May 03, 2018

CMS Proposes Online Hospital Charge Disclosure

In the recently released proposed rule for the Inpatient Prospective Payment System (IPPS), the Centers for Medicare and Medicaid Services (CMS) sought a more effective way to give patients online access to standard hospital charges for determining the cost of their hospital care.

If adopted, the proposal would expand on a provision of the 2015 IPPS final rule (79 FR
50146). It requires hospitals to make public either a list of the charges for provided items and services or their policies for allowing the public to view service prices in response to a patient inquiry. Designed to improve cost transparency, the policy stems from Section 2718(e) of the Public Health Service Act, which was enacted as part of the Affordable Care Act.

Added requirements in the 2019 IPPS proposed rule would achieve a key goal for the new Secretary of Health and Human Services, Alex Azar. In one of his first public speeches after confirmation, Azar highlighted HHS’ commitment to price transparency, especially in hospitals, to improve patient awareness of medical care costs. The secretary believes patients would be more inclined to choose the most efficient setting for their care if they were more conscious of its underlying expense. As a result, the 2019 IPPS proposed rule would require hospitals to post their charges via the Internet in a machine-readable format.

Curiously, the proposed 2019 IPPS rule also states that HHS is concerned that a lack of price transparency is contributing to the growing trend of “surprise bills,” or charges assessed to patients after care from out-of-network physicians and hospitals. The American College of Radiology (ACR) is concerned that the inpatient reimbursement rule specifically refers to surprise out-of-network bills from anesthesiologists and radiologists. The ACR believes discussing physician billing is outside the scope of the proposed hospital regulations.

Since surprise bills typically stem from the actions of private insurers, the ACR traditionally tracks this topic at the state level. The College is working in close consultation with the American College of Emergency Physicians, American Society of Anesthesiologists and College of American Pathologists to better educate the public about the root cause of surprise bills.

Insurers often attempt to shift the blame for excessive out-of-network bills to physicians when surprise bills are actually caused by “surprise” coverage gaps in cheap insurance plans and their inadequate provider networks. As a result, surprise bills stem from insurers who prey on the consumers’ desire for low-cost insurance and fail to disclose potentially costly flaws in their plans.

In response, a coalition of national medical specialty societies including the American College of Radiology developed consensus principles to ensure physicians are adequately reimbursed for out-of-network care. The coalition is pushing state legislatures to give physicians, including radiologists, the option to either pursue alternative dispute resolution with private payers or receive “usual and customary” reimbursement rates determined via an independent database of charges not affiliated with insurers. The FAIR Health database, a collection of more than 25 billion private health care and 20 billion Medicare claims, is typically regarded as the gold standard for analyzing and establishing usual and customary payments for care delivered by out-of-network physicians. The ACR strongly supports its use.

The ACR will comment on this rule to clarify the roles radiologists and insurers play in providing hospital services and to ensure that burdensome requirements, which typically reside outside the scope of the IPPS rule, do not extend to physicians.