Payers Admonish OPPS Rule, Assert Damage to Competition
The Outpatient Prospective Payment System proposed rule prevents payers from negotiating lower prices, damaging competition and raising premiums, AHIP says.
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- Payer organizations are voicing their opposition to CMS’s Medicare Outpatient Prospective Payment System (OPPS) rule, stating that publishing negotiations would prevent payers from obtaining lower prices.
“Publicly disclosing competitively negotiated, proprietary rates will push prices and premiums higher – not lower – for consumers, patients, and taxpayers,” Matt Eyles, president and CEO of America’s Health Insurance Plans (AHIP), said in a written statement.
Eyles argued that plans already provide price transparency tools, demonstrating a commitment to helping members make informed decisions about their plans, providers, and care costs, he said.
Furthermore, publishing negotiation information will not lower costs, he stated, but instead will lower competition thereby creating a baseline cost instead of a cap.
He cited a 2016 AHIP-affiliated study which found that out of 43 plans participating in a national survey, 31 gave their members access to price estimator tools. Many tools allowed members to compare alternatives for treatment prices, healthcare service prices, or out-of-pocket-costs.
“We also know from previous research that simply having access to a tool with such information does not increase the likelihood of using the tool, nor does it necessarily lead to lower costs,” the researchers noted.
Eyles also referenced a Federal Trade Commission 2015 blog post that argued against greater negotiated price transparency. The article stated that greater price transparency may lead to more informed healthcare spending in some areas, but when taken too far can damage competition.
“We believe it is possible to give consumers the specific kinds of information they need to make better health care choices, while avoiding broad disclosures of bids, prices, costs, and other sensitive information that may chill competition among health care providers,” the FTC authors wrote.
Instead of negotiated price transparency, AHIP has emphasized the need to hold pharmaceutical companies responsible for high medical costs through greater drug price transparency.
Recently, the organization came out in favor of the Prescription Drug Pricing Reduction Act which the Senate Finance Committee passed. Eyles also made another statement in May supporting USA Today’s endorsement of the drug advertising price transparency rule, which was struck down in court.
The American Hospital Association (AHA) joined AHIP in speaking out against the proposed Medicare OPPS rule.
“Mandating the disclosure of negotiated rates between insurers and hospitals is the wrong approach,” Rick Pollack, chief executive officer of AHA, said in a statement. “Instead, it could seriously limit the choices available to patients in the private market and fuel anticompetitive behavior among commercial health insurers in an already highly concentrated insurance industry.”
Under the proposed Medicare OPPS rule, hospitals would provide a public record of payer-specific negotiated prices for “common shoppable services” such as x-rays, outpatient visits, or any services that the patient schedules.
These would be published in a consumer-friendly, searchable, online format. The information would need to be written and presented in a clear, easily comprehensible way.
Hospitals would also have to publish “standard charges” for their items and services.
CMS’s price transparency proposals combined with their Procedure Price Lookup tool target the Medicare community, enabling them to compare their out-of-pocket costs at different hospital outpatient departments and ambulatory surgery centers.
“Under this proposal, hospitals will finally have to make their real, negotiated prices known to patients, enabling patients to shop among providers,” said HHS Secretary Alex Azar. “Healthcare leaders across the political spectrum have been talking about the need for real transparency for years. This proposal is now the most significant step any President has ever taken to deliver transparency and put patients in control of their care.”
