Hospitals slam CMS proposal to disclose negotiated rates

Hospitals are urging CMS to reject a proposed rule requiring hospitals to publish negotiated rates with third-party payers.

The proposal, which CMS released July 29, includes provisions in a price transparency executive order signed this year by President Donald Trump. It would require hospitals to publish all "standard charges," including the hospital's gross charges and negotiated rates with payers for an item or service, online in a machine-readable format.

Under the rule, hospitals also would be required to publish the rates they negotiate with insurers for services consumers are likely to shop for in a searchable and consumer-friendly manner. Hospitals that don't comply would be penalized.

The proposed rule builds on a current federal rule requiring hospitals to publish a list of their standard charges on the internet, but excludes negotiated rates with payers.

In a letter sent to CMS Sept. 27, the American Hospital Association said the proposal is "the wrong approach," "misses the mark" as far as increased transparency of patients' out-of-pocket costs and "exceeds the administration's legal authority."

"Instead of helping patients estimate their out-of-pocket obligations, it would introduce confusion and fuel anticompetitive behavior among commercial health insurers in an already highly concentrated insurance industry, seriously limiting the choices available to patients," the association wrote.

"In addition, the proposed approach would impose substantial burden on hospitals without a corresponding benefit for patients," the letter stated.

The Federation of American Hospitals expressed similar sentiments after the organization submitted comments to CMS about the negotiated rates proposal.

Federation President and CEO Chip Kahn said: "Patients and their families need actionable information to make their healthcare decisions. The CMS proposed regulation on negotiated price transparency wholly misses the mark on providing financial information Americans can actually use."

The transparency mandate "cannot be implemented, and HHS lacks the authority to even require these disclosures. Beyond that, if carried out, the mandate would backfire, resulting in unnecessary patient confusion and misinformation while distorting the current competitive free market," Mr. Kahn added.

Read the AHA's full letter here and the FAH's full letter here.

 

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