PARA HealthCare Analytics weekly eJournal December 24, 2019 by CorroHealth

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D ecember 24, 2019

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NEWS FOR HEALTHCARE DECISION MAKERS

CHRISTMAS ISSUE

CMS TO REPAY "EXCEPTED' OFF-CAMPUS REIMBURSEMENT CUT CMS WORKS TO EASE RAC AUDIT BURDEN: REDUCE DENIAL BACKLOG MLN CONNECTS NEWSLETTER

Clarifying Price Transparency

Q2 2019 CMS DATA NOW AVAILABLE IN PDE

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The number of new or revised Med Learn articles released this week.

Administration: Pages 1-32 HIM /Coding Staff: Pages 1-32 Outpatient Svcs: Pages 2, 12 Finance: Pages 2,4,21 Compliance: Pages 4,11,14

The number of new or revised Transmittals released this week.

DM E: Page 8 Hospice: Page 8 PDE Users: Page 21 Providers: Pages 2,8,9,21,26 FQHCs: Page 26

PARA Weekly eJournal: December 24, 2019

CMS TO REPAY "EXCEPTED" OFF-CAMPUS REIMBURSEMENT CUT

On December 12, 2019, CMS announced that its MACs will re-process 2019 hospital claims paid at a discount for ?excepted? off-campus provider based department visits. Excepted clinics report modifier PO on all HCPCS performed at that location. The re-processed claims will restore reimbursement for ?excepted? off-campus locations (those which were established before November 2, 2015) to full on-campus reimbursement. No provider action is necessary. Beginning in 2019, CMS reduced reimbursement on HCPCS G0463 paid to ?excepted? off-campus provider based clinics to 70% of the rate paid for an on-campus visit. The AHA filed a lawsuit challenging Medicare?s authority to impose the reduced reimbursement, and CMS lost. Although it will appeal the decision, and although CMS still plans to cut reimbursement even further (to 40%) in 2020, it is complying with the US District Court instruction to immediately cease the payment reduction for 2019. The CMS announcement was slipped into the weekly MLN Connects newsletter on Thursday, December 12, 2019 without fanfare: https://www.cms.gov/files/document/2019-12-12-enews?utm_source= newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

PARA Weekly eJournal: December 24, 2019

CMS TO REPAY "EXCEPTED" OFF-CAMPUS REIMBURSEMENT CUT

An off-campus clinic established before November 2, 2015 is ?excepted?, i.e. grandfathered, and must report modifier PO on all HCPCS performed at that location. Reimbursement for HCPCS G0463 had been reduced in 2019 to 70% of the regular OPPS rate, and in 2020 it will be further reduced to 40%. CMS plans to impose the 60% reduction to the on-campus rate for G0463 in 2020 as it appeals the decision of the District Court. Reimbursement for G0463-PO in 2019 was reduced by 30% to 70% of the allowable for 2019; the difference of $34.75 (at the national unadjusted rate) per G0463-PO in 2019 will be paid when the claims are reprocessed: - G0463-PO @ 2019 discounted rate: $115.85 @ 70% = $81.10

However, in 2020, CMS will pay G0463-PO at only 40% of the on-campus rate while it appeals the decision of the court. G0463-PO @ 2020 discounted rate: $115.92 @ 40% = $46.37

PARA Weekly eJournal: December 24, 2019

CMS WORKS TO EASE RAC AUDIT BURDEN: REDUCE DENIAL BACKLOG

ong a thorn in the side of hospitals nationwide, the Centers for Medicare and Medicaid Services?(CMS) Recovery Audit Contractor (RAC) program recently underwent substantial changes which CMS say will make the audit process significantly less burdensome for providers.

The RAC program? one of several Medicare payment oversight initiatives? was launched in 2009 and relies on third-party contractors to uncover and correct improper Medicare fee-for-service payments through post-payment claims reviews. RACs identified approximately $89 million in overpayments and recovered $73 million in FY 2018.1 Since its inception, the RAC program has returned more than $10 billion in improper payments to the Medicare trust fund and more than $800 million in underpayments to providers.2 RAC audits typically involve automated claim reviews utilizing computers to detect improper payments, as well as complex reviews that incorporate human analysis of medical records and other documentation. The process has long been a target of ire for the American Hospital Association (AHA) and others in the industry due to the disruption, cost and uncertainty that can accompany a RAC audit for a target hospital. Fewer audits, more transparency In announcing changes to the RAC process earlier this year, CMS Administrator Seema Verma acknowledged the agency had received numerous complaints about the program in the past.3 ?Providers found the audits time-consuming, necessitating high administrative expenses, and often requiring lengthy appeals,? Verma said. ?Thanks to recent efforts by this Administration, complaints about RACs have decreased significantly. CMS listened to what providers were telling us and we made meaningful changes.?4

