Hospital, insurers reject forced disclosure of negotiated prices
Hospitals and health insurers may disagree, but they do agree that the federal government’s proposal to publicly negotiate hospitals on medical service tariffs negotiated by the payer would be bad for businesses and patients.
In comments on the proposed scheme for outpatient outpatient payments due on Friday, they urged the CMS to abandon the plan. Hospitals also asked the CMS to Reconsider reimbursement cuts for 340 billion hospitals and for ambulance visits.
Hospitals and health insurers unanimously agreed that the CMS proposal to oblige hospitals to book tariffs negotiated by the payer As of January 2020, it would do little to improve price transparency and would likely only confuse patients.
They questioned the agency’s legal authority to compel hospitals to disclose these tariffs, arguing that doing so would violate the Administrative Procedure Act and First Amendment, and it was an obligation to disclose trade secrets that they believed stifle competition could.
“As drafted, the requirements set out in the proposed rule will provide patients with confusing data that are difficult to understand and compare,” wrote Trinity Health System of Livonia, Michigan. “Rather than helping patients, requiring hospitals to publish all of this information would create a whole new industry to take that data in and sell, which would make the healthcare industry even more complex.”
Economists and other experts have said that the suggestion is a worthwhile experiment and insisted that this could lead to positive change in an industry known for secret healthcare negotiation and difficult-to-access pricing information.
However, the American Hospital Association commented that the proposal would lead to anti-competitive behavior by health insurers and “create a platform for price fixing”. It noted that the Federal Trade Commission has stated that disclosure of this type of information could enable collusion between insurers and drive premiums up.
America’s Health Insurance Plans, the insurers’ trade association, agreed. She also feared that releasing large data sets of pricing information to third parties could pose risks to patient privacy.
“We are concerned that unknown companies will have open access to the data with few restrictions on how they can use it,” said AHIP. “Without clear consumer protection that regulates the use of this data, the privacy of the patients is at risk.”
In their comments, the hospitals also stressed that complying with the proposal to publish their negotiated tariffs would be an operational nightmare that would take much more time than the CMS estimate of 12 hours.
The Cleveland Clinic commented that employees from multiple departments worked for four months to post their hospital fees online to meet the January 1, 2019 requirement and that only one fee needed to be booked per item or service. However, booking negotiated tariffs would be “much more complicated”.
“We have many different payers and multiple products within each payer. Specifically, we estimate that we have over 3,000 contracted rates across the Cleveland Clinic healthcare system. In addition, our Chargemaster contains over 70,000 lines – only for technical (inpatient and outpatient) costs in the hospital. This means that the number of data points to be published for hospital services alone would exceed 210 million, ”it says.
In addition to the price transparency proposal, many commentators also urged CMS to abandon plans to continue payment cuts for 340 billion hospitals and gradually introduce a 40% payment cut for outpatient hospital visits. Federal courts have ruled that the CMS has violated its powers by prosecuting both of them of these reimbursement cuts, and health organizations have reminded the agency in their comments.
Americas Essential Hospitals, which represent safety net hospitals, argued that the policy, first proposed two years ago, to reduce Part B drug payments to hospitals with the most vulnerable patients is already having a significant impact on major hospitals. It undermines the ability of these providers to offer heavily discounted drugs to patients in the face of soaring drug prices. ”
Implementation of the directive for 2020 if the court has already thrown it out America’s Essential Hospitals would put an unnecessary burden on providers for 2018 and 2019. The organization and others asked the CMS to reimburse hospitals for 2018 and 2019 at the rate set in the 2017 outpatient scheme.
Hospitals and their associations also urged the agency to abandon the planned phasing-in of hospital visit payment cuts, restore higher payment rates and repay hospitals. The AHA and the Association of American Medical Colleges, both of which sued for stopping the cuts, said they would appeal further if necessary.
“By proposing to phase out burdensome hospital visits to outpatient clinics, CMS has not only undermined the clear intent of Congress, but threatens to hinder access to care, particularly in rural and other vulnerable communities,” the AHA wrote .