Legislation to enhance healthcare pricing and billing transparency takes a big step forward in the House

A newly merged bill would strengthen price transparency mandates, install new billing requirements for off-campus outpatient departments and add to site-neutral payment policies.

September 14, 2023 1:45 pm

A slew of provisions on healthcare transparency took a step closer to becoming federal law as three House committees last week merged separate bills into a single draft.

The resulting bill is just about set for consideration by the full House, where bipartisan support for the major provisions was apparent in the committee phase. The new draft is the product of collaboration among staff of the Education and Workforce, Energy and Commerce, and Ways and Means committees, each of which had passed its own transparency bill since May.

As with most things in Congress, nothing is certain about the road to passage for the Lower Costs, More Transparency Act, said Andrew Donahue, MHA, CPA, director of healthcare finance policy with HFMA. But even amid a looming standoff over legislation to fund the government in the federal fiscal year that begins Oct. 1, a floor vote on the transparency bill could very well happen within the next week or two, Donahue said.

Locking in transparency requirements

The majority of the 230 pages in the bill draft are devoted to establishing or expanding price transparency standards in various healthcare settings.

For hospitals, the provisions largely mirror the CMS rules that have been on the books since 2021, including 2023 sub-regulatory guidance that narrowed the window for noncompliant hospitals to make corrections and 2024 proposed regulations that would enforce stricter formatting requirements and publicize noncompliant hospitals even before they have been fined.

One concern for hospitals, the American Hospital Association (AHA) noted in comments to House leaders, is the legislation’s lack of recognition of price estimator tools as a valid means of complying with the requirement to provide prices for shoppable services. Hospitals that have invested in those tools no longer would be able to use them to comply.

Maximum fines would be higher for many hospitals. The penalty ceiling would remain $300 per day for hospitals with 30 or fewer beds, increasing by $10 per bed per day for hospitals with 31 to 100 beds. Those rates have been in place under the regulations since 2021 and 2022, respectively.

In the new bill, however, hospitals with 101 to 300 beds are subject to a rate increase of $15 per bed per day. The multiplier jumps to $20 for hospitals with 301 to 500 beds and to $25 for those with more than 500 beds.

Thus, a 550-bed hospital would be looking at a penalty of nearly $2.5 million for a six-month stretch of noncompliance, compared with about $1 million under the current regulations. While any additional bed after 550 currently does not add to the hospital’s penalty, no such cap is in the drafted legislation (although such a limit could be included in issued regulations). In addition, all hospitals with more than 30 beds would face higher penalty rates if they go a year without complying.

Transparency for other settings and stakeholders

Other price transparency requirements in the bill draft pertain to:

  • Clinical diagnostic labs
  • Imaging centers
  • Ambulatory surgical centers
  • Health plans (similar to the regulations already in place)
  • Pharmacy benefit managers

Medicare Advantage (MA) health plans would have to provide taxpayer ID numbers for each of their contracted providers, along with data on incentive payments and recoupments for each provider.

The bill also requires reports to Congress on the:

  • Efficacy and administrative burden of price transparency reporting, along with recommendations for additional sites that should be subject to transparency requirements
  • State of vertical integration in MA
  • Impact of Medicare regulations on provider and payer consolidation

Striving for parity in payments

The legislation’s most direct impact on provider payments would be to require site-neutral Medicare payments for drug administration services furnished at off-campus outpatient departments. Such services would be paid at the physician fee schedule rate instead of the hospital outpatient department rate, creating savings of $3.8 billion over 10 years, according to projections by the Congressional Budget Office.

Another provision gives policymakers insight into hospital billing practices by requiring off-campus outpatient departments to bill under a unique national provider identifier (NPI) as a condition of receiving Medicare payment. However, a similar clause applying to commercial payments in the Ways and Means Committee’s draft did not make it into the consolidated bill.

When the Medicare provision was included in the Energy and Commerce Committee’s bill in May, the AHA said the obligation for hospitals to attest to having a unique NPI for each off-campus facility would be problematic.

“We are very concerned about this requirement given that past CMS review and approval of similar attestations has been extremely burdensome and difficult,” the AHA stated.

Health plan fiduciaries also would have a guaranteed right to audit all de-identified claims and encounter information to determine the equanimity of provider payments, including those made through value-based payment arrangements.

One feature of an earlier committee bill that did not make it into the merged legislation was a provision mandating disclosure of provider ownership information. The requirement, seen as an effort to gain insight into private equity ownership of hospitals, was left out after Wall Street firms reportedly lobbied against its inclusion.

The political calculation

Although Republicans have a slim majority in the House and thus chair the committees that collaborated on the new bill, Democratic support probably will be needed to secure passage, Donahue said. Some Republicans, including those who serve rural districts where hospitals are struggling, may object to the bill.

Rep. Frank Pallone (D-N.J.), ranking member on the Energy and Commerce Committee, joined the three committee chairs in sponsoring the new legislation. The Democratic caucus is split on the bill, Donahue said, but Pallone’s endorsement and the support for the provisions as seen in the committee phase suggest the party can contribute a sufficient number of votes.

After that, the bill would need to pass the Senate, but that is unlikely to be a problem.

“The Senate has really deferred to the House on a lot of this,” Donahue said.

Whereas a major healthcare bill such as the No Surprises Act was tucked into a larger government funding package in late 2020, Donahue said the Lower Costs, More Transparency Act could move as stand-alone legislation in the coming weeks if necessary.

Future possibilities

Although the provision on drug administration arguably is the most contentious in the bill for healthcare providers, “as far as site-neutral [payment] goes, this is about as modest an entry point as [legislators] could have conceived,” Donahue said. “They have total liberty to go much larger than this. They probably will down the road, but this is a really small step in that direction.”

In the upper chamber, senators such as Bernie Sanders (I-Vt.) have pushed a more sweeping healthcare transparency agenda than the version seen in the House bill.

Sanders authored a bill draft that prohibits facility fees billed by both on- and off-campus outpatient departments and caps prices for evaluation and management, telehealth and other low-complexity services provided by such departments. The cap would be based on the qualifying payment amount for an item or service as determined under the No Surprises Act.

Another Senate bill, the bipartisan Site-based Invoicing and Transparency Enhancement (SITE) Act, would require off-campus outpatient departments to use not only a unique NPI on commercial insurance claims but also a HIPAA X12 837P transaction form or CMS 1500 form for all such claims.

The SITE Act also would eliminate the grandfather clause in the Bipartisan Budget Act of 2015 that exempted off-campus outpatient departments from wide-ranging site-neutral payment requirements if the departments were in operation or under construction when the legislation was passed. Similar language to the SITE Act was included in an early House bill draft before being trimmed during the committee deliberation phase.


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