PARA Weekly eJournal: December 24, 2019

CMS WORKS TO EASE RAC AUDIT BURDEN: REDUCE DENIAL BACKLOG

Modifications aimed at making the RAC process easier for providers include:5 - RACs could previously select a certain type of claim to audit. They must now audit proportionately to the types of claims a provider submits - Instead of treating all providers the same, RACs are conducting fewer audits of providers with low claims denial rates - Providers have more time to submit additional documentation before being required to repay a claim. A 30-day discussion period, after an improper payment is identified, means that providers do not have to choose between initiating a discussion and filing an appeal - CMS is now seeking public comment on newly proposed RAC areas for review before the reviews begin. According to the agency, this allows providers to voice concerns regarding potentially unclear policies that will be part of the review Among the CMS program changes designed to hold RACs more accountable:6 - RAC provider portals are being enhanced to make it easier for providers to understand the status of claims - RACs that fail to maintain a 95% accuracy score will receive a progressive reduction in the number of claims they?re allowed to review - RACs that fail to maintain an overturn rate of less than 10% will also see a reduction in the number of claims they can review - RACs will not receive a contingency fee until after the second level of appeals is exhausted. Previously, RACs were paid immediately upon denial and recoupment of the claim. This delay in payment helps assure providers that the RAC?s decision was correct before they?re paid, according to CMS Tracking RACs The AHA closely monitored the RAC program between 2014 and 2016. According to the AHA?s final RAC report, 60% of claims reviewed by RACs in the third quarter of 2016 were found not to have an overpayment.7 Hospitals appealed 45% of all denials, with 27% of hospitals reporting having a denial reversed in the discussion period.8 AHA also disclosed that 43% of hospitals spent over $10,000 to manage the RAC process during Q3 2016, while 24% spent more than $25,000 and 4% spent over $100,000.9 5

PARA Weekly eJournal: December 24, 2019

CMS WORKS TO EASE RAC AUDIT BURDEN: REDUCE DENIAL BACKLOG

Driving down the denial backlog In recent years, denials initiated due to RAC audits have contributed to a massive backlog of Medicare appeals, the number of which totaled 426,594 in November 2018.10 In response to a lawsuit brought by AHA and others, the Department of Health and Human Services (HHS) was ordered last year to eliminate the backlog by the end of the 2022 fiscal year.11 As a result of the order, the backlog had been reduced by 25%, or 108,340 appeals, by the end of Q3 2019, according to AHA, bringing the total down to 318,254.12 AHA and others sued HHS in 2012 for noncompliance with a statutory requirement that decisions on appeals at the administrative law judge level be made within 90 days.13 According to CMS, the average processing time for appeals was 1,361 days in FY 2019, up from 1,193 days in 2018 and 94 days in 2009, the year the RACs program was launched.14 RAC tactics In anticipation of an increase in RAC activity? and because CMS Administrator Verma noted that RACs will henceforth be guided by the volume of claims a provider submits? some experts are zeroing in on claims that may represent large-volume risk areas for hospitals. Among these, according to the John Hall, MD, writing in RACmonitor publication, are observation claims. ?There are two types of potential observation denials,? Hall wrote.15 ?The first is denials based on the failure to document the essential elements of observation services. The second is based on observation claims that should have been inpatient.? Hall suggested asking a series of questions about each observation claim in preparation for a possible review:16 - Does the documentation indicate what is being treated, assessed and reassessed? - Is there documentation of ongoing treatment, assessment and reassessment, or is the patient being seen once a day?

Hall su ggest ed ask in g a ser ies of qu est ion s abou t each obser vat ion claim in pr epar at ion f or a possible r eview.

- Does the documentation indicate what parameters might trigger admission ?for further treatment,? or if the patient might be discharged from the hospital? ?Implicit in observation services, for the purposes of reimbursement, is a decision related to admission or discharge,? Hall wrote. ?If the record does not delineate CMS?criteria, then observation reimbursement might be jeopardized.?17

PARA Weekly eJournal: December 24, 2019

CMS WORKS TO EASE RAC AUDIT BURDEN: REDUCE DENIAL BACKLOG

According to Hall, other potential risk areas, based on the new RAC guidance, include:18 - Diagnostic or therapeutic services with documentation requirements - One-midnight inpatient surgical procedures - Observation services in the perioperative period - Inpatient care for traditionally outpatient services - NCD and LCD compliance A comprehensive coding, claims and revenue cycle solution Meeting the challenges of Medicare claims compliance and overall revenue cycle management requires systematic approaches grounded in empirical evidence and a capable staff delivering proven solutions. Healthcare Financial Resources (HFRI) can help you significantly refine your coding, AR recovery and resolution, and denial management processes. We can also help you minimize the risk of a RAC audit, while ensuring you?re in a position to respond promptly and effectively if one occurs. Contact us today to learn more about how we can help your organization secure its financial foundation.

