Medicare Learning Network Webinar
Hospital OPPS and ASC Proposed Rule
Presenter: Terri Postma
Wednesday, August 14, 2019
Prepared by Julie Barnes, Maverick Health Policy, www.maverickhealthpolicy.com
These notes capture only the price transparency part of the webinar, not the ASC portion. Every effort was made to create accurate notes, but please know that there may be paraphrasing or incomplete questions or answers. There are also sections that were made more complete with information from the webinar slide deck.
Opening Remarks by CMS Administrator Seema Verma
The price transparency part of the proposed rule is CMS’ response to the June 24 Executive Order on Improving Price and Quality Transparency in American Healthcare to Put Patients First, and comments that hospital patient price info isn’t user-friendly and isn’t helping them make meaningful health care decisions.
Last year, for the first time, we required hospitals to post their charges on-line we asked for feedback on how this should work. We have seen many hospitals go above and beyond our regulations, creating great and innovative price transparency tools. We used those examples to inform our proposed rule. We have also heard that while most hospitals posted their charges to be compliant, the way most hospitals displayed the information was not user-friendly and didn’t allow for comparisons to different hospitals.
• It is the policy of the Federal Government to increase the availability of meaningful price and quality information for patients.
• The EO directs the Secretary of HHS to propose a regulation, consistent with applicable law, to require hospitals to publicly post standard charge information.
If the proposed rule is finalized, it would go into effect on January 1, 2020.
We are proposing that all hospitals will have to publish all of their payer-specific negotiated rates for all of their services organized in a standardized way so patients will be able to do an apples-to-apples comparison on the price of a procedure across hospitals. Patients will be able to see prices that are useful and meaningful for them.
We are also proposing that hospitals post on a website for 300 common shoppable services in an easy to understand format. Again, this will allow consumers will allow consumers to look up services that are not urgent and can be scheduled in advance so they can shop around and make decisions that are best for them.
• Proposed rule implements Section 2718(e) of the Public Health Service Act and improves upon prior agency guidance that required hospitals to make public their standard charges upon request starting in 2015 (79 FR 50146) and subsequently online in a machine-readable format starting in 2019 (83 FR 41144).
• Section 2718(e) requires each hospital operating within the United States to establish (and update) and make public a yearly list of the hospital’s standard charges for items and services provided by the hospital, including for diagnosis-related groups established under section 1886(d)(4) of the Social Security Act.
Specific Price Transparency Proposed Provisions
CMS is proposing that hospitals post payer-specific negotiated rates for 300 shoppable services to allow consumers to look up prices for non-urgent services. Applies to all hospitals – estimated impact on 6,000 hospitals.
We are asking for your input on what other type of pricing information and the number and type of common services that hospitals should show price information for
We also heard last year that hospitals should be held accountable, so rule proposes monitoring, auditing and imposing CMPs of over $100k per year for hospital non-compliance.
Patients should be able to shop for services not only cost but quality – we need to hear from you about how to do that. It is easier for patients to see need to see price and quality together when they are making decisions about their care. Submit formal comments by September 27, 2019.
The June 24th Executive Order on price and quality transparency directs the Secretary to increase meaningful price availability with an HHS rule to require hospitals to post prices. The OPPS is a fulfillment of that order. PHS 2718(e) requires hospitals to post charges upon request and subsequently on-line. Each hospital operating within the US must establish and update and make public an annual list of the standard charges including for diagnosis-related groups. These are the proposed changes in the OPPS rule:
Definition of hospital – institution licensed as a hospital in a state, Medicare and non-Medicare. Federally-owned hospitals, like military hospitals and tribal hospitals, meet the definitions.
