The CMS issued several proposed rules on Monday that it hopes will make it easier for patients to understand the cost of a hospital service before accessing care.
Starting in January 2019, the CMS began requiring hospitals to publish their list of retail charges for healthcare services. The Medicare Outpatient Prospective Payment System proposed rule issued Monday would go a step further by requiring hospitals to not only publish their gross charges, or list prices, but also the negotiated price by specific payer and plan for a set of "shoppable" services. Those services could include anything that can be scheduled by a patient in advance, such as an MRI or hip replacement.
The proposed rule follows President Donald Trump's June executive order that directed the HHS to increase price and quality transparency in healthcare.
"Hospital pricing has been a mystery, but thanks to the leadership of President Trump, those days are over," CMS Administrator Seema Verma said on a call with reporters on Monday, adding that price transparency allows providers to compete and leads to lower prices.
"Hospitals would be required to post all of their payer-specific negotiated rates, which are the prices actually paid by insurers," she said.
The CMS would require gross charges and payer-negotiated prices to be posted online in a machine-readable format so that developers could incorporate them in consumer price transparency tools and electronic health records. Publishing prices in a standardized way will allow patients to do an "apples-to-apples comparison" on hospital prices, Verma said.
However, the proposal stops short of requiring hospitals to post patient-specific price information that would show patients where they are in meeting their deductibles, for example.
Under the proposed rule, which would go into effect in January 2020, the CMS would require hospitals to display negotiated charges for at least 300 services, including 70 selected by the CMS and 230 selected by hospitals. Hospitals would have to update the information at least annually. The services could include both inpatient and outpatient procedures and would affect all patients—not just Medicare beneficiaries. The CMS said the Public Health Service Act gives it the authority to put these requirements on hospitals.
The agency also said it wants to enforce the price transparency requirements by monitoring, auditing and imposing civil monetary penalties of more than $100,000 per year for hospitals that don't comply. It asked for comments on what other information might be useful to patients, such as median negotiated rates. The deadline for submitting comments is Sept. 27.
In an interview, Verma told Modern Healthcare that providing this price information should not be a heavy lift for hospitals. A regulatory impact analysis found that complying with the proposed rule would cost the 6,000 hospitals affected by the rule about $6 million, or about $1,000 each. She said hospitals already have this information and some providers, including the University of Colorado Hospital and University of Utah, have started posting negotiated rates online, she said.
In a statement, the American Hospital Association CEO Rick Pollack blasted the CMS proposal, saying that requiring hospitals to post negotiated rates "could seriously limit the choices available to patients in the private market and fuel anticompetitive behavior among commercial health insurers in an already highly concentrated insurance industry." The association also said the proposal exceeds the federal administration's legal authority.
Beyond price transparency, the proposed outpatien rule also completes a two-year phase-in of its site-neutral payment policy that slashes payment for clinic visits, or check-ups, in outpatient departments. The CMS also proposed updating OPPS and ambulatory surgery center payment rates by 2.7%.
In another proposed rule, the CMS focused on physician pay by revising evaluation and management services, or E/M codes, for all specialties in 2020. The CMS proposed to boost the relative value unit conversion unit, which is the basis for how physicians and other practitioners are reimbursed, from $36.04 to $36.09 in 2020.
Critics of the physician fee schedule have advocated for raising the fees for E/M services provided in the outpatient setting, which represent the bulk of Medicare income to primary-care doctors. They say that a revamping of the schedule would help close the income gap has led to a shortage of primary-care physicians, given that specialists are reimbursed more under the current framework.
To the dismay of many policy experts and organizations like the Medicare Payment Advisory Commission, prior updates to the fee schedule have benefited procedure-oriented specialties at the expense of primary-care doctors.
The proposed rule would increase payments to practitioners for time clinicians spend after a patient leaves the hospital to try to boost adherence and continuity. Office- and outpatient-based visits would be reimbursed at a higher rate under the proposed rule.
The CMS aims to consolidate the Medicare-specific add-on code for office/outpatient visits for primary care and non-procedural specialty care related to ongoing care for those with chronic conditions. The agency also proposed reducing the number of reimbursement levels for new patients seeking care through doctors' offices and outpatient facilities to streamline the process.
The rule looks to give physician assistants greater autonomy in accordance with state law and state scope of practice, the agency said.
In an attempt to reduce the paperwork burden on clinicians, the CMS proposed to allow practitioners to review and sign rather than re-document notes in the medical record.
The CMS wants to add three new codes for bundled telehealth treatment for treating individuals who are addicted to opioids, which includes coverage for medication-assisted treatment. The bundled payment program would also cover overall patient management, care coordination, individual and group psychotherapy and substance-use counseling.
On the quality front, the agency is seeking comment on how to align the Medicare Shared Savings Program quality performance scoring methodology more closely with the Merit-based Incentive Payment System quality performance scoring methodology. The ultimate goal is to reduce the reporting requirements, the CMS said.
"Clinicians are drowning in paperwork and reporting requirements caused by cumbersome government rules and regulations," Verma said in a statement. "These administrative costs add to the total cost of delivering healthcare, which means physicians often have to hire extra staff and spend more time complying with requirements instead of with their patients."
The CMS is also proposing updates to its prospective payment system for Medicare patients with end-stage renal disease, where the program projects more than $11 billion in 2020 spending across roughly 7,000 dialysis clinics.
The agency would raise the base pay for dialysis by $5, to $240.27. But facilities would also get a transitional pay boost for any new equipment or supplies that are deemed innovative as part of the Trump administration's efforts to modernize kidney care in the U.S.
Facilities would get a two-year pay increase if they use dialysis equipment that meets "substantial clinical improvement criteria." The payment rate would be based on 65% of the price established by Medicare administrative contractors.
Additionally, the proposed rule would drop generics from the list of drugs that qualify for a separate temporary add-on payment within dialysis treatment. The CMS said it wants to prod clinics toward "innovative" renal dialysis drugs and biological products that fall under the FDA's new drug application classifications.
These changes within Medicare's kidney payment system follow Trump's executive order on U.S. kidney care, an area where HHS Secretary Alex Azar has also focused lately. Azar has said he wants to shift the bulk of dialysis treatments out of clinics and into patient's homes.
More than 430,000 Medicare patients are on dialysis and spend 12 hours weekly tethered to machines, according to the CMS.
End stage renal disease accounted for more than $35 billion or more than 7% of Medicare spending in 2016.