1 Seema Verma, ?Recovery Audits: Improvements to Protect Taxpayer Dollars and put Patients over Paperwork,? CMS.gov, May 2, 2019 2 ?A History of the RAC Program,? MedicareIntegrity.org, 3 Seema Verma, ?Recovery Audits: Improvements to Protect Taxpayer Dollars and put Patients over Paperwork,? CMS.gov, May 2, 2019 4 Ibid. 5 Ibid. 6 Ibid. 7 ?Exploring the Impact of the RAC Program on Hospitals Nationwide,? American Hospital Association, Dec. 5, 2016 8 Ibid. 9 Ibid. 10 Jacqueline LaPointe, ?Court Orders HHS to Eliminate Medicare Appeals Backlog by 2022,? RevCycle Intelligence, Nov. 13, 2018 11 Ibid. 12 ?As a result of AHA lawsuit, HHS continues to reduce appeals backlog,? press release, American Hospital Association, Sept. 30, 2019 13 Jacqueline LaPointe, ?Judge Asks AHA to Develop Medicare Appeals Backlog Solutions,? RevCycle Intelligence, April 4, 2018 14 ?Average Processing Time By Fiscal Year,? Office of Medicare Hearings and Appeals, HHS 15 John K. Hall, ?Level of Concern Rises as RACs are Back,? RACmonitor, July 24, 2019 16 Ibid. 17 Ibid. 18 John K. Hall, ?Level of Concern Rises as RACs are Back: Part II,? RACmonitor, July 31, 2019

PARA Weekly eJournal: December 24, 2019

MLN CONNECTS PARA invites you to check out the mlnconnects page available from the Centers For Medicare and Medicaid (CMS). It's chock full of news and information, training opportunities, events and more! Each week PARA will bring you the latest news and links to available resources. Click each link for the PDF!

Thursday, December 19, 2019 New s

· DMEPOS: Changes to Conditions of Payment Reduce Burden · DMEPOS Competitive Bidding Surveys: Comment by December 20 · Mohs Microsurgery: Comparative Billing Report in December · Hospice Provider Preview Reports: Review Your Data by January 15 · Hospice Providers: Volunteer for Alpha Testing of HOPE Assessment Instrument · LTCH Compare Refresh · IRF Compare Refresh · 2020 Eligible Clinician Electronic Clinical Quality Measure Flows

· Medicare Diabetes Prevention Program: Become a Medicare Enrolled Supplier Com plian ce

· Provider Minute Video: The Importance of Proper Documentation Claim s, Pr icer s & Codes

· Payment for Outpatient Clinic Visit Services at Excepted Off-Campus Provider-Based Departments: Updated Even t s

· Mohs Microsurgery: Comparative Billing Report Webinar ? January 7 · ESRD Quality Incentive Program: CY 2020 ESRD PPS Final Rule Call ? January 14 8

SPECI AL

PARA Weekly eJournal: December 24, 2019

Decem ber , 2019

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Clarifying Price Transparency

Answers, Explanations From the And Help experts at 9

PARA and HFRI

PARA Weekly eJournal: December 24, 2019

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Hospit al Pr ice Tr an spar en cy Requ ir em en t s CY 2020 Hospit al Ou t pat ien t Pr ospect ive Paym en t Syst em Policy Ch an ges On November 15, CMS finalized policies that lay the foundation for a patient-driven health care system by making prices for items and services provided by all hospitals in the United States more transparent for patients so that they can be more informed about what they might pay for hospital items and services. In this special edition, the experts at PARA Healt h Car e An alyt ics help you navigate the sometimes confusing maze of Price Transparency. We explain the new requirements and introduce you to the products and services available to you . We can ensure your hospital is compliant and that your information is relevant and accurate. 10

PARA Weekly eJournal: December 24, 2019

PRESENTATION ON PRICE TRANSPARENCY On Decem ber 3, 2019 CM S h eld an edu cat ion al con f er en ce call an d pr esen t at ion cover in g t h e Hospit al Pr ice Tr an spar en cy Fin al Ru le. CMS finalized policies that lay the foundation for a patient-driven health care system by making standard charges for items and services provided by all hospitals in the United States more transparent. During this call, learn about provisions in the final rule effective January 1, 2021, including: - Requirements for making public all standard charges for all items and services in a machine-readable format - Requirements for displaying shoppable services in a consumer-friendly manner - Monitoring and enforcement

See t h e slides u sed du r in g t h e pr esen t at ion by click in g t h e icon t o t h e lef t .

