Verma pushes back on hospital transparency concerns

September 16, 2019 1:15 pm
  • CMS Administrator Seema Verma predicts a proposed requirement for hospitals to post negotiated health plan rates will lower prices.
  • As CMS revamps its hospital star ratings, at least one more update in early 2020 will use the existing methodology.
  • Verma underscored the need to address surprise healthcare bills, over which Congress is wrangling.

In response to concerns hospital advocates have raised about several price and quality transparency initiatives proposed by the Trump administration, one of the administration’s senior healthcare leaders said it will double down on those efforts.

In an address this week at a Washington, D.C., meeting of members of the American Hospital Association, Seema Verma, administrator of CMS, said transparency efforts will expand.

“I’ve heard the doomsday warnings about price transparency, and they typically come from those who want to protect the status quo because it works for them,” Verma said. “But it doesn’t work for patients.”

Hospitals have raised concerns about the administration’s latest transparency initiative, which would require hospitals to post all rates privately negotiated with health plans for 300 services. Among their concerns are that the requirement would cost far more than the administration’s estimate of $1,000 annually per hospital and that it would undermine their ability to effectively negotiate with health plans.

But Verma touted the outcomes of a related transparency effort in New Hampshire, where prices for some services had to be listed on a public website on which consumers could compare prices. The initiative provided “millions of dollars of savings,” Verma said.

“And it’s not only the patients that use the tools to save money,” Verma said. “Providers lowered their prices to stay competitive, reducing overall healthcare costs.”

Some providers have warned that the proposed CMS transparency requirement could increase prices if it informs hospitals that neighboring organizations are charging health plans more for services. Hospitals with lower prices might then demand the same rates.

Changes to the star-rating system are on the horizon

Verma also emphasized the importance of transparency in quality data, including the hospital overall-quality star-rating system. The administration announced in August that it would update the ratings at Hospital Compare in early 2020 but would wait until 2021 to overhaul the rating methodology, which hospitals had complained was inaccurate and misleading.

Verma said the overhaul will pave the way to “comparing peer groups and allowing customization. We heard your calls for change, and we look forward to working with you to refine the ratings.” 

As part of the rating methodology, CMS plans a Sept. 19 “listening session” in Baltimore that also will be available via webcast. The all-day listening session aims to collect broad feedback about various aspects of the star ratings, including methodology, usability, and potential future directions, according to a CMS announcement.

A CMS effort in the spring to collect public comments on star-rating changes indicated a need to make the ratings “more precise, as well as allowing more direct ‘apples-to-apples’ comparisons,” according to an agency description.

“These public comments will inform the methodology that CMS plans to ultimately propose in rulemaking in 2020,” according to a CMS statement.

CMS also is forming a technical-expert panel to advise it on changes to the ratings methodology.

CMS wants data to be more accessible

Part of Verma’s transparency push are efforts to give patients greater access to their clinical data and to require greater interoperability of electronic health record data. As part of that endeavor, the administration proposed requiring insurers in Medicaid, Medicare and the Affordable Care Act marketplaces to share claims data with patients. 

CMS also unveiled the Data at the Point of Care pilot, which will allow providers to get a claims history on their patients and to review medications, visits and previous testing. 

“More than 500 organizations representing over 50,000 providers have shown interest in this pilot,” Verma said.

Reining in surprise bills remains a priority

Verma also endorsed the legislative effort to reduce unexpected healthcare bills.

“Americans are fed up. Not only are they paying more, but they aren’t being treated fairly,” Verma said. “Like when they go to a hospital they think is in-network, and then receive bills from out-of-network providers.”

Legislation addressing the issue is advancing in Congress. Hospitals back the effort but prefer an arbitration-based approach over an insurer-backed rate-setting approach to determine payment in cases of out-of-network care. At least part of the reason that many legislators back a rate-setting approach is that it will produce more federal savings, allowing them to fund other healthcare priorities, according to former congressional staff


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