New CMS transparency rule looks like a failure, most healthcare professionals say

Since CMS issued a new hospital price transparency rule Nov. 15, federal officials, hospitals, insurers and others have weighed in on it.

The final rule — released with a health plan transparency proposal that would require insurers to share price and cost-sharing information with members before treatment — requires hospitals to disclose negotiated rates with insurers beginning in 2021.

Hospitals are fighting the disclosure rule. The American Hospital Association, Association of American Medical Colleges, Children's Hospital Association and Federation of American Hospitals said in a joint statement that will join with member hospitals to file a legal challenge to the rule because it "threatens to confuse patients" and doesn't provide them with out-of-pocket cost information.

Tom Nickels, executive vice president of the American Hospital Association, told The Wall Street Journal: "What they’re doing is illegal" and hinders hospitals' ability to freely negotiate with insurance companies.

Insurers also panned the new rule.

Blue Cross Blue Shield Association President and CEO Scott Serota said: "As the Centers for Medicare and Medicaid Services noted in the proposed rule, the publication of negotiated rates for medical services may have negative, unintended consequences — including price increases — as clinicians and medical facilities could see in the negotiated payments a roadmap to bidding up prices rather than lowering rates."

An employer group gave a mixed review to The Wall Street Journal. Brian Marcotte, CEO of the National Business Group on Health, told the newspaper companies want their workers to know real healthcare costs but expressed concerns that the disclosure rule could lead to increased costs, as insurers, hospitals and employers respond to having information on negotiated rates from various organizations.

The federal government defended the disclosure rule.

HHS Secretary Alex Azar said the government was on "very sound legal footing for what we’re asking. And we certainly hope that America's hospitals will want to respect their patients' right to know what the price of the service is before they're asked to purchase it," according to the Wall Street Journal.

Zack Cooper, a health economist and associate professor at New Haven, Conn.-based Yale University, suggested to the newspaper that the disclosure rule will lead to healthcare prices tightening, predicting that "the range of prices will go down," but the mean price may climb. He said different markets will likely see varied outcomes.

Read the full Wall Street Journal report here.


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