Hear t h e r ecor ded pr esen t at ion by click in g t h e icon t o t h e r igh t .

PARA Weekly eJournal: December 24, 2019

NEW FINAL RULES: GET THE FACTS

n ew f i n a l r ul es f a c t sh eet s a v a i l a b l e h er e

See full version on next page.

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Click Her e 12

PARA Weekly eJournal: December 24, 2019

NEW FINAL RULES: GET THE FACTS

On November 15, 2019, the Centers for Medicare & Medicaid Services (CMS) finalized policies that follow directives in President Trump?s Executive Order, entitled ?Improving Price and Quality Transparency in American Healthcare to Put Patients First,? that lay the foundation for a patient-driven healthcare system by making prices for items and services provided by all hospitals in the United States more transparent for patients so that they can be more informed about what they might pay for hospital items and services. The policies in the final rule will further advance the agency?s commitment to increasing price transparency. It includes requirements that would apply to each hospital operating in the United States. This fact sheet discusses the provisions of the final rule (CMS-1717-F2), which can be downloaded from the Federal Register at: https://www.hhs.gov/sites/default/files/cms-1717-f2.pdf.

f ul l v er si o n 2020 o pps r ul e

Increasing Price Transparency of Hospital Standard Charges On June 24, 2019, the President signed an Executive Order on Improving Price and Quality Transparency in American Healthcare to Put Patients First noting that it is the policy of the Federal Government to increase the availability of meaningful price and quality information for patients. The Executive Order directed the Secretary of Health and Human Services (HHS) to propose a regulation, consistent with applicable law, to require hospitals to publicly post standard charge information.[1] We believe healthcare markets work more efficiently and provide consumers with higher-value healthcare if we promote policies that encourage choice and competition.[2] In short, as articulated by the CMS Administrator, we believe that transparency in health care pricing is ?critical to enabling patients to become active consumers so that they can lead the drive towards value.?[3] This final rule implements Section 2718(e) of the Public Health Service Act and improves upon prior agency guidance that required hospitals to make public their standard charges upon request starting in 2015 (79 FR 50146) and subsequently online in a machine-readable format starting in 2019 (83 FR 41144). Section 2718(e) requires each hospital operating within the United States to establish (and update) and make public a yearly list of the hospital?s standard charges for items and services provided by the hospital, including for diagnosis-related groups established under section 1886(d)(4) of the Social Security Act. 13

PARA Weekly eJournal: December 24, 2019

CMS: WHAT'S NEXT?

Pricing Transparency What's Next?

CMS started introducing pricing transparency guidelines in 2015 when it required hospitals to provide a list of standard charges upon request. However, it wasn?t until the 2019 final rule that they required hospitals to publish standard charges in a frequently updated, machine-readable format, online. The President?s Executive Order in June 2019 promoted increased availability of meaningful pricing information for patients. Therefore, CMS?FY2020 Proposed Rule (https://s3.amazonaws.com/public-inspection.federalregister.gov/2019-25011.pdf) attempted to further define hospitals, standard charges, and items and services. Although it continues to call for standard charges in a machine-readable format, it also requested payer-negotiated rates for charges and a separate list of ?shoppable? services including 230 hospital-selected and 70 CMS-selected services. The rule also outlined monitoring and enforcement including a monetary penalty and corrective action plans from hospitals. It is important to note that some states have been requiring a version of this rule for many years (except for the payer specific charges component). For example, states like California, Colorado, and North Carolina, among others, have required annual posting of chargemasters, a selection of hospital financial reports, and a listing of common14procedures, for years.

PARA Weekly eJournal: December 24, 2019

CMS: WHAT'S NEXT?

