State transparency approaches may serve as models on which the federal government could build, hospital advocates say.


April 17—In response to a new Senate price and quality transparency initiative, hospital advocates outlined measures they would support but also urged caution in pursuing new federal requirements.

A bipartisan group of six senators wrote a letter in early March to a group of healthcare industry advocacy organizations—including HFMA and several hospital associations—to seek feedback about ways to improve price and quality data transparency.

Hospital advocates responded that they supported transparency, and they outlined numerous existing state and federal transparency initiatives in which they already participate. Additionally, a range of industry and third-party transparency initiatives have sought to increase patient access to data.

For instance, several respondents cited a May 2014 HFMA report, “Price Transparency in Health Care,” which was produced by a multi-stakeholder task force and created a framework for communicating price transparency to different purchaser groups.

The task force also developed a consumer guide to understanding healthcare prices, and in support of the task force, the American Hospital Association (AHA) developed a price transparency toolkit for hospitals.

Caution Urged

The quest for industry feedback on new transparency requirements comes as at least one of the six senators—Sen. Bill Cassidy (R-La.)—has said he plans to introduce legislation this year with new requirements, according to media reports.

But AHA warned that a better understanding is needed of what price and quality transparency information would best serve patients.

“More research is needed to understand what type of pricing patients want and would find useful in their health care decision-making,” Tom Nickels, executive vice president at AHA, wrote in a letter to the senators.

The need for a better understanding of patients’ wishes in relation to transparency is illustrated by the relatively scant utilization of existing transparency tools.

“Patients have not used much of the data that already is available—whether it is through public-payer initiatives, like the Compare tools available through the Centers for Medicare & Medicaid Services (CMS), or private-sector initiatives, such as Castlight Health,” Nickels wrote.

America’s Essential Hospitals (AEH), which represents safety net hospitals, warned the senators that transparency requirements can increase hospital care delivery costs without improving quality. 

“If hospitals are required to report specific data, this reporting should not lead to additional administrative burden, and efforts should be undertaken to examine the usefulness of data already being reported,” Bruce Siegel, MD, president and CEO of AEH, wrote to the senators.

Some hospital data already are being reported, including the Medicare data that are used to create the Overall Star Rating for hospitals. CMS briefly suspended the ratings to address shortcomings identified by hospitals before resuming them in late 2017 with some changes.

But hospital advocates responding to the senators made clear that they viewed the revised star ratings as still falling far short of providing reliable data for patients.

“While the goal of the Star Ratings is to make Medicare quality data more understandable for patients, their families, and caregivers to help inform choices among facilities, the methodology is seriously flawed, despite attempts on the part of CMS to improve it, and should be suspended until all calculation errors are corrected,” Chip Kahn, president and CEO of the Federation of American Hospitals (FAH), wrote in a letter to the senators.

Supported Efforts

Despite the cautionary notes, hospital organizations identified several areas of transparency in which they support new federal action.

HFMA in its letter urged legislation instructing CMS and its administrative contractors to make price-sharing information for specific services available to Medicare beneficiaries for services provided in settings other than hospital outpatient departments and ambulatory surgical centers.

Additionally, hospital advocates have worked with the National Association of Insurance Commissioners (NAIC) and other stakeholders to develop NAIC’s Health Benefit Plan Network Access and Adequacy Model Act, which provides a model state bill to ensure the adequacy, accessibility, transparency, and quality of the healthcare services offered under a network plan. One portion of the model bill that hospitals especially support focuses on decreasing the incidence of surprise bills, which have generated growing patient discontent. The bill includes disclosure-related requirements that plans establish payment programs for out-of-network healthcare professionals.

FAH urged CMS to adopt that section of the NAIC model act “as a more robust way to address the issue of surprise billing.”

Oversight from the Federal Trade Commission also is needed to monitor the growing number of state-implemented transparency initiatives for potentially anticompetitive impacts, wrote Kahn of FAH.

Federal efforts that were urged by AHA included initiatives to streamline public reporting and pay-for-performance programs and to focus those programs on “measures that matter.”

“Federal agencies should come together with providers and private payers to agree on a manageable list of high-priority aspects of care,” Nickels wrote.

Federal support—including funding—is needed to identify applicable transparency data points, AEH wrote.

“There is wide variation now in the healthcare costs of the various subpopulations Medicare and Medicaid serve,” Siegel wrote. “Policymakers should look to state-level practices to establish a baseline understanding of information currently provided, identify gaps, and institute a standardized method to share price and quality information nationally.”

State transparency initiatives include the Colorado Hospital Price Report, which is a joint project of the Colorado Hospital Association and the Colorado Division of Insurance. Every year, the initiative publishes information about hospital prices and health insurer payments on a public website, including average hospital charges and the average payment rates of insurance companies or health maintenance organizations. The report includes the 25 most common inpatient medical conditions and surgical procedures performed by hospitals.

“States have led a number of price transparency efforts, with more than 40 states now requiring or encouraging hospitals to report information on charges or payment rates and make that data available to the public,” Nickels wrote.

The Association of American Medical Colleges (AAMC) told the senators that the conversation about price transparency must be broadened to allow a patient to accurately assess both the quality and cost of a service.

“To conduct this assessment, pricing of a healthcare service should include appropriate contextual information, including risk-adjusted quality metrics and reporting on longer periods of time to account for a complete episode of care,” Karen Fisher, JD, chief public policy officer for AAMC, wrote to HFMA News about its recommendations.

AAMC also urged that comprehensive claims data be made available to all providers.

Congressional transparency efforts also should mitigate “undue burdens” on providers and minimize patient confusion, Siegel said.

“Today’s complex billing system did not develop overnight and will require thoughtful examination involving all stakeholders to find the right solutions that will benefit patients,” Nickels wrote.


Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Tuesday, April 17, 2018