In a special episode of Voices in Healthcare Finance, HFMA President and CEO Joe Fifer discusses HFMA’s comments regarding a CMS proposed rule that would require the controversial public release of rates hospitals negotiated with health plans. CMS’s final rule will come out early this month. Here is an excerpt.
Rich Daly: Despite HFMA’s strong support over the years for price transparency and extensive work in this area, HFMA has real concerns with CMS’s payer-specific negotiated charge requirement. Maybe you could tell us a little bit about why that is.
Joe Fifer: I actually think that CMS’s intent here in their rhetoric is directionally correct. When they talk about where they want to go with transparency, it’s pretty hard to argue because what they’re saying is very similar to what we’ve said in that it’s important to provide patients with information so they can make decisions [about their care]. The issue here, though, is that I think they’re missing some key requirements.
The first kind of environmental thing is what CMS is doing with the payment rate transparency — and quite frankly going back to their chargemaster requirement, which we all know doesn’t really help very much. I think there’s a high possibility that could be confusing to the public as opposed to being helpful. The bare minimum of what is required to do for CMS in this chargemaster space is not helpful, and my fear would be just posting these payment rates without the context would be more confusing to folks than not.
There’s another environmental issue here that I think is — and I don’t have a solution for this one, quite frankly — it sometimes seems that where CMS is going here is treating all these shoppable services as operating in pure market conditions like any other retail good that we acquire in our society. The fact of the matter is, healthcare isn’t a pure market. In its simplest terms, hospitals have half of their revenue coming from fixed payment governmental sources.
So, to put that into context, a question I ask often is, how does a hospital with, say, a 25% Medicaid mix compete on price with a hospital that has a 5% Medicaid mix? We all know that Medicaid, across all the different programs and all the different states, is paying significantly under cost. So to start with, there’s just not a pure market out there in healthcare that would support a pure market approach in terms of posting of these payment rates.
The other one is, the requirements, as they’re stated now, fail to provide patients and consumers with the information they need to actually make a value-based decision about where to receive care. It’s not specific enough to them, and therefore we think it might be more confusing and not matching up with the rhetoric that CMS talks about.