Hospital develops a price transparency file based on CMS requirements

Client background

Our client is a community hospital located in southern California that serves a diverse and large local population and provides a wide range of medical services. To align with evolving federal regulations and uphold its mission of providing accessible, transparent care, the hospital sought Baker Tilly’s support to ensure compliance with the Centers for Medicare & Medicaid Services (CMS) hospital price transparency (HPT) requirements and maintain its reputation as a trusted healthcare provider while avoiding potential penalties. 

The business challenge

The hospital faced several challenges in complying with the updated price transparency regulations issued by the CMS. While the initial rule required hospitals to publicly disclose negotiated prices for common services and items, the updated requirements significantly expanded the scope to include all items and services provided by the hospital, not just those listed in the chargemaster. This expansion greatly increased the complexity of compliance, requiring hospitals to publish machine-readable files (MRFs) in a standardized CMS format, incorporating payer-specific negotiated rates along with new, more detailed data elements and specifications.  

With limited internal resources and expertise in navigating rapidly evolving regulations, the hospital faced the challenge of interpreting CMS guidelines while ensuring accurate representation of complex payer-provider arrangements. To address these complexities, the hospital engaged Baker Tilly to provide expert guidance in navigating the regulatory landscape and becoming compliant by the July 1 deadline. 

Strategy and solution

Baker Tilly provided tailored hospital price transparency compliance and advisory guidance to address the specific challenges effectively, including: 

• Regulatory interpretation: Provided tailored guidance on the requirements of the newly finalized CMS rule, leveraging our expertise to break down complex regulatory language into actionable steps to ensure accurate reporting of the hospital’s negotiated rates across its payer networks. This included addressing complex cases where arrangements did not align cleanly with CMS data file requirements. 
• Chargemaster Review: Conducted a comprehensive review of the hospital’s Charge Description Master (CDM), which serves as the foundation for billing, pricing transparency and compliance readiness. By validating the CDM, we were able to establish a reliable data source for creating compliant MRFs and shoppable services files, supporting the hospital’s goals of operational accuracy, transparency and strategic pricing. 
• MRF file compliance: Collaborated with the client to build a fully compliant Machine-Readable File (MRF) that included rates for all services provided by the hospital and adhered to the updated CMS requirements, helping the hospital avoid potential penalties and establish a foundation for long-term compliance. 
• Competitor benchmarking: Conducted a detailed analysis of reimbursement rates for top services from a specific payer, comparing them to competitor hospitals in the area. By leveraging competitor hospitals’ MRFs and payer data, we provided the hospital with a strategic understanding of its competitive positioning, enabling data-driven payer negotiations. 

Through a collaborative and client-centered approach, Baker Tilly empowered the hospital to navigate the complexities of the CMS price transparency rule with confidence. By conducting working sessions, we broke the intricate requirements into manageable components and developed a clear roadmap to achieve compliance by the July 1, 2024, deadline. This collaborative approach not only ensured the hospital met its immediate regulatory requirements but also equipped its team with the knowledge and processes needed to adapt to future changes, leaving them better prepared to meet future regulatory and patient expectations.