The Centers for Medicare and Medicaid Services is pushing forward price transparency rules as it sets inpatient payment rates for next year. Not long after the agency published the proposed rule on Monday, hospital groups, which have been lobbying to keep negotiation rates with insurers under wraps, pushed back.
The proposed rule would set Medicare payment rates to hospitals for inpatient procedures and long-term care hospitals for 2021. CMS plans to boost inpatient payments to hospitals by about 1.6% under the Inpatient Prospective Payment System, spending roughly $2.07 billion more on inpatient care next year as a result.
Changes to CMS’ Long-Term Care Hospital Prospective Payment System would reduce payments to long-term care hospitals by about .9 percent, or a total of $36 million. The proposed changes would go into effect starting on October 1 and would apply to roughly 3,200 acute care hospitals and 360 long-term care hospitals.
As part of the proposed rule, CMS is requiring hospitals to provide data on the median rates for inpatient services that they negotiate with insurers, both through Medicare Advantage and third-party payers. The agency said it was considering using this information to set Medicare payment rates for hospital procedures.
A 2019 study from RAND estimated that private health plans pay 204% more than Medicare for inpatient procedures, though rates vary widely with each hospital and market.
“We believe that because hospitals are already required to publicly report payer-specific negotiated charges, in accordance with the Hospital Price Transparency Final Rule, that the additional calculation and reporting of the median payer-specific negotiated charge will be less burdensome for hospitals,” the proposed rule stated.
Hospitals, on the other hand, have pushed back against disclosure requirements since CMS published the Hospital Price Transparency final rule in November. One month later, the American Hospital Association and three other organizations sued HHS over the requirements.
In response to CMS’ most recent proposed rule, AHA Executive Vice President Tom Nickels wrote that disclosing negotiated rates would not reflect the cost of care.
“We are very disappointed that CMS continues down the unlawful path of requiring hospitals to disclose privately negotiated contract terms,” he said in a statement.
Photo credit: feellife, Getty Images
