Physician Groups Demand Payor Transparency

A coalition of 12 medical groups sent a letter to the Centers for Medicare & Medicaid Services Administrator responding to a request for information on price transparency. The letter demanded transparency by insurance companies and called for them to make information on usual physician charges available to the public.

Request for Information

On May 7, 2018, the Centers for Medicare & Medicaid Services (CMS) published a proposal to revise the Medicare hospital inpatient prospective payment systems for FY2019. The proposed rule would establish new requirements or revise existing requirements for quality reporting by specific Medicare providers. CMS requested that any interested parties submit comments by June 25, 2018.

Specifically, CMS is proposing to update its requirements for hospitals based on Section 2718(e) of the Public Service Act, which requires hospitals to establish and update a list of the hospital’s standard charges for items and services provided by the hospital. CMS is concerned that patients are challenged by insufficient price transparency. For example, patients may be surprised when they receive out-of-network bills for hospital-based physicians who provide services at in-network hospitals.

CMS is proposing to require hospitals to make a list of their current standard charges available on the Internet and to keep it updated annually. CMS is also considering other actions that would help patients to understand what their potential costs may be for services they obtain at the hospital and allow patients to compare charges across hospitals.

Participating Organizations

Numerous organizations and individuals responded to the request for information. Of note was the letter sent by a coalition of medical organizations:

• American College of Emergency Physicians
• American Academy of Emergency Medicine
• American College of Osteopathic Emergency Physicians
• American College of Radiology
• American Psychiatric Association
• American Society of Anesthesiologists
• Emergency Department Practice Management Association
• Healthcare Business Management Association
• Medical Group Management Association
• Physicians for Fair Coverage
• Radiology Business Management Association
• Society for Academic Emergency Medicine

The American College of Emergency Physicians and Emergency Department Practice Management Association also sent separate comments to CMS on the topics of price transparency, regulation issues, and out-of-network costs.

Price Transparency From Insurers

The coalition congratulated CMS for its improved price transparency and accountability for patients. The coalition then offered several suggestions.

As to what types of information would be most beneficial for patients or how hospitals can best enable patients to use charge and cost information in their decision-making and how CMS and providers can help third parties create patient-friendly interfaces with the data—the coalition stated that it is payer’s responsibility provide clear information to consumers about coverage costs.

Patients, said the coalition, do not fully understand their health plans or what high deductible, co-insurance, deductibles, and co-pays mean.

It is unfair to place responsibility for providing cost and charge information exclusively on hospitals, physicians, or patients, said the medical groups. They argued that insurers should explain the manner and methodology that they use to adjudicate patient plan benefits in clear and specific terms.

Too often, they wrote, payers hide information saying that claim adjudication is proprietary or confidential.

The coalition explained that even if providers and hospitals are able to provide pricing information in advance to patients, this would accomplish little as far as transparency without accompanying information from insurers.

At a minimum, they wrote, patients should know whether a physician is in-network and whether they will pay the same cost if they have to receive unanticipated care from an out-of-network physician. Patients, in other words, should be provided with reasonable and timely access to in-network physicians.

The coalition suggested that the best information to provide to patients is the usual and customary (U&C) physician charge from a not-for-profit, independently owned and operated entity. Such an entity would provide patients access to an open and transparent database that collects physician charge data from actual claims information and makes that data commercially available to the public for consumption.

The coalition noted that FAIR Health, Inc. is the gold standard in databases and that it was found to be the best national U&C charges database to determine out of network reimbursements in two separate studies by the non-partisan and objective research organization at the University of Chicago.

Informing Patients of Costs in Advance

CMS asked whether health care providers should be required to inform patients about how much out-of-pocket costs will be before providing that service.

The coalition answered that CMS should distinguish between unanticipated and scheduled care costs.

With unanticipated care, informing patients about their costs in advance could be a violation of the Emergency Medical Treatment and Labor Act (EMTALA) and could have negative consequences for patient care. EMTALA requires that patients receive a medical screening examination and stabilizing treatment without regard to financial means or insurance status. EMTALA prevents hospitals from signage in the emergency department regarding prepayment of fees or co-pays and deductibles which could have the effect of discouraging patients from receiving emergency care.

The coalition noted that it is difficult to know what a patient’s costs will be before they are properly diagnosed and stabilized. For example, in emergency care, two of the most common patient complaints are chest pain and abdominal pain. These symptoms could be caused by a large range of diagnoses that each require differing tests, exams, and treatments.

When care is scheduled in advance, the coalition believes that any requirements about price transparency should be narrowly tailored to not cause unreasonable regulatory burdens. The coalition also believes that any obligations on physicians and hospitals should be accompanied by similar obligations on insurers to achieve network adequacy standards and in-network contracting terms that are fair and reasonable.

The coalition urged CMS to make its coverage terms and conditions available to its consumers. It argued that the physician fee schedule should not be used as a marker to assess market-based reimbursement standards for Medicare. It noted that the HHS (Health and Human Services) Office of the Inspector General has acknowledged that neither Medicare nor the Medicaid fee schedule are appropriate references when defining “usual charges.”

Enforcement Mechanisms

CMS requested feedback on the most appropriate way for it to enforce price transparency requirements. They asked if hospitals should attest to meeting requirements in an agreement and how CMS should best assess compliance. CMS also asked whether it should impose civil money penalties on hospitals that fail to comply with making standard charges publicly available.

The coalition answered by saying that additional civil penalties are not appropriate because hospitals already face fraud and abuse potential penalties. The coalition suggested that Medicare Administrative Contractor (MAC) guidance and review would be an appropriate mechanism to address transparency issues.

Medigap Coverage

CMS requested input on how Medigap coverage affects patients’ understanding of out-of-pocket cost and the challenges that providers face in communicating information about these costs. CMS asked about the changes that should be made to support providers in informing patients about the costs associated with Medigap coverage.

The coalition said that Medigap should be required to provide the information about out-of-pocket costs, just as any other health plan provider. It argued that coordination of benefits and issues of primary versus supplemental insurance are best explained by the health plans themselves.

The medical groups also noted that physicians are unlikely to know that a patient has a Medigap policy, its terms and conditions, or have access to information about reimbursement until after the claim has already been adjudicated by the supplemental insurer. The coalition said that requiring a hospital or physician to explain the terms and conditions of Medigap policies would be an unreasonable regulatory burden.

More Physician Societies Join the Call for Payer Transparency

In a press release, Paul Kivela, M.D., FACEP, president of the American College of Emergency Physicians (ACEP) said, “Emergency physicians believe that it is the insurers’ responsibility to provide clear information about medical costs upfront to patients…While providers and hospitals may be able to provide raw prices to patients, without accompanying information from insurers, little can actually be achieved in the form of true transparency for the patients.”

Dr. Kivela also asserted that doctors do not want to put patients in the position where they have to make life and death decisions based on the cost of care. He added, “Health insurance companies have a long history of denying coverage for emergency care…No insurance policy is affordable if it abandons you in an emergency.”

Andrea Brault, M.D., MMM, FACEP, Chair of the Board for EDMPA, chimed in, “The Emergency Department Practice Management Association (EDMPA) has been working with many other specialties to make sure patients can access information on their health care coverage and are not surprised by a gap in their insurance…We want to ensure that health insurance companies pay the usual, customary, and reasonable rate for out-of-network care before asking patients to cover the rest of the bill.”