The American Hospital Association (AHA) soundly opposed the rule as it was written - (https://www.aha.org/news/headline/2019-09-27 -aha-comments-opps-proposed-rule-cy-2020). In fact, of the 66 pages of comments on the proposed rule, 20 pages were devoted to the proposed Pricing Transparency guidelines outlined in the rule. Their belief is that this approach would only further confuse patients in their search for information and would disrupt contract negotiations between payers and hospitals. The AHA mentions many legal and operational challenges, even citing First Amendment rights and anti-trust, anti-competition challenges. We know that hospitals are operating on very thin margins and that threatening health plan competition in the marketplace may be detrimental to providers. Additionally, operationalizing this request is a sizable ask of the Finance and IT teams at hospitals. In the originally released Final Rule, CMS postponed a response/decision on this component of the proposed rule. However, on November 15th, they released comments and final action which is expected to be implemented on January 1, 2021. (https://s3.amazonaws.com/public-inspection.federalregister.gov/2019-24931.pdf) The CMS Fact Sheet regarding the new rule (https://www.cms.gov/newsroom/fact-sheets/cy-2020-hospital-outpatient-prospectivepayment-system-opps-policy-changes-hospital-price) highlights the following information: Hospital price transparency final rule for FY2021 includes the following components: 1) Hospitals post the "standard charges" online in a machine-readable file. According to the updated definition outlined by CMS, standard charges include all items and services, including supplies, facility fees and professional charges for employed physicians and other practitioners. The following data points are required: - gross charges ? chargemaster price - discounted cash prices ? self-pay/cash price - payer-specific negotiated charges ? hospital-negotiated price by third party payer - de-identified minimum negotiated charges ? lowest third-party payer negotiated price - de-identified maximum negotiated charges ? highest third-party payer negotiated price 2) Hospitals publish 230 hospital-selected and 70 CMS-selected "shoppable services" including payer-specific negotiated rates online in a searchable and consumer-friendly manner. 3) Hospitals that fail to publish the negotiated rates online could be fined up to $300 per day. The positive news from the November 15th announcement is that CMS is now planning to hold health insurance companies responsible for providing a level of transparency to pricing, as well. According to the proposed rule: - Health insurance companies and group health plans required to disclose on a public website their negotiated rates for in-network providers and allowed amounts paid for out-of-network providers. Focused on promoting competition, driving innovation and supporting price-conscious decision-making, according to the CMS fact sheet on the proposed rule - Health insurers required to offer a transparency tool to provide members with personalized out-of-pocket cost information for all covered services in advance. For more information on how PARA Solutions can support your journey to Pricing Transparency, please contact your PARA Account Executive. 15

PARA Weekly eJournal: December 24, 2019

SPECIAL

All Eyes On Pricing Transparency Like it or not, pricing transparency has moved to the forefront of healthcare reform efforts. That means hospitals must be ready to make detailed price information available for consumers interested in shopping procedures and services. Yet it?s no secret transparency is a double-edged sword. Publicizing pricing information before an organization has made sure its prices are rational, competitive and defensible can damage a hospital?s brand and undermine the bottom line. The good news is that capabilities now exist to help hospitals develop comprehensive, market-based pricing strategies that allow them to optimize margins while remaining competitive with local and regional peer organizations. This pricing data can then be shared publicly in easy-to-use formats and harnessed to accurately convey patient payment responsibilities.

Government pressure Price transparency has been one of the most talked-about healthcare reform objectives for a decade or more. Much of this emphasis has been fueled by the continued growth of high deductible insurance plans. Proponents say consumers need, and expect, detailed price information to be sure they?re getting the most for their hard-earned healthcare dollars. Policymakers also believe transparency will spur provider competition and help drive down costs. But with much of the industry?s attention focused elsewhere in recent years ? notably on the implementation of value-based reimbursement models ? transparency has taken a back seat. In fact, the percentage of hospitals unable to provide price information increased between 2012 and 2016, from 14 percent to 44 percent.[1] That?s likely to change, however, now that the government has signaled it?s serious about making hospital pricing information more accessible to all. In January 2019, the Centers for Medicare and Medicaid Services (CMS) announced a rule mandating that hospitals post their standard charges, or chargemaster, online. CMS then upped the ante in July of this year with a proposed rule that would require hospitals to post not just the often-inflated numbers of the chargemaster but also typically confidential information showing actual negotiated rates by payer and plan for specific procedures and services.

PARA Weekly eJournal: December 24, 2019

SPECIAL

Failure to comply with the rule, which is scheduled to take effect on Jan. 1, 2020, could result in civil monetary penalties of up to $300 per day. Hospitals could also be subject to audits and corrective action plans if they fail to disclose negotiated rates.[2] Both hospital and insurance groups are vehemently opposed to the requirement that negotiated rates be made public. They argue that publicizing the information could inhibit competition, increase the administrative burden for hospitals, increase costs and reduce access to care.[3] As a result, the rule is expected to trigger a number of legal challenges, and whether it will take effect in January remains to be seen. But if the past is any prologue, government healthcare reform efforts ? regardless of their popularity ? eventually find their way into the market, in one fashion or another.

