On November 18, the American Hospital Association, together with the Association of American Medical Colleges (AAMC), Children’s Hospital Association (CHA), and Federation of American Hospitals (FAH), announced that they would sue the Department of Health and Human Services (HHS) over the price transparency rule that HHS and the Centers for Medicare & Medicaid Services (CMS) had announced on November 15--one of two price transparency rules released last Friday, according to media reports.
Already on Friday, the hospital associations had published this statement about the rule: “The American Hospital Association (AHA), Association of American Medical Colleges (AAMC), Children’s Hospital Association (CHA) and Federation of American Hospitals (FAH) issued the following joint statement on today’s final rule from CMS: Today’s rule mandating the public disclosure of privately negotiated rates between commercial health insurance companies and hospitals is a setback in efforts to provide patients with the most relevant information they need to make informed decisions about their care. Instead of helping patients know their out-of-pocket costs, this rule will introduce widespread confusion, accelerate anticompetitive behavior among health insurers, and stymie innovations in value-based care delivery. America’s hospitals and health systems have repeatedly urged CMS to work with hospitals, doctors, insurers, patients, and other stakeholders to identify solutions to provide patients with the information they need to make informed health care decisions and know what their expected out-of-pocket costs will be. We continue to stand ready to work with CMS to achieve this goal. Because the final rule does not achieve the goal of providing patients with out-of-pocket cost information, and instead threatens to confuse patients,” that joint statement had said, “our four organizations will soon join with member hospitals to file a legal challenge to the rule on grounds including that it exceeds the Administration’s authority.”
Samantha McGrail, writing on Nov. 18 in RevCycle Intelligence, confirmed the formal announcement of the lawsuit.
Also on Nov. 18, Healthcare Dive’s Samantha Liss and Shannon Muchmore posted a news report, noting that “Hospitals were swift to condemn the Trump administration's plans to force secret negotiated rates with payers out into the open, vowing to challenge the policy in court. Insurers also rebuked the plan announced Friday that also puts the squeeze on payers to unveil prices. Experts told Healthcare Dive,” the reporters wrote, that “the government clearly foresaw a legal challenge from the industry, but questioned whether its authority is adequate to force hospitals and insurers to publicly disclose their rates. In a Friday afternoon press conference at the White House, President Donald Trump said patients have ‘been getting ripped off for years’ and HHS Secretary Alex Azar called the requirements a ‘revolutionary’ change for the industry.”
The other price transparency rule would impact health plans, and representatives of health insurance industry also protested. America’s Health Insurance Plans (AHIP), the nationwide health plan association, issued a statement, attributed to Matt Eyles, AHIP’s president and CEO, and published on its website. “Every American should be able to get personalized health care cost and quality information before they seek care,” Eyles said in the statement. “Actionable and personalized information will help patients make informed decisions that are best for their needs. We support clear, consistent and concise information that is customized to an individual’s circumstances. Transparency should aid and support patient decision-making, should not undermine competitive negotiations that lower patients’ health care costs, and should put downward pressure on premiums for consumers and employers.”
In addition, Eyles said in the statement, “As we evaluate the full impact of both the final and proposed rules released today, and how they interact with other proposed rules that impact patient and consumer data, we do so with a few key principles in mind: Consumers deserve transparency about out-of-pocket costs to help them make informed decisions about their own care. Transparency should be achieved in a way that encourages – not undermines – competitive negotiations to lower patients’ and consumers’ costs and premiums. Public programs and the free market should work together to deliver on our commitments to affordability, quality and value for Americans. Neither of these rules – together or separately – satisfies these principles.”
And, Eyles added in the statement, “Health insurance providers unequivocally want to empower patients and consumers with health care cost and quality information that is simple, clear, and personally relevant. That is why health insurance providers encourage all of their consumers to use the secure, personalized cost estimator tools they provide today. We will continue to engage collaboratively with the Administration and other health care stakeholders on how we can best work together to achieve lower prices and costs while protecting health care quality, choice, value, and privacy for the hardworking Americans we serve.”