Definition of hospital “items and services” to include all items and services (including individual items and services and service packages) provided by a hospital to a patient in connection with an inpatient admission or an outpatient department visit for which the hospital has established a charge Examples include: Supplies, procedures, room and board, use of the facility and other items (generally described as facilities fees), services of employed practitioners (generally described as professional charges), and any other items or services for which the hospital has established a charge
Definition of standard charge: hospital’s gross charge and payer-specific negotiated charge for an item or service. Hospitals would be required to make their standard charges public in two ways:
Machine-readable file posted online containing all hospital standard charge information (both gross charges and payer-specific negotiated charges) for all items and services provided by the hospital
Consumer-friendly format that displays and packages payer-specific negotiated charges for a limited set of ‘shoppable’ services
Proposing that hospitals make public their standard charges (both gross charges and payer-specific negotiated charges) for all items and services online in a single file that is machine-readable
Proposing that hospitals must include the following corresponding data elements:
Description of each item or service provided by the hospital
Gross charge that applies to each individual item or service
Payer-specific negotiated charge that applies to each item or service; each list of payer-specific charges must be clearly associated with the name of the third party payer
Any code used by the hospital for purposes of accounting or billing for the service (e.g. CPT, HCPCS, DRG)
Revenue codes, as applicable
Propose the following location and accessibility requirements:
Hospital may select an appropriate publicly available website for making the file public
File must be displayed in a prominent manner and clearly identified with the hospital location
Hospital must ensure the data is easily accessible and without barriers
Proposing that hospitals must display consumer-friendly charges of shoppable services. Hospitals will include charges for services that it customarily provides for a common code like DRG or HCPC code. Clearly identifies hospital, easily accessible, searchable, updated annually.
Display payer-specific negotiated charges for at least 300 shoppable services, including 70 CMS selected shoppable services and 230 hospital-selected shoppable services.
If a hospital does not provide one or more of the 70 CMS selected shoppable services, the hospital must select additional shoppable services such that the total number of shoppable services is at least 300.
Proposing to define ‘shoppable service’ as a service that can be scheduled by a health care consumer in advance.
In their display of shoppable services, hospitals would:
Include charges for services that the hospital customarily provides in conjunction with the primary service that is identified by a common billing code (e.g. CPT/HCPCS/DRG)
Make sure that the charge information is displayed prominently on a publicly available webpage and clearly identifies the hospital (or hospital location)
Information must be easily accessible and without barriers, and searchable
Update the information at least annually
Monitoring and enforcement of hospitals’ compliance with these requirements
CMS has the authority to monitor hospital compliance with Section 2718(e) of the Public Health Service Act, by evaluating complaints made by individuals or entities to CMS, reviewing individuals’ or entities’ analysis of noncompliance, and auditing hospitals’ websites:
Should CMS conclude a hospital is noncompliant with one or more of the requirements to make public standard charges, CMS may provide a warning notice to the hospital, or a corrective action plan.
If the hospital fails to respond to CMS’ request to submit a corrective action plan or comply with the requirements of a corrective action plan, CMS may impose a civil monetary penalty on the hospital not in excess of $300 per day, and publicize these penalties on a CMS website
Also propose to establish an appeals process for hospitals to request a hearing before an Administrative Law Judge (ALJ) of the civil monetary penalty
CMS is soliciting feedback on the best way to capture information on the quality of hospital inpatient care so that information can be provided to patients in a way that is useful for them when comparing care options
Quality of inpatient care – seeking comment on improving availability and access on quality of inpatient information when developing price transparency tools. Also seeking comment on improving incentives and assessing the ability of health care providers and suppliers to communicate and share charge information with patients.
Q: Concern about price transparency. Letting everyone know what charges can lead to price fixing and the charges don’t add up to acceptable or allowed amount.
Terry Answer: In the preamble we walk thru studies in impact statement that show costs will be lowered when prices are made public and consumers are allowed to shop for services. But we have heard some similar comments to yours so we would appreciate research or data or background that will help with the final rule.
Q: Particularly if you are talking about Medicare pricing, hospitals are not determining what they are paid, if it is an APC the price is fixed, do you feel like having charge data out there would confuse the patients given that the charge is different than the price?
Terry Answer: we are proposing that third-party payer rates would similarly become public so that people can determine what their out of pocket costs would be.
Q: Price transparency for gross charges, I understand. For the negotiated rates, are you anticipating that you want us to show dozens of columns to list every single contract we have, so we show Anthem v. CIGNA v. Aetna, and show every single rate for every single line item?
Terry Answer: We looked at CCIIO EDGE data to see how many different contracts are for different services. It can amount to many different contracts with different rates. So in the machine-readable file, there would be a list of hospitals items and services and a list of each payer-specific negotiated rate for each item and service.
Q: We have a number of payers where the contract prohibits us from disclosing the rates. Will we have to modify all our contracts?
Terry Answer: Legal question that we are not equipped to answer.
