CMS Proposes Minimum Payment Updates, Onerous Posting Rules

The Centers for Medicare and Medicaid Services (CMS) last week released the proposed payment rule for outpatient services as well as the physician fee schedule rule. The rules provide the basis for how facilities and physicians are reimbursed under the Medicare program but also impose a series of conditions the groups must follow to receive the funding.
The outpatient prospective payment system (OPPS) proposed rule for calendar year 2020 would result in a net increase in outpatient Medicare payment rates of 2.0% on average over 2019. The most controversial non-payment-related part of the OPPS rule involves CMS’ proposal that hospitals publicly post a list of their “standard charges” – that is, gross charges and all negotiated rates for all items and services. CMS also requires the posting of negotiated rates of 300 “shoppable” services, defined as non-urgent services that are routinely provided and can be scheduled in advances.
While the public posting proposals seems to advance the idea of healthcare “transparency”, the fact is that revealing the private negotiated rates between hospitals and insurers allows commercial insurers to get a behind-the-scenes look at their competitors’ dealings with hospitals, which could, the American Hospital Association says, “fuel anticompetitive behavior.” By contrast, Massachusetts law requires providers to give information on price upon request by a patient; in addition health plans must provide real-time access and have a website with price information.
CMS also proposes in the rule to continue its cuts to the payment rate for certain drugs purchased under the 340B program to average sales price minus 22.5%. That plan has been rejected by the courts, but CMS intends to appeal. Hospitals argue that by proposing another year of cuts that have been determined to be illegal, the agency risks harming affected hospitals and reducing access to care. Instead, hospitals urge CMS to offer a plan to restore funds to the affected facilities.
CMS’ proposed rule for physician fees would update rates by 0.14% in calendar year 2020.