Comments in Support of CMS-1717-P, Price Transparency of Hospital Standard Charges and Site-Neutral Payments

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Secretary Azar and Administrator Verma,

The Association of American Physicians and Surgeons (“AAPS”) is pleased to submit the following comments in support of the provisions in Section XVI of CMS-1717-P, “Proposed Requirements for Hospitals To Make Public a List of Their Standard Charges.”

AAPS is a non-profit membership organization of physicians and surgeons who are mostly in small, independent practices.  Founded in 1943 (and celebrating our 75th year), AAPS defends and promotes the practice of private, ethical medicine.  AAPS has members in virtually every specialty and State, and AAPS speaks out frequently about issues concerning patients and medical practice. 

Prices of medical care are too often unknown until the patient receives the bill after the fact. The proposals outlined in Section XVI take important steps to empower patients to know the true prices of needed care.

Access to honest and actual prices is fundamental to ensuring patient choice and ultimately reducing medical care costs. Currently, Americans are unable to make fully informed decisions and choose the care options that are best for them and their families. That is why we ask CMS to implement the proposal requiring hospitals to publicly disclose, online, payer-specific negotiated charges for items and services. Please do not weaken the proposal to benefit special interests at the expense of patients.

Likewise, CMS should finalize, as proposed in Section X.C., the phase-in of site-neutral payment policies that work towards ending price discrimination. Patients should not be penalized and pay higher prices simply because a hospital owns the medical practice where they receive care.  It is disappointing but telling that hospitals are aggressively fighting implementation of site-neutral payments. We encourage CMS to pursue a staunch defense of this proposal including, but not limited to, the appeal of recent court rulings that undermine these changes.

In addition, we also suggest CMS could impose payment parity more broadly. The volume control authority at section 1833(t)(2)(F) allows more substantive changes than are being proposed. CMS could, for instance, apply the PFS payment rate to the corresponding outpatient care at all hospital facilities, not only “off-campus” facilities. And additional services, besides the E&M services described in the proposal, could be shifted to a site-neutral payment rate. MedPAC has recommended 24 services for payment equalization across settings, so there is clearly additional slack remaining for CMS to pull in. https://goo.gl/ci3Zfw

Although the move toward transparency and ending government-determined payment disparity is welcome, it ultimately will not fix the root problem—the absolute lack of market-driven prices in Medicare.  Properly functioning markets do not require mandates; they make price information easily available or risk losing paying customers. Additionally, regulatory-imposed transparency and pricing  provides the opportunity for rules to be written to favor entities with the most political influence.

CMS, in addition to encouraging predatory behavior by hospitals, is also starving the more efficient physician-owned centers by not allowing them to charge a reasonable fee. Starving everybody is not a good answer. Medicare should set a site-neutral reimbursement rate and allow facilities to balance bill. Facilities should compete for business by posting their prices and Medicare reimbursement. Those who refuse to do so are likely to be avoided by price-sensitive patients. People are smart enough to figure out what it means when restaurants don’t put a price on the menu.

CMS must end harmful top-down price controls, but until they are gone, it should not use price fixing to discriminate against independent small practices in favor of large health systems. The heavy-handed controls not only pay certain facilities more than others, but compound the harm through the prohibition on balance-billing for Medicare services.

In conclusion, we thank you for proposing changes that put patients first. Please do not hesitate to reach out to us for further discussion.

Sincerely,

Jane M. Orient, MD

Executive Director