Peer analysis That?s why forward-thinking hospitals would do well to begin developing their own transparency strategies. Before this can happen, though, it?s essential that organizations are fully confident the numbers they?re prepared to share publicly make economic sense and are justifiable when it comes to peer pricing. Healthcare Financial Resources (HFRI) has developed a comprehensive process to help hospitals create rational pricing models built around cost, reimbursement and peer pricing data. The effort begins with a review of existing pricing information across all hospital revenue streams, including room rates, emergency visits, diagnostic and therapeutic procedures, operating room, anesthesia, PACU, pharmacy and medical supplies. Once this baseline information is established, HFRI will compare service line and procedure prices against equivalent pricing from a designated group of peer institutions. The latter information is acquired through review of the most recent quarterly Inpatient and Outpatient Standard Analytic File (SAF) data generated by the Centers for Medicare and Medicaid Services (CMS). Using these comparisons, hospitals can see exactly how their pricing stacks up against specific facilities and also against averages for the entire group. Quantifying in percentage terms the extent to which the price for a particular service or product deviates from the group average enables hospitals to quickly spot opportunities for increasing prices while still remaining competitive. Conversely, HFRI can also flag any instances in which an organization?s high prices represent over-market outliers.

All Eyes On Pricing Transparency

PARA Weekly eJournal: December 24, 2019

SPECIAL

The right prices Armed with this data, HFRI pricing experts work alongside the hospital?s financial management team to establish specific pricing targets and timelines based on the opportunities presented. These calculations will also take into account contractual reimbursement rates to ensure the new prices are consistent with payer policies. Likewise, HFRI can help develop effective strategies for areas or services that require pricing sensitivity. For example, an organization may want to keep prices at, near or even below cost for some services to remain competitive with independent, free-standing facilities. Importantly, the pricing developed through HFRI?s rational pricing model is competitive with peer pricing and therefore both defensible and supportive of an effective consumer-facing transparency strategy.

A comprehensive solution Meeting the challenges of pricing transparency demands a systematic approach grounded in empirical evidence and a capable staff implementing proven solutions. HFRI can help you refine your pricing to improve revenue capture and strengthen margins while remaining competitive in your market. Contact us today to learn more about how we can help your organization prepare for the transparency transformation ahead. [1] Tony Abraham, ?No way to enforce hospital price transparency rule, CMS says,? Healthcare Dive, Jan. 11, 2019. [2] Jacqueline LaPointe, ?Proposed Hospital Price Transparency Rule Faces Industry Criticism,? RevCycle Intelligence, Aug. 5, 2019. [3] Ibid.

Catch up on other HFRI Blog entries by clicking here

All Eyes On Pricing Transparency 18

PARA Weekly eJournal: December 24, 2019

SPECIAL Th e Execu t ive Or der

Trump Administration Announces Historic Price Transparency Requirements to Increase Competition and Lower Healthcare Costs for All Americans Two regulations advance the Trump Administration?s commitment to increasing price transparency As directed by President Trump's Executive Order on Improving Price and Quality Transparency in American Healthcare, today the Department of Health and Human Services is announcing that the Centers for Medicare & Medicaid Services (CMS) is issuing two rules that take historic steps to increase price transparency to empower patients and increase competition among all hospitals, group health plans and health insurance issuers in the individual and group markets. One of the rules is the Calendar Year (CY) 2020 Outpatient Prospective Payment System (OPPS) & Ambulatory Surgical Center (ASC) Price Transparency Requirements for Hospitals to Make Standard Charges Public Final Rule. The second rule is the Transparency in Coverage Proposed Rule. Both the final and proposed rules require that pricing information be made publicly available. "President Trump has promised American patients 'A+' healthcare transparency, but right now our system probably deserves an F on transparency. President Trump is going to change that, with what will be revolutionary changes for our healthcare system," said HHS Secretary Alex Azar. "Today's transparency announcement may be a more significant change to American healthcare markets than any other single thing we've done, by shining light on the costs of our shadowy system and finally putting the American patient in control." Consistent with the Executive Order on price and quality transparency, the Trump Administration is taking action toward making sure that insured and uninsured Americans alike have the information necessary to get an accurate estimate of the cost of the healthcare services they are seeking before they receive care. "Under the status quo, healthcare prices are about as clear as mud to patients," said CMS Administrator Seema Verma. "Thanks to President Trump's vision and leadership, we are throwing open the shutters and bringing to light the price of care for American consumers. Kept secret, these prices are simply dollar amounts on a ledger; disclosed, they deliver fuel to the engines of competition among hospitals and insurers. ...... This will make previously unavailable price information accessible to patients and other stakeholders in a standardized way, allowing for easy comparisons....

