By Harris Meyer | April 25, 2018
Patients with high-deductible plans increasingly
were asking St. Clair Hospital in Pittsburgh to tell them in advance how much
their care would cost them out of pocket.
So two years ago, the independent community hospital worked with Experian to start providing individualized cost estimates for 135 common procedures through an online tool. Hospital Chief Financial Officer Richard Chesnos claims the estimates are nearly 100% accurate.
But St. Clair is the exception. Few hospitals nationally offer patients accurate, individualized information about how much they'll have to pay for medical services, experts say.
The CMS on Tuesday took an important first step to change that, heartening price transparency advocates. As part of its massive hospital inpatient payment system proposed rule, the agency wants to require hospitals to publish online a list of their standard charges in a machine-readable format and to update the information at least once a year.
The Affordable Care Act already mandates publishing charges, but the provision hasn't been enforced.
The CMS also asked for public comments on what type of charge information hospitals should publish and how the agency should enforce the requirement, such as making it a condition of Medicare participation. Comments are due June 25.
CMS Administrator Seema Verma said the new requirements, which were foreshadowed in a speech last month by HHS Secretary Alex Azar, are part of the Trump administration's efforts to encourage patients to become better-educated decisionmakers. "We are just beginning on price transparency," she said.
The proposed requirement to publish charges is likely to prove controversial and complicated to implement. Simply posting inflated retail prices as listed on a hospital's chargemaster won't be helpful to most patients, experts say.
"Posting gross charges is misleading and inflammatory," said Joe Fifer, CEO of the Healthcare Financial Management Association, which has published price transparency guidelines. "I'd rather CMS focus on actual payments hospitals receive and what patients are responsible for."
Some experts also questioned if publishing prices will help reduce prices. A study by the Health Care Cost Institute found that less than 7% of total U.S. healthcare spending stems from services for which patients truly can comparison shop.
In the proposed rule, the CMS anticipated such concerns. It asked for public comments on a series of questions about the best way to achieve useful price transparency, such as:
So two years ago, the independent community hospital worked with Experian to start providing individualized cost estimates for 135 common procedures through an online tool. Hospital Chief Financial Officer Richard Chesnos claims the estimates are nearly 100% accurate.
But St. Clair is the exception. Few hospitals nationally offer patients accurate, individualized information about how much they'll have to pay for medical services, experts say.
The CMS on Tuesday took an important first step to change that, heartening price transparency advocates. As part of its massive hospital inpatient payment system proposed rule, the agency wants to require hospitals to publish online a list of their standard charges in a machine-readable format and to update the information at least once a year.
The Affordable Care Act already mandates publishing charges, but the provision hasn't been enforced.
The CMS also asked for public comments on what type of charge information hospitals should publish and how the agency should enforce the requirement, such as making it a condition of Medicare participation. Comments are due June 25.
CMS Administrator Seema Verma said the new requirements, which were foreshadowed in a speech last month by HHS Secretary Alex Azar, are part of the Trump administration's efforts to encourage patients to become better-educated decisionmakers. "We are just beginning on price transparency," she said.
The proposed requirement to publish charges is likely to prove controversial and complicated to implement. Simply posting inflated retail prices as listed on a hospital's chargemaster won't be helpful to most patients, experts say.
"Posting gross charges is misleading and inflammatory," said Joe Fifer, CEO of the Healthcare Financial Management Association, which has published price transparency guidelines. "I'd rather CMS focus on actual payments hospitals receive and what patients are responsible for."
Some experts also questioned if publishing prices will help reduce prices. A study by the Health Care Cost Institute found that less than 7% of total U.S. healthcare spending stems from services for which patients truly can comparison shop.
In the proposed rule, the CMS anticipated such concerns. It asked for public comments on a series of questions about the best way to achieve useful price transparency, such as:
·
Should standard charges be
defined as the average discount off the chargemaster amount across all payers?
·
Should providers be
required to inform patients in advance how much their out-of-pocket costs for a
service will be?
·
Should providers be
required to tell patients how much Medicare pays for particular services?