Two rules, two different stakeholder segments
The proposed rules were announced on Friday, Nov. 15 in a press release on the department’s website. As the press release noted, “As directed by President Trump’s Executive Order on Improving Price and Quality Transparency in American Healthcare, today the Department of Health and Human Services is announcing that CMS is issuing two rules that take historic steps to increase price transparency to empower patients and increase competition among all hospitals, group health plans and health insurance issuers in the individual and group markets. One of the rules is the Calendar Year (CY) 2020 Outpatient Prospective Payment System (OPPS) & Ambulatory Surgical Center (ASC) Price Transparency Requirements for Hospitals to Make Standard Charges Public Final Rule. The second rule is the Transparency in Coverage Proposed Rule. Both the final and proposed rules require that pricing information be made publicly available.”
“President Trump has promised American patients ‘A+’ healthcare transparency, but right now our system probably deserves an F on transparency. President Trump is going to change that, with what will be revolutionary changes for our healthcare system,” said HHS Secretary Alex Azar, in a statement contained in the press release. “Today’s transparency announcement may be a more significant change to American healthcare markets than any other single thing we’ve done, by shining light on the costs of our shadowy system and finally putting the American patient in control.”
If finalized, the proposed Transparency in Coverage rule for health plans would require health plans to give consumers real-time, personalized access to cost-sharing information, including an estimate of their cost-sharing liability for all covered healthcare items and services, through an online tool that most group health plans and health insurance issuers would be required to make available to all of their members, and in paper form, at the consumer's request; disclose on a public website their negotiated rates for in-network providers and allowed amounts paid for out-of-network providers; and encourage health insurance issuers to offer new or different plan designs that incentivize consumers to shop for services from lower-cost, higher-value providers by allowing issuers to take credit for "shared savings" payments in their medical loss ratio (MLR) calculations.
On the hospital side, according to the HHS/CMS press release, “[T]he Administration is finalizing a rule that will require hospitals to provide patients with clear, accessible information about their "standard charges" for the items and services they provide, including through the use of standardized data elements, making it easier to shop and compare across hospitals, as well as mitigating surprises.”
HHS and CMS noted that “The final rule will require hospitals to make their standard charges public in two ways beginning in 2021:
Comprehensive Machine-Readable File: Hospitals will be required to make public all hospital standard charges (including the gross charges, payer-specific negotiated charges, the amount the hospital is willing to accept in cash from a patient, and the minimum and maximum negotiated charges) for all items and services on the Internet in a single data file that can be read by other computer systems. The file must include additional information such as common billing or accounting codes used by the hospital (such as Healthcare Common Procedure Coding System (HCPCS) codes) and a description of the item or service to provide common elements for consumers to compare standard charges from hospital to hospital.
Display of Shoppable Services in a Consumer-Friendly Manner: Hospitals will be required to make public payer-specific negotiated charges, the amount the hospital is willing to accept in cash from a patient for an item or service, and the minimum and maximum negotiated charges for 300 common shoppable services in a manner that is consumer-friendly and update the information at least annually.
Shoppable services are services that can be scheduled by a healthcare consumer in advance such as x-rays, outpatient visits, imaging and laboratory tests or bundled services like a cesarean delivery, including pre- and post-delivery care.
The requirements for the consumer-friendly file are that the information must be made public in a prominent location online that is easily accessible, without barriers, and it must also be searchable. Item and service descriptions must be in 'plain language' and the shoppable service charges must be displayed and grouped with charges for any ancillary services the hospital customarily provides with the primary shoppable service.
In order to ensure that hospitals comply with the requirements, the final rule provides CMS with new enforcement tools including monitoring, auditing, corrective action plans, and the ability to impose civil monetary penalties of $300 per day. In response to public comments, CMS is finalizing that the effective date of the final rule will be January 1, 2021 to ensure that hospitals have the time to be compliant with these policies.”
