Capping healthcare provider payments based on Medicare reimbursement rates isn't necessarily an adequate solution to charge variations and ballooning care costs, Robin Gelburd, president of FAIR Health, an independent nonprofit that advocates for healthcare transparency, writes in Health Affairs.
Ms. Gelburd writes in response to another Health Affairs piece by Jonathan Skinner, PhD, a professor at Dartmouth; Elliott Fisher, MD, director of the Dartmouth Institute for Health Policy and Clinical Practice; and James Weinstein, DO, president and CEO of Lebanon, N.H.-based Dartmouth-Hitchcock health system. Drs. Skinner, Fisher and Weinstein wrote limiting prices to 125 percent of what Medicare pays would eliminate the most extreme charge variations and protect consumers from excessive healthcare provider market power.
Ms. Gelburd argues using Medicare rates as the basis for price caps would present numerous challenges. "For example, Medicare does not assign a value to all codes; a separate system would be needed to price services not addressed by Medicare's fee schedule," she writes.
Additionally, although Medicare rates are adjusted for regional variations, the program has broadly defined geographic regions and might not take into account specific, actual market conditions, according to Ms. Gelburd. Many providers also say Medicare rates don't cover the cost of providing care. "Capping all payments based on existing Medicare rates, even with an increase of 25 percent, will not address adequately the underlying challenges in establishing reasonable, competitive, and fair health care pricing," she writes.
Instead, she proposes learning from New York policymakers who "sought a way to use market data to establish consumer protections without imposing Medicare-based or other fixed price controls on healthcare providers — in short, codifying the usual, customary, and reasonable standards at levels everyone could accept." In 2014, New York state enacted a law that requires health insurers to give consumers detailed information on plan reimbursement, comparing rates to the 80th percentile charge for a particular service, according to a FAIR Health database. The law also limits patients' financial liability for emergency services, as well as for balance bills for services consumers reasonably thought were covered by their health plans.
"Procedures such as those already adopted in New York are far more likely to receive broad support than would a price cap," Ms. Gelburd writes. "They protect the legitimate interests of consumers, providers, and payers alike, and maintain the availability of healthcare services."
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