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Hospitals Challenge Price Transparency Rule

Federal Insider: January/February 2020

Hospital groups took legal action to oppose a new rule from the Centers for Medicare and Medicaid Services (CMS) that greatly expands price information available to consumers for everything from laboratory tests to surgeries. Notably, the rule requires that hospitals not only publish online their standard charges for all services but also all ­payer-specific negotiated rates for their services, which the American Hospital Association (AHA) said will confuse patients.

“Today’s rule mandating the public disclosure of privately negotiated rates between commercial health insurance companies and hospitals is a setback in efforts to provide patients with the most relevant information they need to make informed decisions about their care,” AHA and several other hospital groups wrote in a joint statement. The legal challenge from AHA and hospitals argues that the rule exceeds the administration’s authority.

According to CMS administrator Seema Verma, however, the rule will increase competition and reduce healthcare costs for consumers. “Under the status quo, healthcare prices are about as clear as mud to patients,” she said. “Today’s rules usher in a new era that upends the status quo to empower patients and put them first.”

The final rule will require hospitals to make prices public in two ways beginning in 2021. Hospitals will have to make public all charges—including payer-specific negotiated charges—via a comprehensive machine-readable file that includes billing codes. This will allow anyone with the proper software to easily analyze and publish data for use by consumers.

In addition, hospitals will have to display online so-called shoppable services in a consumer-friendly manner, including payer-specific negotiated charges, the amount the hospital is willing to accept in cash from a patient, and the minimum and maximum negotiated charges for 300 common shoppable services. Shoppable services are those that the consumer could schedule in advance, such as laboratory testing or a bundle of services like cesarean delivery.

The rule also gives CMS enforcement tools including monitoring, auditing, corrective action plans, and the ability to impose civil monetary penalties of $300 per day.

AACC Calls for Improved Coverage of Certain Cancer Tests

AACC is calling on the Centers for Medicare and Medicaid Services (CMS) to make significant changes to its proposed national coverage determination for next-generation sequencing (NGS) for Medicare beneficiaries with advanced cancer. The CMS proposal would limit Medicare payment for breast and ovarian cancer tests to those cleared by the Food and Drug Administration (FDA).

In a comment letter to CMS, AACC noted that currently FDA has not cleared nor approved any NGS tests for hereditary risk assessment of either condition. “We are also concerned that this proposal, if adopted, would further limit the ability of patients to obtain appropriate, evidence-based assessment of their hereditary risk for breast or ovarian cancer,” the association said.

In addition AACC is concerned with the agency’s decision to consider breast and ovarian cancers together as if they were synonymous. AACC commented that “many clinical trials assess only one cancer type without the other. It is important to note that although breast and ovarian cancer have similarities with respect to gene mutations and hereditary risk, there are important differences in how the two cancers originate and develop within individuals.”

The association also took issue with the CMS decision in the proposal not to cover NGS testing if a patient has previously been tested with this method, which would limit somatic cancer testing. “While repeat testing of genes for hereditary risk of cancer should not be covered, NGS testing to assemble a somatic profile of a patient’s cancer is appropriate and should be covered,” AACC wrote. “Determining the molecular profile of an advanced cancer can specifically dictate treatment and several FDA-approved treatments necessitate biomarker measurement.”

Finally, AACC recommended that CMS focus on the clinical indications with sufficient evidence based on published practice guidelines rather than a specific laboratory technology. CMS should use existing guidelines to establish the coverage policy for cancer type, genetic alteration, and treatment option.