Q: About the definition of “customary.” For the list of 70 shoppable services you also want to include customary services. Would you consider a numeric definition of what “customary” would be?
Terry Answer: No, we haven’t addressed that. If you think we should address that we would appreciate that comment.
Follow-up Q: I was just thinking that the median dollar charges that go with those services, or if more than 50% of the services include X, Y and Z, it would be useful to have a common definition across hospitals for that.
Terry Answer: We recognize that not all hospitals provide the same ancillary services. Each hospital may have different services that are customary for a primary shoppable service so we would appreciate comments about how the hospital should make charges for primary service and any ancillary services charges available in a consumer-friendly way.
Q: There is a reference to specific MS-DRGs within the list of shoppable services, if a given hospital and payer don’t use MS-DRGs, are they exempt from that specific item within list of 70?
Hospitals must make public payer-negotiated rates for the shoppable service and any ancillary service that goes along with that services. So MS-DRGs are specific to Medicare FFS, so that would typically not be included in a payer-specific negotiated rate. The DRG for the shoppable services would be related to payer-specific negotiated rates.
Q: Question about two ways to publicize these charges, machine-readable and shoppable. Is shoppable is just a more consumer-friendly subset of the total list to be made public?
Terry Answer: Yes, the smaller list is packaged in a more consumer-friendly way, without barriers (free of charge, without establishing a user account or password or providing identifiable information). The single file machine-readable file is for third-party price transparency tool developers.
Follow-up Q: Did you define “without barriers”
Terry Answer: Yes, that’s in the rule
Q: Will this proposed rule be finalized in the Fall, it would be effective as of Jan 1, 2020?
Terry Answer: Yes
Follow-up Q: When will we know if the proposed rule is finalized? Where do I find a list of the shoppable services?
Final rule needs to be finalized by November 1. Process is: We collect comments by September 27, review them all, and create our final policies. Effective Jan. 1, 2020.
Shoppable services as proposed that CMS collect 70 of them and the hospital select 230 additional services for a total of 300 services. The 70 item list is in the proposed rule.
Q: Most hospitals don’t have multiple commercial contracts electronically or on-line, even finding contract manager software is difficult, so burden on hospitals is more than $1k estimation by CMS. Conforming with all payer-specific pricing will be an extreme burden on hospitals. Is there going to be any exceptions or financial help for smaller hospitals? What if they don’t do even 300 services that can be scheduled in advance, some rural small hospitals don’t do that many – will there be an exception?
Terry Answer: Please comment on that and suggest a more reasonable estimate of hospital burden and how many services would be appropriate.
Q: Why are the ASCs not required to post their charges?
Terry Answer: Public Service Act 2718(e) is the applicable authority. Doesn’t include ASCs. If there is a way to expand hospital definition to include ASCs we would appreciate a comment on this.
Q: Can you clarify the items in the price transparency section? In larger city hospitals, there are a lot of medical equipment and DMEs. Are you suggesting that every single item be listed next to a price?
Terry Answer: We know that as a result of last year’s guidance, that chargemaster lists can exceed 50,000 different line items. We’ve proposed a definition of items and services to include all items and services that are found in the chargemaster as well as any service packages that are provided by the hospital in connection for inpatient or outpatient service for which the hospital has established a charge.
Follow-up Q: Certain items have a better quality that help us prevent, for example, hospital-associated infections… how are we going to ensure that we still have access to an item that is a little more expensive but have better efficacy and outcome for the patient?
A: The rule is not limiting services that hospitals can provide or that patient can get it is simply listing the prices. If you want examples of how hospitals are currently making public chargemasters as a result of the January 2019 guidance, it may help you see what is already out there.
Q: By utilizing the science-based DRG system price estimates achieve much greater accuracy and detail due to the intrinsic reliance on patient condition which allows for pricing to be established before, during or after a hospitalization. What is the best way to make it clear to hospitals that they need to use the DRG system when they are posting their prices?
A: As proposed, our proposed definition of items and service would include individualized items and services as well as service packages, for example, DRGs would be a service package.
Q: Did CMS purposefully exclude estimate or estimated when defining payer-specific negotiated charges on purpose? Please comment if this is a distinction that should be made.
Does CMS use charge and rate interchangeably? Estimate or estimated is sometimes used by states.
