Kevin:

Hi, and welcome to the episode Panacea’s podcast Beyond the Bottom Line. Let’s talk healthcare, finance, revenue cycle and compliance. I’m your host, Kevin Chmura, CEO of Panacea Healthcare Solutions. Today, we’re going to be doing a follow-up to a podcast we released in February highlighting kind of the rapid reaction to an executive order signed by President Trump, doubling down on price transparency enforcement.

It’s been a little bit of time since then, and we thought it would be a good time to bring back our guest from that episode, Govi Goyal, who is President of our Financial Services division and leads our price transparency practices and really a national nationally recognized expert on all topics price transparency. To kind of give us an update on how that’s translating out into the market and what we’re seeing.

So first, let me welcome Govi. Thanks for coming back.

Govi:

Thanks Kevin. Good morning.

Kevin:

So, maybe just set it up for the listeners, if you didn’t get a chance to listen to our first podcast, you can find that on our website. Also, you can find those on Apple Podcasts as well. If you want to go back and subscribe to Beyond the Bottom Line. But I’ll just I’ll do a quick rundown of why we did that podcast and then maybe stick to what we’re seeing.

So in that we talked about ,that on February 25th, President Trump signed a new executive order. And what that did was it specifically instructed the Secretaries of Treasury, Labor and Health and Human Services to rapidly implement actions to enforce the price transparency regulations from the original executive order, EO 13877, and this was an important piece, within 90 days.

So he put the word rapidly in there. But then he also defined what rapidly was, which is within 90 days. I want to see enforcement of the existing regulations and also instructed them to, if you can find new ways to enforce regulations. It’s been about 75 days since then, and we are starting to see some of that executive order filter out into the marketplace.

And so, you know, just in our internal discussions, we’ve talked a little bit about what we’re seeing. So Govi, maybe I won’t oversell it. Maybe you could just tell us what are you hearing out in the market? What are we seeing? What are what our customers and prospects calling us, telling us, like, what? What’s out there right now?

Govi:

Yeah, slowly. And I think the executive order is a good place to start because that’s what’s really triggering a lot of the activity that we’re seeing. And you hit the nail on the head. It’s really a two-pronged approach. There’s the increased enforcement, which we’re definitely seeing and we’re going to jump into. But then there’s a second part, which is around actually improving the price transparency requirements.

And so it’ll be interesting to see. We’ve got, as you mentioned, just about 16 days left here before the 90 days is up. As part of the executive order, there’s language in there that states within 90 days we should see either updated guidance or proposed regulatory action on two different things. One is around ensuring pricing information is more standardized and is easily comparable across hospital health plans, which does a little, I’m really interested is hear and see what that guidance might be, because back in 2024, July of 2024, it was required for all hospitals to comply with a standardized CMS template.

And the primary reason for that is to get to more apples-to-apples comparisons so you wouldn’t accidentally compare like a case rate to a per diem or a PPO to HMO. So we’ll see what other, you know, further guidance or regulatory action is going to be coming up for hospitals or even health plans to comply with.

The other piece is more around seeing any guidance or regulatory action in terms of reporting a complete, accurate and meaningful data. And that’s more around enforcement policies. And so in terms of enforcement, we are seeing an increase in the volume of, we call them CMS love letters here. Really what they are violation notices. There’s a website, https://data.cms.gov/ that you can go to, I actually just went to it earlier this week where you can see a list of all the difference enforcement actions. So you can see all the hospitals that either received a penalty or a violation notice or a corrective action plan. And there’s definitely a trend. There’s an upward trend to see more activity in 2023 and 2024, unfortunately, it’s not updated for 2025.

If it was, you would definitely see that spike occurring almost immediately after February 25th, with the executive order. I’ve been drawing upon a lot of experience, personal experience, industry experience. We have a lot of hospital health systems that have approached us and asking for our advice because they’ve received the letter from CMS. So we’re definitely, it’s, I think it’s safe to presume that that increase is due to the Trump administration executive order.

Kevin:

Yeah, that’s we, letters were somewhat of a rare occurrence for at least you know our customer base as we’ve always talked about it but we agreed, I think the team is talking about an uptick in them. Any insights into the content. Right? Just getting a letter is one thing, but what are what are people being told by CMS?

