, along with the &quot;negotiated rate&quot; the hospital has reached with each payer.<p><i>Myth: $300&#x2F;day is nothing to hospitals</i><p><i>Reality</i>: that&#x27;s true for large hospital systems maybe, but there are &gt;2k small, rural hospitals that the rule still applies to, regardless of their tiny budgets. For these hospitals, 109k&#x2F;year is a lot of money (incidentally: this also means that spending say 10k&#x2F;yr on price transparency saas is a lot more attractive than doing nothing and paying the fine).  Moreover:<p><i>Myth: the fine is the only penalty for noncompliance</i><p><i>Reality:</i> CMS has indicated stronger penalties will come if compliance does not increase, including impact on the medicare reimbursement rate, which is a core driver of hospital revenue.  Hospitals do have good reason to try to comply, and many of the larger ones are already doing so.  In fact, the data show that the larger hospitals are much more likely than smaller ones to be compliant at this time.<p><i>Myth: this is way too hard </i><p><i>Reality</i>: If complying with the rule meant you had to figure out what every patient was going to pay in advance, then yeah, it would be largely impossible right now, for reasons adequately documented elsewhere in this thread. But that&#x27;s not what it requires. You can comply by posting a very specific, pretty well-understood set of information, which consists largely of a transform on information that each hospital absolutely already has.<p>----<p>I started ClearCare basically the day I read the Trump executive order, because within an hour of hearing about it, it was obvious to me that either 6k+ hospitals would have to do a bunch of bespoke web design to comply, OR there would be a pretty straightforward SaaS platform that would do it for them, and that there was good opportunity in building that platform. I still believe this, and if I weren&#x27;t busy taking orders for plant-based bacon I&#x27;d be recruiting instead of looking for someone to hand it off to.  Call me if you want to talk.<p>---------<p>[0] <a href="https:&#x2F;&#x2F;www.clearcare.io" rel="nofollow">https:&#x2F;&#x2F;www.clearcare.io</a>  -- and there&#x27;s a corporate deck here: <a href="https:&#x2F;&#x2F;www.beautiful.ai&#x2F;player&#x2F;-McFhWCjOS_FBay_aAy3" rel="nofollow">https:&#x2F;&#x2F;www.beautiful.ai&#x2F;player&#x2F;-McFhWCjOS_FBay_aAy3</a><p>[1] <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Affordable_Care_Act" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Affordable_Care_Act</a><p>[2] <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Chargemaster" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Chargemaster</a><p>[3] <a href="https:&#x2F;&#x2F;nationalhealthcouncil.org&#x2F;blog&#x2F;blog-president-trumps-executive-order-pricing-transparency&#x2F;" rel="nofollow">https:&#x2F;&#x2F;nationalhealthcouncil.org&#x2F;blog&#x2F;blog-president-trumps...</a> - note the text of the order is no longer available on the whitehouse site, but this is a decent summary.