Experts say CMS is still committed to price transparency after proposal to pull MA requirements

Hospital prices
CMS aimed to ease hospitals' administrative burden when proposing to repeal a requirement for hospitals to post private Medicare Advantage contract terms in their Medicare cost reports. (Alessandra Bergamin/KHN illustration; Getty Images)

Do not expect the Biden administration to pull away from price transparency even though the administration wants to pull a requirement for hospitals to post Medicare Advantage rates, experts say.

The proposal included in a hospital inpatient payment rule released late Tuesday is more aimed at easing administrative burdens for hospitals still struggling due to the pandemic, several experts said.

“The repeal of this requirement more falls into the bucket of easing hospitals’ burden as opposed to the agency’s stance on hospital price transparency,” said Caitlin Sheetz, head of analytics and a director for the consulting firm ADVI, in an interview with Fierce Healthcare.

The Trump administration last fall finalized a requirement for hospitals to post their private Medicare Advantage contract terms in their Medicare cost reports.

But the requirement drew widespread condemnation from the hospital industry.

“This policy will require hospitals to divert critically needed resources during this historic pandemic to administrative tasks that will not benefit patients,” said Ashley Thompson, senior vice president for public policy analysis and development for the American Hospital Association, in a statement in September 2020 after the final rule was published. “We do not believe CMS has the authority to compel the disclosure of these terms and our legal challenge remains ongoing.”

RELATED: KFF: Hospital comparison shopping still difficult despite new price transparency rule

The proposed rule, which also includes inpatient payment rates for the 2022 federal fiscal year that starts in October, does not focus on the statutory authority or whether such a requirement is necessary to help patients understand their prices.

It only says that the proposed requirement could create an undue burden on hospitals.

“It’s really hard to know exactly why they made the decision that they made,” said Tom Kornfield, senior consultant for the firm Avalere Health, in an interview with Fierce.

The proposed rule includes several other policies aimed at helping hospitals ease their burdens while still fighting the pandemic. For instance, it called for the use of payment data from 2019 to calculate the rates for the 2022 fiscal year.

Normally CMS uses data from the prior two years, which would require using hospital utilization data from 2020. The reason was that healthcare use fluctuated wildly in 2020 due to the pandemic as hospitals were forced to temporarily cancel or postpone elective procedures and patient volumes were hesitant to get care.

“In over a decade I have been doing this I have never seen them do that,” said Sheetz of ADVI.

But while the rule doesn’t signal that price transparency is going away, it could give a hint of how CMS will enforce other requirements already in place.

Starting this year, hospitals had to post payer-negotiated rates for 300 shoppable services online. Multiple analyses and studies have shown that hospitals have posted a mixed record in complying with the rule.

CMS has not said how they are going to be enforcing the rule, which comes with a $300 a day penalty for noncompliance.

The proposed rule could signal that CMS is going to give hospitals some leeway on price transparency requirements.

“I would say that, in a vacuum, I would think it is very unlikely they would put out a rule that is easing up hospital administrative burden they would then ramp up audits for the hospital price transparency rule,” Sheetz said.