Price Transparency: Two Rules for the Same Issue

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Original story posted on: November 20, 2019

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    2020 Medicare Physician Payments and Quality Program Final Rule: New Rules & Challenges

One rule is proposed; the other is now the final rule on price transparency.

The Centers for Medicare & Medicaid Services (CMS) recently issued two rules intended to increase the transparency of pricing in the healthcare system, continuing its efforts to provide patients with more data to make informed decisions about their healthcare choices. 

One rule is the Transparency in Coverage proposed rule, issued in partnership with the U.S. Department of Labor (DOL) and Department of the Treasury. Under this rule, most health plans would be required to make available to participants, beneficiaries, and enrollees (or their authorized representatives) personalized out-of-pocket cost information for all covered healthcare items and services, through an Internet-based self-service tool and in paper form, upon request. This will enable consumers to get estimates of their cost-sharing liability for healthcare for different providers, allowing them to both understand how costs for covered healthcare items and services are determined by their plan, and shop and compare costs for healthcare before receiving care.

Also, according to the proposed rule, most health plans would be required to make available to the public (including stakeholders such as consumers, researchers, employers, and third-party developers) the in-network negotiated rates with their network providers and historical payments of allowed amounts to out-of-network providers, through standardized, regularly updated, machine-readable files.

Comments are due 60 days from the release of the proposed rule.

The final rule on the hospital Outpatient Prospective Payment System (OPPS), also included price transparency provisions applied to hospitals. Effective Jan. 1, 2021, for each hospital location, hospitals must make public all their standard changes (including gross charges, payor-specific negotiated charges, de-identified minimum and maximum negotiated charges, and discounted cash prices) for all items and services, online, in a single digital file in a machine-readable format. Specifically, hospitals must do the following:

  • Include a description of each item or service (including both individual items and services and service packages) and any code (for example, HCPCS codes) used by the hospital for purposes of accounting or billing.
  • Display the file prominently and clearly identify the hospital location with which the standard charge information is associated, on a publicly available website, using a CMS-specified naming convention.
  • Ensure that the data is easily accessible, without barriers, including ensuring it is accessible free of charge, does not require a user to establish an account or password (or submit personal identifying information), and is digitally searchable.
  • Update the data at least annually, and clearly indicate the date of the last update (either within the file or otherwise clearly associated with the file).

Last week, the National Committee on Vital and Health Statistics met in Washington, D.C. They discussed a proposal to move forward on implementing ICD-11 in the United States. Specifically, they are recommending to the U.S. Department of Health and Human Services (HHS) that it begin the planning process by undertaking efforts to determine cost, timing, copyright issues, and other factors involved in the implementation. The aim is to avoid the difficulties encountered during the ICD-10 implementation, and provide more certainty to the industry regarding the timing and implementation steps. These are recommendations that HHS is not required to follow, but they come from an appointed committee of industry representatives, which gives them great weight.

On Oct. 9, 2019, CMS issued a proposed rule to modernize and clarify the regulations that interpret the Medicare physician self-referral law (often called the “Stark Law.”) The law rightly recognizes that a profit motive could influence some physicians to order services based on their financial self-interest, rather than the good of the patient. For this reason, the Stark Law prohibits a physician from making referrals for certain healthcare services payable by Medicare if the physician (or an immediate family member) has a financial relationship with the entity performing the service. In short, a physician cannot refer a patient to any entity with which he or she has a financial relationship. The Stark Law also prohibits the entity from filing claims with Medicare for services resulting from a prohibited referral, and Medicare cannot pay if the claims are submitted.

The proposed rule would create new, permanent exceptions to the Stark Law for value-based arrangements. Because the consequences of noncompliance with the Stark Law are so dire, officials noted, physicians and other healthcare providers may be discouraged from entering into innovative arrangements that would improve quality outcomes, produce health system efficiencies, and lower costs (or slow the rate of growth). The proposed rule would permit physicians and other healthcare providers to design and enter into value-based arrangements without fear that legitimate activities to coordinate and improve quality of care for patients and lower costs would violate the Stark Law. The exceptions would apply regardless of whether the arrangement relates to care furnished to people with Medicare, or other patients.

The new value-based exceptions include safeguards to ensure that the Stark Law continues to provide meaningful protection against overutilization and other harms. These proposals recognize that incentives are different in a healthcare system that pays for the value, rather than the volume, of services provided.

EDITOR’S NOTE:

Stanley Nachimson is a former career professional with the Centers for Medicare & Medicaid Services (CMS). Mr. Nachimson, who is a permanent panelist on Talk Ten Tuesday, will lead an educational webcast on the Physician Fee Schedule Final rule for ICD10monitor on Wednesday, Dec. 11, 2019 at 1:30 p.m. EST. Additional information can be found here. https://shop.icd10monitor.com/2020-medicare-pfs-final-rule-webcast-p/ai1211219.htm

Stanley Nachimson, MS

Stanley Nachimson, MS is principal of Nachimson Advisors, a health IT consulting firm dedicated to finding innovative uses for health information technology and encouraging its adoption.   The firm serves a number of clients, including WEDI, EHNAC, the Cooperative Exchange, the Association of American Medical Colleges, and No World Borders.  Stanley is focusing on assisting health care providers and plans with their ICD-10 implementation and is the director of the NCHICA-WEDI Timeline Initiative.  He serves on the Board of Advisors for QualEDIx Corporation.

Stanley served for over 30 years in the US Department of Health and Human Services in a variety of statistical, management, and health technology positions.  His last ten years prior to his 2007 retirement were spent in developing HIPAA policy, regulations, and implementation planning and monitoring, beginning CMS’s work on Personal Health Records and serving as the CMS liaison with several industry organizations, including WEDI and HITSP.  He brings a wealth of experience and information regarding the use of standards and technology in the health care industry.

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