Price Transparency

News Briefs: CMS says it plans aggressive price transparency enforcement

January 26, 2021 10:28 pm

CMS has notified hospitals that they should expect aggressive enforcement of new price transparency rules, including via audits slated to start in January.

CMS’s notice, issued on Dec. 18, stated that beginning in January the agency planned to audit the websites of “a sample of hospitals” to determine compliance with the requirements, which took effect Jan. 1. It also said it planned to investigate rule-related complaints that it receives and to review “analyses of non-compliance.”

One compliance approach adopted by hospitals, especially lower-revenue organizations, involves using averages of health plan rates for all services, equipment and drugs. But CMS officials participating in a Dec. 8  webcast with hospitals described that approach as non-compliant with the new rule.

In response to CMS’s apparent opposition to the rate-averaging approach, hospitals are working with their attorneys to devise a legal defense for its use, industry advisers said. 

New legislation seeks to take unwelcome surprises out of patient billing

After on-and-off negotiations that spanned the 2019-20 congressional term, the bipartisan, bicameral No Surprises Act was included in a sweeping legislative package that became law in late December.

There could be far-reaching effects when the main provisions begin in 2022.

The primary aim of the law is to ensure patients have to pay only their in-network cost-sharing amount, including deductibles, for emergency care and in nonemergency situations when choosing an in-network provider isn’t an option.

Out-of-network providers will be prohibited from balance-billing patients unless they follow strict notice-and-consent procedures. Those include providing an estimate of charges at least 72 hours before the delivery of services.

To resolve payment for out-of-network bills, the first step will be negotiations between providers and insurers that can last up to 30 days. If negotiations fail, a baseball-style arbitration process will be utilized, with the arbitrator required to choose one side’s offer rather than landing on a compromise figure.

The arbitrator will rule based on:

  • Median in-network rate
  • Information related to the provider’s training and experience
  • Market share of the parties
  • Previous contracting history of the parties
  • Complexity of the services provided 

— Nick Hut, HFMA senior editor

Haven to dissolve after 3-year effort to lower combined employee healthcare costs

Three years after the CEOs of Amazon, Berkshire Hathaway and JPMorgan Chase launched Haven Healthcare, the joint venture is shutting down at the end of February. Haven is a Boston-based not-for-profit entity whose goal was to lower healthcare costs for the three companies’ combined 1.2 million U.S. employees.

“In the past three years, Haven explored a wide range of healthcare solutions, as well as piloted new ways to make primary care easier to access, insurance benefits simpler to understand and easier to use, and prescription drugs more affordable,” the Jan. 4 dissolution statement read.

The joint venture’s dissolution reflects the complexities involved in delivering employee healthcare, which along with the cost of U.S. care delivery, is a topic that has garnered much attention from industry analysts. (See, for example, the Eye on Washington column by Gail Wilensky, PhD, “Status check on Haven’s ambitious healthcare venture,” published in the October 2020 issue of hfm.)

The end of Haven does not mean an end to the three companies’ healthcare-focused efforts. “Moving forward, Amazon, Berkshire Hathaway, and JPMorgan Chase & Co. will leverage these insights and continue to collaborate informally to design programs tailored to address the specific needs of their own employee populations,” the statement said.

Industry observers should stay tuned to see what new initiatives and innovations might yet arise from Haven’s ashes.

— Deborah Filipek, HFMA senior editor

Medicare phases out the inpatient-only list, backs off further 340B payment cuts

Medicare will phase out the inpatient-only (IPO) list over three years but won’t implement further cuts that were proposed for the 340B discount drug program, according to a CY21 final rule issued in December.

The CMS Outpatient Prospective Payment System final rule confirmed the elimination of the 1,700-procedure IPO list over three years, starting with 300 primarily musculoskeletal-related services in 2021. The IPO list will be completely phased out by 2024.

“The services on the inpatient-only list are often complex and complicated surgical procedures that require the close care and coordinated services provided in a hospital inpatient setting,” Tom Nickels, executive vice president for the American Hospital Association, said in a written statement.

For procedures removed from the IPO list, CMS will “indefinitely” exempt them from site-of-service claim denials under Medicare Part A, eligibility for referrals to recovery audit contractors (RACs) for noncompliance with the 2-midnight rule and RAC reviews for “patient status.”

CMS backed off its proposal to pay for drugs acquired under the 340B program at average sale price (ASP) minus 28.7%. Instead, Medicare will maintain the 2018 formula of ASP minus 22.5%.  


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