Providers critical of CMS price transparency push in pay rule

Providers worry that the CMS, in its drive give patients greater access to both price and care information, may do more harm than good.

The inpatient prospective payment system rule, finalized Aug. 2, will reverberate across the industry.

The agency updated its previous guidelines, drawn from the Affordable Care Act, by requiring hospitals to publish a list of standard charges in an online, machine-readable format. Hospitals will be required to publish those prices, pulled from their retail chargemaster, starting Jan. 1. The information must be updated at least annually.

Hospitals argue that a list of charges could be misleading because they don't reflect prices negotiated by insurers. In addition, not-for profit hospitals must provide reduced rates or charity care based on patient household income.

"Therefore, a hospital's charges are not as relevant to a patient because the patient's bill may be significantly discounted or the services are provided at no charge under the hospital's charity policy," Jeffrey Bromme, chief legal officer at Adventist Health System, said in a comment letter.

Patients may avoid obtaining care due to the lack of context, others said. "We do not want patients to forgo needed care, especially if the quoted price is for the total cost of the service and not what the patient will be expected to pay out-of-pocket," Tom Nickels, executive vice president for government affairs and public policy at the American Hospital Association, said in a comment letter.

CMS officials disagreed, adding that hospitals could provide additional details that would help patients understand the true cost of care. "Nothing in our guidelines precludes a hospital from providing this information to patients and the public," the CMS said in the final rule. "More specific information on their potential financial liability is needed … however, we believe that this more specific need does not justify a delay in the provision of chargemaster information to the public."

Providers also took aim at the agency's continued push to retool the meaningful use program, now dubbed "promoting interoperability."

The IPPS rule requires providers to give patients "timely access for viewing, downloading or transmitting their health information … using any application of the patient's choice."

The sticking point for providers is "any application." Giving patients unfettered app choice without allowing hospitals the opportunity to evaluate the app or test its functionality creates vulnerabilities, according to Eric Lucas and Clara Evans at Dignity Health. Lucas is vice president of reimbursement and Evans is director of public policy and fiscal advocacy.

"Connecting a wide range of unfamiliar, and frequently untested, apps that are presented by patients creates a significant and real risk that can serve as a possible point of entry for malware into systems," Lucas and Evans wrote in a joint comment letter.

CMS officials pushed back at the assertion in the final rulemaking, saying, "It was not our intent to imply that eligible hospitals would not be permitted to take reasonable steps to protect the privacy and security of their patients' information."

The rulemaking noted that providers can vet application developers or take other actions. App developers would have to be registered with HHS in order to access electronic health records that have been certified by the Office of the National Coordinator for Health IT. The CMS also anticipated that patients seeking access to their data will need to authenticate their identity.

After seeing the final rulemaking, Blair Childs, senior vice president of public affairs for Premier, expressed disappointment that the CMS did not move forward with its proposal to eliminate the duplicative penalties for hospital-acquired conditions.

"We have long felt that all of the five hospital quality and payment programs overseen by CMS need to be mutually exclusive to ensure that hospitals are not inappropriately hit with double or triple penalties for the same event," Blair said in a statement. "In leaving the HAC penalties the same, CMS missed an opportunity to harmonize measurement around indicators that truly matter and avoid duplication across programs."

The CMS initially sought to delineate differences between the Hospital Value-Based Purchasing Program and the Hospital-Acquired Condition Reduction Program, but it received significant pushback warning that patients could be harmed if safety measures were removed from one of the programs.

"These measures track infections and adverse events that could cause significant health risks and other costs to Medicare beneficiaries," the CMS said in the rule. "Therefore, we agree it is appropriate and important to provide appropriate incentives for hospitals to avoid them through inclusion in more than one program."

The move was praised by Leah Binder, CEO of the Leapfrog Group, a national patient safety ranking organization. "No hospital should be paid a reward for excellence if they have a high rate of preventable infections or errors," Binder said in a statement.

The CMS eliminated the so-called 25% rule that would ding long-term care hospitals' Medicare reimbursement rates.

Under the long-postponed policy, if more than a quarter of a long-term care hospital's patients came from a single acute-care hospital, the long-term care hospital would receive a reduced Medicare reimbursement rate for patients exceeding that threshold. The reduced rate would be 50% to 60% less than what they would have received otherwise, according to the National Association of Long Term Hospitals.

The policy was first introduced in 2004, but has been delayed regularly by both the CMS and Congress due to industry concerns. It was scheduled to finally kick in on Oct. 1.

"This history of the 25% rule demonstrates that it was never adequately supported," Michael Cronin, vice president of reimbursement and government affairs at LifeCare Hospitals, said in a comment letter. "The rule deters medically necessary care, not inappropriate patient shifting."

Overall, the CMS projects the final rule's changes will increase long-term care hospitals' payments by approximately 0.9%, or $39 million, in fiscal 2019. Acute-care hospital payments will rise $4.8 billion.