A: If you look in the last few pages of proposed rule, in the regulation text, you will see a list of proposed definitions, including standard charges – which tracks back to the statute. You will see proposed definitions for gross charges and payer-specific negotiated charges. Oftentimes people will use charge and rate interchangeably, but for purposes of this proposed rule, we are making specific proposals for definitions for standard charge and payer-specific charge.
A: If you think charge and rates need to be qualified as different please comment on that.
Q: Will there will be clarification whether CMS took into consideration about rates. Many payers have a published rate or particular service or actual payment for service can vary from patient to patient whether the service was provided in ER, v operating room v clinic, is there clarification about what hospitals should be publishing?
The payments for actual services, for example – drugs -- are driven by how many units of the drug are provided to the patient. Are we supposed to be publishing the base rate? Or the billable units? Actual payments?
A: Answer to both is, as-proposed, the rule requires hospitals to publish payer-specific negotiated rates prospectively, when hospitals provide services and submit bills, the published rate may be different than the payment hospital actually receives. But this rule is advanced-negotiated rates that must be disclosed.
Follow-up Q: Many contracts speak to a percentage of charges – is there an expectation that we share that percentage? Or are patients supposed to be calculating those charges?
A: Hospitals are supposed to list all of their services along with the gross rate and charge that would apply for each payer by name. So if the hospital has negotiated 50% off their gross rate, than the charge reflected under the payer-specific charge would be 50% of gross charge.
Q: When you spoke of employed practitioners, does that include the provider-based RHCs?
A: As proposed, hospital items and services definition include hospital-employed practitioners. Hospital has employed certain practitioners for the purpose of providing services on behalf of the hospital, so the charges associated with those services is what the rule refers to. The preamble speaks to this.
Q: Is CMS expecting if there are flat rates that are listed in shoppable services, is this a claim amount? Is that a number that is the ballpark?
A: Proposed rule would require hospital to list their payer-specific rate charge that hospital has negotiated in advance – not claim-based.
Follow-up Q: Are hospitals going to need to come up with a flat rate for things that they currently itemize? That’s a big issue related to systems and data file maintenance.
A: If the shoppable service is an itemized service then the hospital needs to publish a payer-specific negotiated rate associated with that service and the hospital needs to list any ancillary service it typically provides associated with that service. Please provide a detailed example if you have an example that is more involved.
Q: When a hospital employs physicians, if one item listed is a CT (Cat Scan), if a non-employee physicians do the read, hospitals don’t need to report the contract of those physicians. But if another hospital employs radiologists, they do have to report the fees ? How do you make the difference clear to consumers?
A: See the preamble. This would be part of making that information consumer-friendly. Make it clear what ancillary services are part of primary shoppable service and which ones are not. We encourage hospitals to make that info as consumer-friendly so they understand what is included and what is not in a hospital-provided service.
Q: Many charge same price regardless of payer. If lab is $10, gross is same price for every payer. But payment is different depending on payer contract. Would the data we publish be $10, and then $5 for the payers that only pay 50% of gross charge.
A. Give examples, but we want payer-specific negotiated charges for each of their items and services. If we need to clarify about reimbursement v. charge then please comment on that.
Q: Hospital would have to have all that information in one file? Because drug prices depend on how much is given. So drug price is going to be meaningless. When you tell consumers just a price, it is based on a HCPCS-based quantity. Shoppable services make more sense, but putting everything you got in a big pile is different from something you can understand and search.
A: The first list is all items and services and all standard charges and that would a be machine-readable file because that information is going to be most useful to third party price transparency tools. Second set of 300 shoppable services will be useful to consumers.
Q: At CAH in Iowa, all contracts talk about discounts not charges. So true charges are all the same not related to what I am getting paid.
A. The proposed rule requires hospitals to publish the payer-specific negotiated charge.
Q: None of the contracts are automated so it will be time-consuming to build the shoppable chart. It won’t be only $1000 to do this.
A. If you think we should adjust the burden amount, please say so in your comments.
Q: How are consumers supposed to understand the difference between the shoppable service and ancillary service?
A: Each item or service where there is a primary and associated ancillary, each of those would have a payer-specific negotiated charge that would be listed.
Follow-up Q: So you would have to add them together to understand the consumer cost?
A: Hospital discretion to make user-friendly, so hospitals can add them up but this is what data elements have to be in place.