- President Donald Trump's administration is pushing back a proposal that would have required hospitals to make public the secret rates it negotiates with insurers. CMS said it received more than 1,400 comments on revealing rates and will respond to those comments in an upcoming rule.
- The news came in the agency's publication of its final outpatient payments rule Friday, which did include plans to implement controversial site neutral provisions that hospitals have opposed and a federal judge has blocked.
- Also in the final rule, CMS is cutting rates in the 340B drug payment program. The current payment of 6% above the average sales price is being slashed to 22.5% below the ASP. That move was also decried by hospitals and is being contested in court.
The delay of the transparency rule is a win for payers and providers, who were for the most part adamantly opposed to revealing negotiated rates. It would have been a landmark shift for the healthcare system.
The proposal first put forward in July went one step beyond a CMS move from last year, which required hospitals to post the list price, or the initial price before insurance negotiations, online in a machine-readable format. Many criticized the move and said the data was useless for consumers with insurance coverage.
Hospitals and payers argued the move would threaten competition and harm patients. And some legal experts are skeptical CMS even has the authority to compel hospitals to unveil pricing information tucked into contracts with insurance plans.
The initial proposed rule from CMS called for hospitals to disclose "payer-specific" negotiated rates for at least 300 "shoppable services."
The insurance lobby said the rule would lead to higher prices. After seeing rates in a region, the lowest-paid hospital would demand higher prices, essentially creating a floor for pricing. The hospital lobby has said it would fuel anticompetitive behavior among payers and threaten access to care.
While presumably pleased with the rolling back of price transparency requirements it has previously opposed, the American Hospital Association railed against CMS for going forward with two provisions blocked by courts and mostly opposed by providers.
"The final rule's continued payment cuts for hospital outpatient clinic visits not only threatens access to care, especially in rural and other vulnerable communities, but it goes against clear congressional intent to protect the majority of clinic services," AHA Executive Vice President Tom Nickels said in a statement.
Nickels said the cut to 340B "also defies the judgement of the courts, further straining hospitals serving their communities."
CMS acknowledged the legal difficulties of site neutrality in a statement, but stuck by its plans. "We do not believe it is appropriate at this time to make a change to the second year of the two-year phase-in of the clinic visit policy," the agency said. "The government has appeal rights, and is still evaluating the rulings and considering, at the time of this writing, whether to appeal from the final judgment."
CMS estimates the new policy would save Medicare enrollees $14 on average each time they visit a hospital-owned off-campus site for outpatient services. Overall, the change would save Medicare $800 million next year.
As for 340B, the agency is appealing that ruling and said it solicited comments in the case the decision does not go its way. The comments are included in the final rule.
CMS is also shifting where profitable procedures can be done. The agency is removing total hip replacement from the inpatient-only list. The procedure can now be conducted at outpatient settings. CMS will allow total knee replacements to be done at an ambulatory surgical centers.
This move is likely to attract a wave of investment from private equity firms into orthopaedic groups.