Verma chastises industry for protecting status quo
CMS ADMINISTRATOR Seema Verma last month took providers and payers to task for getting in the way of new policies that she said will improve quality and access to care, as well as slash healthcare spending over the long run.
She was especially critical of opposition to the Trump administration’s efforts to increase price transparency, saying the industry wants to maintain the status quo even if it’s not in patients’ best interests.
“The status quo works for (hospitals and insurers) by hiding prices and they take advantage of that,” Verma said during the U.S. News Healthcare of Tomorrow conference in late November. “It’s not about the consumer. It’s not about patients.”
Her comments came in the wake of industry pushback to a final rule that forces hospitals to open their books and reveal negotiated rates with insurers, and a proposed rule that would make insurers give enrollees information about prices and cost-sharing before they receive treatment.
Hospitals and insurers say the measures will create more administrative work for them without helping patients or decreasing healthcare spending. But the Trump administration and several healthcare experts think hospitals and insurers are just looking out for themselves and their financial interests.
“These special interest groups are interested in doing things the same old way,” Verma said.
The final rule on hospital pricing is slated to take effect Jan. 1, 2021, largely because health systems claimed they would need more time to implement the requirements.
Under the final price transparency rule, hospitals must publish their standard charges online in a machine-readable format. They will need to create at least 300 “shoppable” services, including 70 selected by the CMS. Under the rule, hospitals would have to disclose the rates they negotiate with third-party payers, which some experts say could be illegal.
The American Hospital Association, Association of American Medical Colleges, Children’s Hospital Association and Federation of American Hospitals said in a joint statement last month that they will sue the federal government alleging the rule exceeds the CMS’ authority.
Hospitals have argued that making them disclose negotiated prices will increase healthcare costs by allowing insurers to collude to fix prices, a claim that many economists dispute.
“It will have a very negative impact on … competition among insurers to compete for business by entering into innovative, value-based arrangements with hospitals,” said Melinda Hatton, general counsel for the AHA.
Health plans are equally frustrated. The proposed rule, which the agency is accepting comments on until Jan. 14, would force most insurers to give consumers instant, online access to an estimate of their out-of-pocket costs. Payers would have to give members paper copies of their cost-sharing estimates on request. The CMS thinks this would reduce healthcare spending by allowing patients to shop around for the best deal before they receive treatment for schedulable, non-emergency medical services.
While saying that consumers should have access to personalized costs and quality information, Matt Eyles, CEO of America’s Health Insurance Plans, argued that the final and proposed rules fall short of achieving those goals. Transparency efforts, he said, should be focused on providing consumers with information about their out-of-pocket costs so they can make more informed decisions.
“Transparency should be achieved in a way that encourages—not undermines—competitive negotiations to lower patients’ and consumers’ costs and premiums,” he added.
Health plans would also need to make their negotiated rates for in-network providers public, as well as how much they’re willing to pay doctors who are out-of-network. The administration is confident that the new requirements will, among other things, reduce prices, another area where Verma said the industry is not being consumer-friendly.
She chided hospitals for going after patients who can’t afford to pay their medical bills, especially those without insurance.
“Not-for-profit hospitals are taking people to court over prices they would never charge anybody else,” Verma said.
Most people are frustrated with high healthcare costs, surprise billing and expensive drug prices. That’s led to calls for more government intervention in the healthcare system, including Medicare for All plans that would fundamentally change the U.S. healthcare system, Verma said.
She doesn’t think that’s the right way to go, but she understands the sentiment. “Now there are people who are calling for the complete abolishment of the insurance industry,” she said. “We should be listening. People are frustrated and they want change.”
“People are frustrated and they want change.”
Seema Verma CMS administrator