Read the full text and the final rule by clicking on the documents.

PARA Weekly eJournal: December 24, 2019

ContacttheExperts What We Offer

Pricing Transparency Tool Compliance Review San dr a LaPlace Account Executive 800.999.3332 Extension 225

Market Based Pricing Charge Quote

slaplace@para-hcfs.com

Violet Ar ch u let -Ch iu Senior Account Executive 800.999.3332 Extension 219 varchuleta@para-hcfs.com

PARA Weekly eJournal: December 24, 2019

Q2 2019 CMS DATA NOW AVAILABLE IN PDE

PARA HealthCare Analytics, Inc. prides itself at being a proven resource for contract management services, pricing data, charge master coding, compliance, billing, reimbursement, and web-based solutions. Our mission is to provide a value-based solution that supports the revenue cycle process, to be recognized as an industry leader in delivering value and measurable results, and to lead the healthcare market in improving financial management in the delivery of care. In order to do this, PARA collects data from a variety of sources and processes it so that it is useful for financial analysis and User interface. PARA knows every price for every CPTÂŽ/HCPCS Code for every hospital in the US. PARA gathers this information from the Medicare claims data files which includes the following data: - Inpatient Room Rates and DRG Charges - Outpatient Hospital Charges by CPTÂŽ/HCPCS - Inpatient/Outpatient Migration Data by Patient County - Diagnoses by Emergency Room Visit - Skilled Nursing Facility/Long Term Care Hospital Claims Data - Ambulatory Surgery Center Case Charges - Independent Testing Facility Charges - Freestanding Laboratory Charges - Clinic Charges (Professional and Technical) - Physician Charges by NPI The following pages outline the various sources of pricing data, components of the data, timing of data availability, processing of data, and the reports available to PARA Data Editor (PDE) users. https://para-hcfs.com/dataEditor 21

PARA Weekly eJournal: December 24, 2019

Q2 2019 CMS DATA NOW AVAILABLE IN PDE

SOURCES: PARA receives hospital charge data for every CPTÂŽ/HCPCS Code for every hospital in the Medicare claim file which includes inpatient, outpatient, ASC, physician, and independent testing facilities. Medicare data is the most accurate and comprehensive source for comparing charges between hospitals, due to the fact that almost all US hospitals participate in Medicare and hospitals are required to charge the same price for the same service, regardless of the patient?s insurance payer. Since Medicare publishes claims data, it is a readily available and accurate source of hospital peer group charge data. PARA does not use the data compiled from clients to create a separate pricing database. It is PARA?s position that using this data creates a narrowed focus of pricing data. The use of data like this creates an ongoing cycle of using limited data to price a client charge then using those proposed prices for the following year?s review. This continued cycle means that there are no outside forces used to develop rational pricing methodologies. Because of this, PARA prefers to maintain complete transparency in the data used to compare client pricing by using only the data provided to Medicare in the most recent available year. The Medicare data is more detailed and robust, which allows PARA to be a leader in the industry in terms of comparative pricing data. COMPONENTS: Each data source provides complete Medicare claims data for every hospital in the Medicare claim file. The patient information has been removed from the file and replaced with a random account number for HIPAA Compliance purposes. - Inpatient Medicare MEDPAR ? Contains records for 100% of Medicare beneficiaries who use hospital inpatient services - Outpatient Medicare Complete Data Set ? Includes claims for services furnished January through December that were received, processed, paid, and passed to the National Claims History file

PARA Weekly eJournal: December 24, 2019

Q2 2019 CMS DATA NOW AVAILABLE IN PDE

- Physician Supplier Detail ? 1500 Claims (By Carrier/Locality) ? This file is a 100% summary of all Part B Carrier and Durable Medical Equipment Regional Carrier (DMERC) Claims processed through the Common Working File and stored in the National Claims History Repository TIMING: Current pricing data can be an invaluable tool in determining appropriate pricing for various procedures. Our data is released quarterly and can provide the User with information on the closest competitors in order to position the facility strategically within the chosen market. PROCESSING: PARA collects the raw data files from Medicare sources then analyzes and processes the data in order to provide a variety of report options for Users. - Annually, the Inpatient Data Set includes approximately 15 million inpatient claims with detailed charge data -

Annually, the Outpatient Data Set includes over 150 million claims with over one billion detailed lines of charge data

REPORTING: The PDE Pricing Data tab provides a User-friendly interface to the Medicare data collected by PARA. Data can be reviewed for both Inpatient DRGs and Outpatient CPTÂŽ/HCPCS codes. Many reports also allow the User to select either a year of data or isolate the fourth quarter to eliminate any anomalies associated with mid-year pricing changes in the data.

