News 11/19/2019

Healthcare Finance: American Hospital Association, Provider Groups to Sue Over Final Rule

The American Hospital Association is among four provider organizations that plan to sue the Centers for Medicare and Medicaid Services over a final rule on price transparency.

“Because the final rule does not achieve the goal of providing patients with out-of-pocket cost information, and instead threatens to confuse patients, our four organizations will soon join with member hospitals to file a legal challenge to the rule on grounds including that it exceeds the Administration’s authority,” the organizations said.

They include the AHA, Association of American Medical Colleges, Children’s Hospital Association and the Federation of American Hospitals.

The rule will accelerate anti-competitive behavior among health insurers and stymie innovations in value-based care delivery, the groups said. Instead of helping patients know their out-of-pocket costs, the rule will introduce widespread confusion.

America’s Health Insurance Plans President and CEO Matt Eyles said neither the final rule for hospitals or the proposed rule for insurers accomplishes the goal of transparency for consumers to know their out-of-pocket costs.

Transparency should not undermine competitive negotiations to lower patients’ and consumers’ costs and premiums, he said.

Blue Cross Blue Shield Association President and CEO Scott Serota said, “Unfortunately, the rules the administration released today will not help consumers better understand what health services will cost them and may not advance the broader goal of lowering healthcare costs.”

BCBSA also said the publication of negotiated rates for medical services may have negative, unintended consequences – including price increases – as clinicians and medical facilities could see in the negotiated payments a roadmap to bidding up prices rather than lowering rates.

WHY THIS MATTERS

As Kim Buckey, vice president of Client Services at DirectPath said, “This will be tied up in the courts for years. No way will hospitals and insurers give up ‘competitive’ information without a fight.”

THE LARGER TREND

The Centers for Medicare and Medicaid Services released the two rules on Friday.

The proposed rule for insurers would require health plans to disclose, on a public website, their negotiated rates for in-network providers and allowed amounts paid for out-of-network providers.

The final rule for providers requires hospitals to make their standard charges public, including their negotiated rates with payers.

ON THE RECORD

Beth Feldpush, senior vice president of Policy and Advocacy for America’s Essential Hospitals said the rules, “would unfairly advantage health plans in negotiations with providers and threaten essential hospitals’ ability to participate in networks and maintain access to services…. Essential hospitals typically have higher costs due to their commitment to complex services vital to communities, such as trauma and behavioral healthcare.”

Read the article here.

(Susan Morse is a Senior Editor for Healthcare Finance)

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