Govi:

Yeah. So for now, what we’re seeing is a lot more related to the accessibility of the files. And I think what CMS is doing is they’re following a phased approach. So for now, what CMS is doing is they’re making sure that all the machine readable files out there are accessible and there’s two primarily two or three things that hospitals are getting dinged on.

One of them is the text file requirement. So all hospitals that are required to comply with hospital price transparency, they must include a text file in the root folder of their website. And so this file, it needs to contain information like the hospital’s location, the URL of the webpage that’s hosting a single file, a direct link to the MRF, and I think a the hospital point of contact information.

So pretty much those standard five things, there’s a lot of instruction out there that CMS has put on their website, but unfortunately we’re seeing a lot of hospitals that don’t have the text file up at all. They’re completely non-compliant with it. Or they have the text file up, but they have issues that we, you know, the layperson would consider very nitpicky.

Maybe there’s a typo. Maybe their, the MRF URL is not pointing directly to the MRF, it’s pointing to the website instead. Even if it’s those small areas that deviate from the instruction of CMS, you will get a warning letter or Violation Notice on that. Just to give you an example of how nitpicky it could be, we were working with a health system that had, they had pricing transparency listed on the footer of the websites.

So instead you should have price transparency, not pricing so that that word differential there was enough to get them a violation notice. So it needs to be 100% correct. That’s what we’re seeing today. There’s, you know, to talk about what the phased approach will be. We really think the next phase is going to be the CMS validator.

So I think what CMS is trying to do is they’re trying to make sure all the files are accessible so that they can do some automation, they can send out the bots to grab the files, and then the next phase will be running it through the CMS validator, see if you’re compliant from that perspective.

Kevin:

Yeah. So maybe, maybe one way to think about it is that the, these initial letters are probably a combination of kind of a quick win by CMS to say, hey, look, we’re stepping up our enforcement and these people use the word pricing instead of price and that’s a violation. But yeah, they’re trying to line up the data so that they can take it and run the validator through, run it through the validator, which will be an entirely different level because I think the, you know, things like the text file, those are the regulations that are spelled out maybe relatively easy to fix, start to get into some of what the validator may find as flaws with your machine readable file. Maybe not so easy to fix. You think that’s fair?

Govi:

Yes, I think so. And I, it’s giving hospitals a little bit of breathing room to, kind of, you know, a heads up that at some point, once we get through the, once the message gets through their wave of looking at accessibility and then they move on to the CMS validator after that, shortly after that, what we can likely see is that CMS will then look at the actual content or the actual content or machine readable file, making sure they are file is complete, valid, accurate, there’s no gaps missing. So they, likely what they’ll do, they could look at your patient estimation system and make sure all the payer plans you have listed there are reflective of your MRF. Things like that are likely to follow suit after we get through these first two waves.

Kevin:

Wow. Yeah. So, you know, the enforcement was always coming, right? Still not a ton of hospitals that have been levied civil monetary penalties. But I think if you intersect this conversation with just generally what’s going on in government today, new sources of revenue or exploiting existing sort of sources of revenue, it’s just high on the list of this administration.

And this will be a tough place to go get it, but certainly opens itself up for things. So, you know, we always like to provide advice to the listeners on what they should be thinking about, maybe potentially doing, your, nobody’s advice is more valuable than yours because you really are the expert in this go So what should people be thinking about right now?

What should they be doing.

Govi:

Yea, thinking more big picture related about what’s coming next. And you know outside maybe you’ve just having a singular view of this executive order. Price transparency is definitely here to stay it’s going to continue to evolve and grow. What we could see, and no one has a crystal ball, so nothing’s for sure. But based upon the trend that we’re seeing so far, and history continues to repeat itself and evolve, we could see more frequent updates required in machine readable file.

Right now it’s just an annual update on a rolling basis, and you have to provide your date of last update and the machine readable file. And CMS does look at that to make sure it hasn’t been passed to here time frame as part of their review process. But if you think about it, the payers, the payers are required to update on a on a monthly process.

It’s quite a disparity in the requirements between the payers and the hospitals. So I wouldn’t be surprised if over time we see that CMS does require maybe an update on a quarterly basis. It might be drastic to put it on a monthly basis, but there’s likely going to be something like that happening. In addition, there’s two bills out there, one in the House, one in the Senate around other potential requirements that might be coming out.

For example, right now, non-hospital locations. If you’re an AFC and an imaging center, a lab or a private physician office, you know, you’re not on the hook to produce a machine readable file or comply with hospital price transparency. And so I think there’s only one state that I can think of, Minnesota, that has taken in their own hands to make that a requirement in 2025.

