WHA Submits Comment Letter on 2020 Outpatient Rule

Concerns over CMS overreach on disclosing negotiated payments

October 01, 2019

In its comment letter submitted September 27, WHA urged the Centers for Medicare & Medicaid Services (CMS) to reconsider its controversial requirement that hospitals post proprietary negotiated rates; that provision is part of the proposed 2020 Outpatient Prospective Payment System rule. WHA noted that Wisconsin hospitals have a proud tradition of embracing transparency, highlighting its websites PricePoint and CheckPoint, which have reported pricing and quality information for 15 years. WHA has reconvened its Transparency Taskforce and found that a growing number of members are voluntarily developing tools that meet consumers’ ever-changing demands for up-front cost estimates and price transparency. Unfortunately, rather than harness the current appetite for embracing price transparency through incentives, CMS’ one-size-fitsall proposal contains new mandates that would be burdensome, likely lack legal authority, and could even be counterproductive to the goals it sets out to achieve.

The proposed rule would require hospitals to continue posting online their chargemaster but would also require them to post negotiated rates for all items and services - as well as posting 300 “shoppable” services in a more consumer-friendly format. WHA questioned how CMS could define standard charge, which has historically been understood to be the billed amount providers submit to all customers, to now mean the proprietary, payor-specific negotiated reimbursement. It also noted how such a requirement would be very complex in a state like Wisconsin which has a very competitive insurance market with numerous health insurance plans, many offering several products with varying reimbursements. In addition to the complexity of fulfilling this requirement, WHA noted the Federal Trade Commission has found that transparency for the sake of transparency can be counterproductive and may even benefit competitors more than consumers leading to price-fixing and collusion rather than bringing down prices.

Of particular concern is that CMS estimated these new mandates would require hospitals to spend only 12 hours, or about $1,000, to comply, which most believe is a gross underestimate. An average size hospital already dedicates 59 full-timeequivalent positions to regulatory compliance, with over one-quarter of those individuals being physicians and nurses. WHA noted one of its members has already voluntarily created a new cost-estimator website which requires a much higher expense and staff commitment than CMS’ estimate, and it is uncertain how much more the one-size-fits-all mandates in this rule would require. WHA urged CMS to drop the new mandate and instead focus on incentivizing providers and insurers to work together to offer consumers more ways to understand their out-of-pocket costs.

WHA also urged CMS to abandon its continued site-neutral payment cuts and repay 340B hospitals who have received payment cuts, in the wake of recent federal court rulings declaring both CMS actions illegal. While praising CMS for taking steps to address unfairness in the wage index, WHA also urged CMS to reconsider how it calibrates payments that elevate those in the bottom 25% so they do not unfairly exacerbate other issues with the wage index for hospitals in Wisconsin. Lastly, WHA praised CMS for finally clarifying a policy it has long advocated for CMS to change, as CMS proposes in this rule that hospitals need not have physicians directly supervise the initiation of outpatient therapeutic services. You can read more in WHA’s comment letter.

For questions, contact WHA Director of Federal and State Relations Jon Hoelter.

This story originally appeared in the October 01, 2019 edition of WHA Newsletter