·
Should the CMS impose civil
monetary penalties on hospitals that fail to publish standard charges?
The agency particularly
cited the lack of transparency when patients face surprise out-of-network bills from
physicians who provide services at in-network hospitals, and surprise bills for
facility fees and physician fees for emergency room visits.
"It's really important to address out-of-network bills," said Suzanne Delbanco, executive director of Catalyst for Payment Reform, which publishes an annual report card on state transparency efforts. "Patients often get caught off guard. There needs to be transparency around that to give patients a more accurate view of what their out-of-pocket costs will be."
But the CMS is likely to face substantial pushback from hospitals, which generally argue that insurers are in a better position to provide let their members know how much they will owe for particular services.
The Ohio Hospital Association won a court injunction blocking implementation of a 2015 state law requiring providers to give patients a "good faith" estimate of non-emergency services' out-of-pocket costs before treatment. That law remains on hold.
John Palmer, an Ohio Hospital Association spokesman, said his organization is currently reviewing the CMS proposal. Requiring providers to give patients individualized information on how much they owe based on their health plan design, deductible and coinsurance is "unworkable because there's no infrastructure in place that allows providers to access that information," he said.
Delbanco said there are other steps the federal government could take that might have a greater impact on price transparency and competition than requiring hospitals to publish standard charges. Such measures could include requiring insurers that offer Medicare Advantage and Federal Employee Health Benefit Program plans to disclose their payments to providers.
In addition, insurers should be prodded to get rid of gag clauses in provider contracts barring them from publicly reporting prices and quality measures, Delbanco said.
Still, she was encouraged by the CMS proposal, even though its implementation faces a long, tough road ahead.
"Having the federal government make a statement about greater transparency being an ingredient in the healthcare system sends a signal," she said. "There's symbolic transparency and functional transparency. But this is an important step forward."
"It's really important to address out-of-network bills," said Suzanne Delbanco, executive director of Catalyst for Payment Reform, which publishes an annual report card on state transparency efforts. "Patients often get caught off guard. There needs to be transparency around that to give patients a more accurate view of what their out-of-pocket costs will be."
But the CMS is likely to face substantial pushback from hospitals, which generally argue that insurers are in a better position to provide let their members know how much they will owe for particular services.
The Ohio Hospital Association won a court injunction blocking implementation of a 2015 state law requiring providers to give patients a "good faith" estimate of non-emergency services' out-of-pocket costs before treatment. That law remains on hold.
John Palmer, an Ohio Hospital Association spokesman, said his organization is currently reviewing the CMS proposal. Requiring providers to give patients individualized information on how much they owe based on their health plan design, deductible and coinsurance is "unworkable because there's no infrastructure in place that allows providers to access that information," he said.
Delbanco said there are other steps the federal government could take that might have a greater impact on price transparency and competition than requiring hospitals to publish standard charges. Such measures could include requiring insurers that offer Medicare Advantage and Federal Employee Health Benefit Program plans to disclose their payments to providers.
In addition, insurers should be prodded to get rid of gag clauses in provider contracts barring them from publicly reporting prices and quality measures, Delbanco said.
Still, she was encouraged by the CMS proposal, even though its implementation faces a long, tough road ahead.
"Having the federal government make a statement about greater transparency being an ingredient in the healthcare system sends a signal," she said. "There's symbolic transparency and functional transparency. But this is an important step forward."
Harris Meyer is a senior
reporter providing news and analysis on a broad range of healthcare topics. He
served as managing editor of Modern Healthcare from 2013 to 2015. His more than
three decades of journalism experience includes freelance reporting for Health
Affairs, Kaiser Health News and other publications; law editor at the Daily
Business Review in Miami; staff writer at the New Times alternative weekly in
Fort Lauderdale, Fla.; senior writer at Hospitals & Health Networks;
national correspondent at American Medical News; and health unit researcher at
WMAQ-TV News in Chicago. A graduate of Northwestern University, Meyer won the
2000 Gerald Loeb Award for Distinguished Business and Financial Journalism.
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