CMS Moves toward transparency, price parity

As published by the Association of Independent Doctors (August 7, 2018)


In the last two weeks, the Centers for Medicare & Medicaid Services have proposed two rulings that would directly advance two of AID’s main goals: price transparency and site neutrality. 

Here’s a summary of what the moves would mean for patients and doctors, and how we can help make sure the rulings — which both face hospital opposition — take effect Jan. 1.


Under a rule finalized Thursday by the Trump administration, hospitals will be required to post online a list of their standard charges, according to a report published in The Hill. Starting Jan. 1, hospitals will be required to update the information annually. CMS said the new rule would require hospitals to post the information online to “encourage price transparency” and improve “public accessibility.”

“This is a small step towards providing our beneficiaries with price transparency, but our work in this area is only just beginning,” CMS Administrator Seema Verma said in a speech last month. “Price transparency is core to patient empowerment and making sure American patients have the tools they need so they can make the best decisions for them and their families.”

Site Neutrality

On July 25, CMS released a rather murky announcement, which several media reports mischaracterized, about a proposal to extend site neutrality to hospital outpatient clinics. Such a move would level out payments between hospital-owned clinics and private physicians’ offices. If these payments were equal, hospitals would be far less interested in buying medical groups and turning independent doctors into more profitable employees for the hospital, a trend that has caused health-care prices to soar.

AID spoke with a top CMS official to gain clarity on what the proposal really means. 

As AID has reported in the past, full site neutrality would require a change in the law, which would require an act of Congress. Though CMS supports full site neutrality, the law does not grant CMS the authority to require it. Thus, the proposed change goes only as far as CMS believes the law allows the agency to go, and stops short of full site neutrality. If enacted, the proposal would allow the following:

  • The change would affect reimbursements only for office visits at clinics that are not part of a hospital’s campus. Thus, reimbursements for procedures and for on-campus clinic visits would not change. For office visits at hospital-owned off-campus clinics, hospitals would receive the same payment that independent physician offices receive for visits.
  • The proposal extends the ruling that went into effect last year that requires hospital-owned off-campus clinics (those that aren’t part of the hospital campus), purchased after Nov. 2, 2015, to receive the same payment for visits (not procedures) as physician offices. The new proposal removes the grandfather clause and extends the ruling to apply to all off-campus clinics regardless of when they were acquired, so all office visits to off-campus clinics would be reimbursed at the physician rate.
  • Once site-neutrality is achieved for these office visits, Medicare and Medicare beneficiaries would save an estimated $760 million a year. 
  • If site neutrality for procedures at all hospital-owned clinics were mandated, taxpayers and Medicare beneficiaries would save close to $1 billion a year ($900 million), according to the Medicare Payment Advisory Commission. 
  • Full site neutrality for both visits and procedures would achieve an annual savings of $1.66 billion for just Medicare, and far more if commercial insurers followed suit.
  • For site-neutrality to apply to all procedures and all clinics, we need a change in the law. AID is working with a U.S. Congressman who has agreed to help draft that law.
  • The proposal is now in its 60-day comment period. (AID will be submitting a comment.)  After the comment period ends Sept. 24, CMS will review all comments and come out with a decision Nov. 1, which will take effect Jan. 1, 2019.  

We encourage you to submit your comments to CMS directly, or to AID for us to include in our response.

Though we still have a long way to go, we feel encouraged that government leaders are hearing the voice of independent doctors and patients, who will all benefit from price transparency and site-neutral payments.

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