Hospitals and health insurers may not see eye to eye on a lot, but they do agree that the federal government's proposal to make hospitals publicly post payer-negotiated rates for medical services would be bad for business and patients.
In comments on the hospital outpatient prospective payment proposed rule, which were due Friday, they urged the CMS to abandon the plan. Hospitals also asked the CMS to rethink reimbursement cuts to 340B hospitals and for outpatient clinic visits.
Hospitals and health insurers unanimously agreed that the CMS' proposal to require hospitals to post payer-negotiated rates starting in January 2020 would do little to further price transparency and would likely just confuse patients.
They questioned the agency's legal authority to compel hospitals to disclose those rates, arguing that it would violate the Administrative Procedure Act and the First Amendment, and constituted mandating the disclosure of trade secrets, which they said could inhibit competition.
"As drafted, the requirements outlined in the proposed rule will provide patients confusing data that is difficult to understand and compare," Livonia, Mich.-based Trinity Health system wrote. "Instead of helping patients, requiring hospitals to publish all of this information would create an entirely new industry to intake this data and sell it, adding even more complexity to the healthcare industry."
Economists and other experts have said that the proposal is a worthwhile experiment and insisted it could lead to positive change in an industry well-known for secretive healthcare negotiations and hard-to-access price information.
But the American Hospital Association commented that the proposal would lead to anticompetitive behavior among health insurers and "create a platform for price-fixing." It noted that the Federal Trade Commission has said that disclosing this type of information could enable collusion among insurers and push premiums higher.
America's Health Insurance Plans, the trade association for insurers, agreed. It also worried that releasing big datasets of price information to third-party vendors could pose risks to patient privacy.
"We are concerned that unknown entities will have open access to the data, with few restrictions on how they may use it," AHIP said. "Without clear consumer protections governing how that data can be used, patients' privacy will be put at risk."
In their comments, hospitals also stressed that complying with the proposal to post their negotiated rates would be an operational nightmare taking much more time to comply with than the CMS' estimate of 12 hours.
The Cleveland Clinic commented that staff from multiple departments worked for four months to post its hospital charges online to comply with the Jan. 1, 2019, requirement, and that required posting just one charge per item or service. Posting negotiated rates, however, would be "much more complicated."
"We have many different payers and multiple products within each payer. Specifically, we estimate that we have 3,000 contracted rate schedules across the Cleveland Clinic health system. Further, our chargemaster reflects over 70,000 lines—just for technical (hospital inpatient and outpatient) charges. Thus the number of data points that would need to be posted would exceed 210 million just for hospital services," it wrote.
Beyond the price transparency proposal, many commenters also urged the CMS to abandon plans to continue payment cuts to 340B hospitals and the phase-in of a 40% payment reduction to hospital outpatient clinic visits. Federal courts have held that the CMS violated its authority in pursuing both of those reimbursement cuts, and healthcare organizations in their comments reminded the agency of that.
America's Essential Hospitals, which represents safety net hospitals, argued the policy first proposed two years ago "to reduce Part B drug payments to hospitals with the most vulnerable patients already has severely impacted essential hospitals. It undermines these providers' ability to offer heavily discounted drugs to patients in the face of rapidly increasing drug prices."
Implementing the policy for 2020 when the court has already thrown it out for the years 2018 and 2019 would impose an unnecessary burden on providers, America's Essential Hospitals said. The organization and others urged the CMS should refund hospitals for 2018 and 2019 at the rate stipulated by the 2017 outpatient rule.
Hospitals and their associations also urged the agency to ditch the planned phase-in of payment cuts for clinic visits, restore the higher payment rates and repay hospitals. The AHA and the Association of American Medical Colleges, which both sued to stop the cuts, said they would pursue further legal remedies if needed.
"By proposing to complete the phase-in of the onerous cuts for hospital outpatient clinic visits, CMS has not only undermined clear congressional intent, but has threatened to impede access to care, especially in rural and other vulnerable communities," the AHA wrote.
