Speak out to end discrimination that blocks competition

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“Differences in payment rates have unnecessarily shifted services away from the physician’s office to the higher paying hospital outpatient department,” admits CMS in the proposed 2019 rule for Medicare outpatient payment. CMS further reveals that payments made through Medicare’s Hospital Outpatient Prospective Payment System (OPPS), “[have] been the fastest growing sector of Medicare payments out of all payment systems under Medicare Parts A and B.”

The fact is, Medicare’s discriminatory payment policies have wrought severe damage to America’s base of independent physicians. “The national share of hospital-employed physicians increased from 30% to 48% from 2010 to 2016,” according to a recent Health Affairs study. And the NY Times reports: “Big hospital groups are also eroding primary care practices: They employed 43 percent of the nation’s primary care doctors in 2016, up from 23 percent in 2010.

Independent physicians aren’t the only victims; so are the patients increasingly pushed to higher-cost hospital-owned facilities. In addition to the increased costs, quality also suffers when patients are steered away from physicians in independent practice. 

Congress began work to correct this damage by lowering Medicare payments to new off-campus, hospital-owned facilities in Section 603 of the Bipartisan Budget Act of 2015. However Congress protected higher payment to existing off-campus sites. In the rule now under consideration, CMS proposes to further enforce site-neutral payment for “clinic visits” (but not procedures) at all off-campus sites. The rule would also require site-neutral fees for newly expanded services at grandfathered facilities and would end their potential eligibility for higher drug payments through the 340B program.

Discriminatory pricing is a major problem, but offering a partial solution will not provide a meaningful fix. Removing top-down price controls altogether is crucial to reigniting competition that will increase the availability of lower cost, high quality care.

Here’s how you can help:

(Don’t forget comments are due by 5pm Eastern on 9/24.)

1) Copy the following suggested comments:

Dear Administrator Verma,

I appreciate this opportunity to comment on the proposals outlined in Section X of CMS-1695-P to partially curb discriminatory pricing that harms patient access to independent physicians and drives up costs to patients and taxpayers.

Pricing schemes that steer patients to higher-cost, hospital-owned settings, and impede the ability of facilities to compete on price and value, need to end.

Unfortunately, the CMS proposals only begin to offer half an answer. Rolling back discriminatory pricing is a step in the right direction. The higher fees paid to hospitals, without a corresponding benefit to patients, have caused predictably harmful results. But without also removing price controls, the market mechanisms that drive competition, lower prices, and increase quality and access will remain unable to properly function.

CMS could take a giant step toward rationalizing policy, eliminating misallocation of resources, and allowing supply and demand to equilibrate by setting a site-neutral reimbursement rate and letting voluntary decisions set prices through balance billing.

In conclusion, I urge CMS to take bolder steps based on the principle summarized by Secretary Azar, “value is best determined by markets and consumers, not arbitrary rules and central planners.”

2. Visit the comment submission page and paste in the comment.

The form for submitting comments is at: https://www.regulations.gov/comment?D=CMS-2018-0078-0002

Feel free to customize the wording to your liking before submitting.

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