We potentially might see some action on that now that we have a lot more momentum here with price transparency, this executive order came out. There’s definitely going to be more enforcement on the pay commission files. The payers have not really had much enforcement. It’s been left to the states for the most part. And I think there’s been a lot of frustration and I don’t dare say angst by the community because in order, you know, in order for us to actually meet the intent of price transparency, we have to be able to access the data.

And it’s still a very challenging. A challenge to access the data and put it in a format that’s actually usable. So you could do this benchmarking, comparative analysis. A lot of times you need special computing power and the tools to decipher and get to the data you need. And we’re not sure how, you know, how accurate is it anymore.

So there has to be enforcement and that has to get better. I think part of the executive order is going to push towards that. The last piece I’ll mention is more around quality measures. CMS continues to hint at transparency not just being a financial thing and reporting negotiated rates. It’s the insertion of both quality and financial data.

If you think about it, any time you make a decision to shop around and determine where you’re going to go with what you’re going to buy, you don’t just look at the price tag. You also look at quality. So for us to really take a full step into price transparency, at some point, we would likely see the push towards integration of quality measures.

There’s a lot of different ways that can look, so it’ll be interesting to hear what kind of guidance for action we get, we get from that.

Kevin:

So and I tell you, that’s great stuff. I think that any or all of those potential changes would be impactful, all if all of them made it, and that would be something. Maybe a lot for a given year, but that’s tough. And for those of you listening, I’ll advise you that we, Govi has successfully predicted the future before and so hopefully take note of some of those.

They’re the likely places that will go. Certainly frequency I think that that would just double tapping on that one. The there is the disparate nature of the payer frequency versus the provider frequency, is really something. So, and perhaps advice for hospital executives out there right now is you know don’t sleep on your MRF right now you may feel like it’s good and you’re in good shape but it maybe hasn’t been scrutinized to the level it will be and stay limber for upcoming changes.

It’s probably good advice right now. Would you agree, Govi?

Govi:

Yeah, I don’t aim to be the Nostradamus of price transparency here. So, but it’s, there’s definitely a patterns that we’re seeing, and so I think it’s better to at least have these things on your radar so they don’t come as unexpected surprises and then you’re in a mad scramble mode to try to accommodate. I would just say, you know, have make sure you have a maintenance plan for your files, machine readable files.

Just in case so that those frequency updates do occur and you don’t have you’re on a process of restarting from scratch each time you have to build out your machine readable files or update your patient estimation system. Other advice I give to you, especially now, is check to see if you’re compliant with your text file requirements.

Basically, you just go to your website and it’s https://cmsgov.github.io/hpt-tool/txt-generator/ and you can check there and see if you’ve got your text file up this way, at least if you don’t, you can start making steps towards complying with that before you get the letter, because as soon as you get the letter from CMS the clock starts ticking.

Right. And you don’t want to stop what you’re doing to, you know, to cover that when you’ve got other things on your plate there that as well as the footer on your Web site. And then from there, just run your files to your validator. And that should be good at least to get you by for the next couple of months.

In long term, you may want to entertain getting an audit, an external audit to review your material files, your patient estimation system. I’m, if you’re, you know, if this is a priority for you and you’re concerned about being in compliance, and of course, you know, meeting the objectives of consumerism out there in the in the public medium.

Kevin:

Right. Great, great, great advice. So what I’ll say, Govi, is some we will continue to monitor this. Right. There’s as you pointed out, 15, 16 days until the 90 is up. But that’s certainly not the finish line. This will continue. So I will reserve the right to bring you back and give us another update. Your real world insights are invaluable, these things do translate out into actionable items that happen every day. So maybe I’ll just thank you at this point for your insights and look to have you back soon. So thanks.

Govi:

Yeah, sounds great. Thanks, Kevin. Thanks, everyone.

Kevin:

So I’m Kevin Chmura and this has been Beyond the Bottom Line by Panacea. Stay tuned for upcoming episodes featuring more expert guests. And remember, when it comes to healthcare finance, every detail matters. Staying current is important. So until next time, keep striving for excellence in driving innovation in healthcare. As a reminder, you can subscribe to the Beyond the Bottom Line podcast on Apple Podcasts. You can also find this episode and prior episodes on the Panacea website or on LinkedIn. Thank you, everybody