The Biden administration has received independent research reports from several organizations in support of its bid to increase fines on US hospitals that fail to meet federal price-disclosure requirements.
It is unclear what role these reports played in the recent decision by the Centers for Medicare & Medicaid Services (CMS) to proceed with the planned penalty hike.
Still, it is likely that the research submitted by the nonprofit organizations Community Oncology Alliance and Patient Rights Advocate served as something of a counterweight to objections raised by influential hospitals and medical trade groups, such as the Alliance of Dedicated Cancer Centers (ADCC). This group represents MD Anderson in Texas, Memorial Sloan Kettering in New York City, Dana-Farber in Boston and several other dedicated cancer hospitals that have a special exemption from Medicare's usual fee structure, the prospective payment system (PPS).
The CMS announced the planned penalty hike on November 2, proposing a steep increase in the fines payable by hospitals if they do not reveal their spending.
Whereas currently the top penalty is $300 a day, or about $109,500 for the year, under the new proposal, starting in the new year, the top penalty for failure to meet federal standards on price transparency will reach $2 million a year for large hospitals.
The ADCC had tried to delay the move: it had urged CMS to defer enforcement actions and policy changes tied to violations of the hospital price-transparency mandate for a year after the eventual end of the COVID-19 public health emergency. The group also suggested CMS wait to assess how well insurers comply with a separate mandate on price disclosures. (This separate and broader mandate, known as the Transparency in Coverage rule, is slated to take effect in July 2022.)
The ADCC also argued strongly against the whole idea of a mandate for posting of hospital prices, arguing that "comprehensive and individualized financial counseling" better serves patients.
"Furthermore, the vast majority of services at our hospitals are available only to established patients as part of an overall custom cancer treatment plan of care. In other words, a new patient cannot choose to come to one of our centers for stand-alone imaging, laboratory, or surgical services," the ADCC said.
ADCC made these arguments in comments to CMS on the draft version of the 2022 Medicare hospital outpatient payment rule. This payment served as the vehicle for raising the transparency fee. ADCC member hospitals, including MD Anderson, also offered their own comments on the payment rule, echoing the alliance's concerns about the transparency mandate.
"Cancer is a complex disease that is not always 'shopable,' " MD Anderson said in its comment to CMS. "Treating cancer can require multiple layers of therapies that often change over the course of treatment. Patients need episodic estimates that include cancer drug, radiation, and surgical treatments with incorporated payer benefits and up-to-date financial status of deductibles and out-of-pocket maximums."
Life Savings in "Serious Jeopardy"
The CMS also received many appeals that appear to have come from individuals who backed the tougher stance. (These comments were posted on the federal Regulations.gov website in many cases without names, but they serve as part of the record for this rulemaking.)
One unidentified commenter thanked CMS for proposing to "strengthen the rule requiring hospitals to post their prices — which can finally put runaway healthcare cost trends in reverse."
"I recently got diagnosed with cancer and am reeling from the 'surprise' news about the cost of tests that I must have. I have saved carefully my whole life to ensure a viable life after retirement, and now those savings are in serious jeopardy," the commenter wrote. "It almost makes one lose one's will to fight against one's illness."
CMS should press hospitals to "lay out clear pricing standards," that commenter continued, "so that all patients can easily access them directly or through consumer-friendly software applications like Expedia."
It may take quite a while for the day to arrive, if it ever does, when Americans can shop around for medical treatments with the ease in which they now use websites like Expedia for travel deals.
But the initial posting of hospitals' pricing data and the expected flood of financial information next year from insurers is intended to help rein in rising US costs.
Consulting and software firms such as Turquoise Health and FireLight Health already are looking for ways to package the data revealed on pricing to find ways to help consumers manage their costs.
With that aim also in mind, Community Oncology Alliance and Patient Rights Advocate each provided CMS with the results of independent research in support of higher penalties for hospitals for failing to meet transparency standards.
Both groups independently mined data posted by certain hospitals and assessed how well they were complying with the federal mandate.
Medscape Medical News examined these reports and requested follow-up data from FireLight, Turquoise, and Moto Bioadvisors, the firm that conducted research on compliance with the price transparency for COA.
This analysis focuses on the group of 11 dedicated cancer hospitals that are exempted from normal Medicare payment rules. They are:
City of Hope National Medical Center, Los Angeles
USC Kenneth Norris Jr. Cancer Hospital, Los Angeles
University of Miami Hospital and Clinics, Miami
H. Lee Moffitt Cancer and Research Institute Hospital, Tampa
Dana-Farber Cancer Institute, Boston
Memorial Hospital for Cancer and Allied Disease, New York City
Roswell Park Memorial Institute, Buffalo
Arthur G. James Cancer Hospital and Research Institute, Columbus, Ohio
American Oncologic Hospital (Fox Chase Cancer Center), Philadelphia
The University of Texas MD Anderson Cancer Center, Houston
Fred Hutchinson Cancer Research Center (Seattle Cancer Care Alliance), Seattle
These dedicated cancer centers have a special exemption, created by Congress in the 1980s, that allows them not to follow normal hospital payment rules.
