CMS proposes pulling requirement for hospitals to post private Medicare Advantage rates

A sticky note says Medicare on top of a pile of money
The Centers for Medicare & Medicaid Services proposes that hospitals no longer have to post privately negotiated Medicare Advantage rates in their Medicare charge reports. (Getty/Steve Dunning)

The Biden administration is proposing to repeal a Trump-era requirement for hospitals to post their privately negotiated Medicare Advantage rates in their Medicare cost reports.

The Centers for Medicare & Medicaid Services (CMS) released the proposed fiscal 2022 Hospital Inpatient Prospective Payment System and Long-Term Care Hospital rule late Tuesday. The agency also projects hospital payments to increase by $2.5 billion in the 2022 fiscal year that begins Oct. 1.

CMS said it is getting rid of the requirement that was in the 2021 final rule published by the Trump administration because it could impose an “unnecessary burden on hospitals.”

The decision to pull the requirement was met with cheers from the hospital industry.

“We have long said that privately negotiated rates take into account any number of unique circumstances between a private payer and a hospital and their disclosure will not further CMS’s goal of paying market rates that reflect the cost of delivering care,” said Tom Nickels, executive vice president for the American Hospital Association, in a statement.

The requirement also exceeded CMS’ statutory authority, said Beth Feldpush, senior vice president of policy and advocacy for America’s Essential Hospitals, in a statement.

CMS' decision comes as hospitals have had mixed results complying with another price transparency rule that requires them to post payer-negotiated rates online for certain shoppable services.

CMS is also proposing a 2.8% increase in operating payment rates for acute care hospitals that participate in the Hospital Inpatient Quality Reporting Program and are users of meaningful electronic health records, according to a fact sheet on the rule.

CMS also projects that the increases will result in a $3.4 billion boost to hospitals in the federal fiscal year 2022, which starts in October. The agency also projects that Medicare disproportionate share hospital payments and uncompensated care payments will decrease next fiscal year by nearly $1 billion.

“Overall, CMS estimates hospital payments will increase by $2.5 billion,” the fact sheet said.

CMS is also proposing to extend an add-on payment for new COVID-19 treatments through the end of the fiscal year when the public health emergency ends. The emergency is likely to run through the rest of 2021.

CMS also proposed several measures aimed at addressing health equity in medical education. The agency aims to add 1,000 new Medicare-funded medical residency positions to train physicians.

The new training slots will be distributed to qualifying hospitals “including those located in rural areas and those serving areas with a shortage of healthcare professionals,” the agency said.

CMS also wants comments on how to revise several agency programs to add reporting on health disparities like social risk factors and race and ethnicity.

For long-term care hospitals, the agency is proposing to increase payments by approximately 1.4%, or $52 million.

The agency is seeking public comments on the entire proposed rule until June 28.