PARA Weekly eJournal: December 24, 2019

Q2 2019 CMS DATA NOW AVAILABLE IN PDE

The PDE allows Users to select specific hospitals to include in a designated market group. The organization?s standard geographic market is created when the client?s data is loaded into the PDE. Organizational and Service-related markets can also be created based on User needs to allow for review data for a variety of market peers. The following reports, for any of the available markets, can be accessed through the Pricing Data tab: - Hospital Summary Report: Includes several Inpatient and Outpatient measures to provide overall view of how facility compares to peers - Hospital 3 Year Trend: Compares the changes in the Inpatient and Outpatient Summary measures over a three year period - DRG Summary: Compares the hospital to its peers on all reported DRGs and includes the number of cases and average case rates - DRG Service Line Summary: Examines the revenue centers that contribute to an Inpatient case - DRG Service Line Detail: Provides review of individual DRGs compared to peers - Hospital Room Rates-Average Charge/Day: Displays average charge per day for each room rate type - DRG by MDC: Provides additional view of Inpatient data grouped by Major Diagnostic Category - DRG List: Complete list of current DRGs, descriptions, and MDC for User reference - Hospital Outpatient Summary: Compares service lines that comprise an Outpatient case - Outpatient HCPCS: Provides CPTÂŽHCPCS code specific data including reimbursement rates, peer pricing data, state and national pricing data, packaged rates (where applicable), and data from non-hospital providers - APC Status T Claim Analysis: Examines claims nationwide for the APC Status T Procedures with all services included on the claim, number of claims, and percentile comparison - APC Status T Rank: List of top 100 (by volume) Status T procedures including number of claims, client average charge, peer market average charge, and percent differences - APC Status A, Q, S, V, and X: List of top 150 (by volume) Status A, Q, S, V, and X procedures including number of claims, client average charges, peer market average charge, and percent differences - APC Status T Surgical Rank: List of top 150 (by volume) Surgical APC Status T claims including comparison of package charges, anesthesia charge, operating room charges, recovery charges, medical supply charges, and drug charges billed with the procedure - APC Status T Detail: Compares facilities on Outpatient Surgical Services by all line items that appear on a claim - Service Line Detail: Includes data for all procedures within a service line based on the CPTÂŽ code groups and shows market data for peers and non-hospital providers - Supplier Detail: Displays charge data from 1500 form file and Physician Fee Schedule reimbursement rates

For more assistance with the Pricing Data tab, or any other feature of the PARA Data Editor, please contact your PARA Account Executive for a demonstration or additional training. 24

PARA Weekly eJournal: December 24, 2019

There were SIX new or revised Transmittals released this week. To go to the full Transmittal document simply click on the screen shot or the link.

FIND ALL THESE TRANSMITTALS IN THE ADVISOR TAB OF THE PDE

PARA Weekly eJournal: December 24, 2019

The link to this Transmittal R263BP

PARA Weekly eJournal: December 24, 2019

The link to this Transmittal R4479CP

PARA Weekly eJournal: December 24, 2019

The link to this Transmittal R4481CP

PARA Weekly eJournal: December 24, 2019

The link to this Transmittal R4478CP

PARA Weekly eJournal: December 24, 2019

The link to this Transmittal R4482CP

PARA Weekly eJournal: December 24, 2019

The link to this Transmittal R2409OTN

PARA Weekly eJournal: December 24, 2019

Con t act Ou r Team

Peter Ripper

M onica Lelevich

Randi Brantner

President

Director Audit Services

Director Financial Analytics

m lelevich@para-hcfs.com

rbrantner@para-hcfs.com

pripper@para-hcfs.com

Violet Archuleta-Chiu Senior Account Executive

Sandra LaPlace

Steve M aldonado

Account Executive

Director Marketing

slaplace@para-hcfs.com

smaldonado@para-hcfs.com

varchuleta@para-hcfs.com

In t r odu cin g, ou r n ew par t n er .

Nikki Graves

Sonya Sestili

Deann M ay

Senior Revenue Cycle Consultant

Chargemaster Client Manager

h f r Review i.n et Claim Specialist

ngraves@para-hcfs.com

ssestili@para-hcfs.com

dmay@para-hcfs.com

M ary M cDonnell

Patti Lew is

Director, PDE Training & Development

Director Business Operations

mmcdonnell@para-hcfs.com

plewis@para-hcfs.com