There has been criticism over the years of this special treatment given these centers. At present, the Government Accountability Office (the investigative arm of Congress) has a standing recommendation for lawmakers to look to change Medicare payments for these 11 centers so they are closer to those for other oncology hospitals.
When it comes to the new CMS hospital-price posting requirements, the 11 PPS-exempt hospitals have little excuse not to comply, said Ryan Merkow, MD, of Northwestern University.
Merkow was the lead author of a study published in 2019 that found hospitals affiliated with PPS-exempt cancer centers and other elite cancer centers that received Medicare's normal pay rates had generally similar patient comorbidity burden and cancer surgery outcomes. Those findings raised questions about why some cancer centers merit special treatment from Medicare, Merkow and co-authors wrote.
In an interview with Medscape Medical News, Merkow argued that the public deserve more open disclosure about the PPS-exempt hospitals, including posting information about their prices.
"They are getting this special treatment and there's a lack of transparency about how they are actually being evaluated compared to other cancer centers," Merkow said.
In its comment to CMS on the proposed fine, Turquoise Health pointed out that "several vendors that offer full compliance support solutions for prices that are accessible to all hospitals, and the administrative burden associated with transparency should not be considered a valid reason for noncompliance."
Turquoise Health, for example, has developed rankings ranging from 1 to 5, with 5 being considered fully compliant. At the request of Medscape, Turquoise research staff twice assessed how well the PPS-exempt cancer hospitals have done in complying with CMS' transparency rules.
Turquoise's researchers gave only three centers the top mark of 5 in terms of disclosure: Brigham and Women's, Dana-Farber Cancer Institute, and the University of Miami.
Turquoise gave a grade of 4 to Fox Chase Cancer Center and the City of Hope Comprehensive Cancer Center. Earning a grade of 2 was the USC Norris Comprehensive Cancer Center.
Turquoise gave its lowest mark of 1 to H. Lee Moffitt Cancer Center, Arthur G. James Cancer Center, MD Anderson Cancer Center (listed as Memorial Hospital for Cancer and Allied Disease), Memorial Sloan Kettering, and the Seattle Cancer Care Alliance.
Roswell Park had received a score of 1 in the rating Turquoise Health ran for Medscape in August, but the hospital has since posted more information, and its score is under review, Turquoise Health told Medscape in November.
Roswell Park told Medscape that it is "working to develop a secure, customized tool that will provide a realistic estimation of costs patients are likely to face in connection with their care."
"This additional resource will provide much more meaningful and relevant guidance to current or prospective patients than is required by law. We also offer individualized cost-estimation services as part of the financial counseling we offer to every Roswell Park patient," the hospital stated. It describes itself as the only comprehensive cancer center designated by the National Cancer Institute in upstate New York.
The ratings from Turquoise were mirrored in some cases by data submitted to CMS by the nonprofit group Patient Rights Advocate.
This group submitted to CMS a report that its staff wrote with FireLight Health LLC, titled the "Semi-Annual Hospital Price Transparency Compliance Report July 2021." The report put MD Anderson and Memorial Sloan Kettering into the noncompliant category.
In a comment to CMS, Cynthia A. Fisher, the founder of PatientRightsAdvocate.org, and Linda M. Bent, the group's president, had argued that the current penalty of $300 a day for failing to meet federal transparency standards amounts to "a rounding error for even a small hospital."
"Only with system-wide transparency of real prices (not estimates), clear pricing data standards, stronger penalties, and robust enforcement, will patients and employers be empowered to lower their costs of healthcare and coverage," Fisher and Bent wrote in a comment to CMS.
"The healthcare future that Americans need is one we can trust — where we no longer fear financial ruin from unknown bills that arrive weeks and months after care," they added.
Kerry Dooley Young is a freelance journalist based in Washington, DC. She is the core topic leader on patient safety issues for the Association of Health Care Journalists. Young earlier covered health policy and the federal budget for Congressional Quarterly/CQ Roll Call and covered the pharmaceutical industry and the Food and Drug Administration for Bloomberg. Follow her on Twitter at @kdooleyyoung
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Cite this: Some Cancer Hospitals Fail to Reveal Prices: 'Not Shopable' - Medscape - Dec 02, 2021.