News | Transparency

Supporters of releasing privately negotiated health plan rates dominate public comments

News | Transparency

Supporters of releasing privately negotiated health plan rates dominate public comments

  • Most of the public comments submitted on a CMS proposal to have hospitals list rates negotiated with health plans have supported the proposal.
  • Clarifications on the proposal issued this month by CMS officials include the definition of “gross charges” as all items and services in the chargemaster, plus charges for “any service packages that are provided by the hospital.”
  • Among as-yet unanswered questions were how hospitals can comply if their health plan contracts bar them from releasing those negotiated rates.

Halfway through the 60-day comment period on a controversial proposal to require hospitals to release their privately negotiated rates for health plans, nearly all the public comments submitted so far have come from supporters of the transparency proposal.

The CY20 Medicare Outpatient Prospective Payment System (OPPS) proposed rule would require hospitals — starting Jan. 1, 2020 — to make public a list of their standard charges, which the Centers for Medicare & Medicaid Services (CMS) defined as both gross charges and payer-specific negotiated rates.

Although researchers and transparency advocates have said the public is not very interested in healthcare transparency tools, most of 99 public comments on the transparency proposal halfway to the Sept. 27 due date came from anonymous supporters of it.

National hospital groups said they also were putting together their responses to the transparency proposal, which many industry officials worry could complicate negotiations with health plans, carry large logistical challenges and high costs, and provide little benefit to consumers. Hospital advocates have urged hospital executives to submit any concerns they have on the proposal to CMS during the comment period.

Some clarification offered

In the month since the rule was issued, hospital officials have communicated with CMS through a variety of forums over concerns with the rate posting proposal and CMS officials have clarified some points of it.

Details clarified earlier this month in a call with hospital officials included:

  • Using in gross charges all of the items and services in the chargemaster, plus charges for “any service packages that are provided by the hospital”
  • Ensure rates publicly listed for at least 300 shoppable services should be based on health plan-specific negotiated rate — not on claims-based variations in payment
  • Provide health plan-specific negotiated rates for itemized “ancillary services” customarily provided along with the primary shoppable service
  • Left format up to hospitals for presenting health plan-specific rates for at least 300 shoppable services in a “consumer-friendly” manner
  • Describe all the items and services for the 300 “shoppable services” in “consumer-friendly” language, as the hospital defines it
  • Provide health plan-specific prices of shoppable services, which include prices for both the primary service and associated ancillary services 
  • Post in advance the rate established with a health plan in cases where prices vary based on packaging with other services or service-delivery location

Outstanding questions remain

But CMS officials were unable to provide immediate clarification or answers to a range of additional questions hospital officials raised in calls this week. Instead they said they would respond to them when the rule is finalized — required before Nov. 1 — if the questions were submitted in writing.

The unanswered questions hospitals raised about the proposed transparency proposal included:

  • How to clarify in the rate list that prices vary because some include payments for employed physicians.
  • How to list drug prices when health plan payment is based on quantity used.
  • How to fund the initiative, which was expected to cost at least “tens of thousands of dollars” not the CMS-estimated roughly $1,000.
  • How to list health plan-specific rates based on multiples of diagnosis-related groups.
  • How to comply with the proposal when their health plan contracts prohibits the hospital from disclosing rates.

About the Authors

Rich Daly, HFMA senior writer/editor

is based in the Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

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