Seniors at leisure discussing medicare prices.

Medicare and Price Transparency

The Centers for Medicare & Medicaid Services (CMS) is proposing measures to address the health equity gap, ensuring patients have access to all of the information they need to make well-informed decisions regarding their health care.

In accordance with the Competition Executive Order signed by President Biden, CMS is beefing up its efforts to enhance medicare price transparency, hold hospitals accountable, and provide consumers with all of the information they require to make well-informed healthcare choices.

Biden made it clear in the executive order that a key to price fairness is medicare price transparency. The new order will prevent medical entities from engaging in price competitions at the expense of their patients’ health. Hospitals that continue these practices will face high penalties.

The proposed rule includes taking action in price transparency, health equity, increasing access to emergency care in rural areas, and patient safety.

Price Transparency

Hospitals have been required to make pricing information available online as of January 1, 2021. This medicare price transparency helps Americans know exactly what to expect to pay for services and procedures performed in a hospital setting. The CMS has been actively pursuing complaints from consumers who have reported hospitals not following this order.

The CMS has proposed an increase in the current monetary penalty for hospitals that do not comply with the new rule. If the proposal is accepted, hospitals with a bed count of 30 or few will face a $300 daily penalty. Larger hospitals with more than 30 beds could face a penalty of $10 per bed per day. The maximum daily penalty is $5500. If a large hospital were to be penalized for an entire year, that would add up to $2,007,500.

Of course, many hospitals have complied, which has caused the public to notice a wide disparity in pricing. Pricing is often based on what has been negotiated with insurance plans, and those negotiations are made on an individual hospital basis.

Health Equity

Health equity has been a problem for many, many years. Recent events have pushed those problems to the surface and have forced lawmakers into taking action. The CMS is currently asking for input on how to get more accurate, comprehensive, and actionable reports on the health disparities among social risk factors, race, and ethnicity.

CMS is seeking comments about the collection of data and the analysis and reporting of results from a variety of demographics, including, but not limited to, disability status, race, LGBTQ+, socioeconomic status, and Medicare/Medicaid dual eligibility.

Medicare cost transparency in rural emergency room hospitals.
Rural hospitals have left people with no access to emergency care and crucial services.

Rural Access to Emergency Care

In the last eleven years, 138 rural hospitals have closed across the United States. Among these hospitals, a disproportionate number of them have been located within communities with a higher population of people of color and higher poverty rates.

Individuals in rural areas have a shorter life expectancy and higher mortality rate but have fewer providers. These factors lead to worse health outcomes than their counterparts in urban communities.

The closing of so many rural hospitals has left people with no access to emergency care and crucial services. Congress has enacted Section 125 of the Consolidated Appropriations Act (CAA) of 2021. The CAA established a new type of provider for Rural Emergency Hospitals (REHs).

REHs will be required to furnish emergency department services and observational care and may provide outpatient health services. In this proposed rule, CMS is requesting information to inform the development of requirements. They are seeking input on health and safety standards, quality measures, and payment provisions that would apply to Rural Emergency Hospitals (REHs).

The new REH provider designation will apply to items, services, and procedures performed on or after January 1, 2023.

Patient Safety

CMS is reversing changes made to care settings in 2021. It will increase the safety of Medicare beneficiaries by evaluating the settings in which surgical procedures take place.

Inpatient-Only (IPO) procedures are only paid by Medicare if they take place in an inpatient setting. This list was being phased out, but that elimination phase has been halted. There has been re-evaluation for services that require an inpatient setting. Any procedure not expected to be performed in an outpatient setting will remain on the IPO list. Upon reviewing the list, CMS found no services that met the criteria for removal.

This is a big step in patient safety as some of the procedures being removed from the list included musculoskeletal services – limb amputations and invasive spinal procedures.

The CMS has proposed to put all of the eliminated procedures back on the IPO list in 2022. As with the other measures, the CMS is still seeking input on the various factors involved in this decision-making.

CMS is proposing to bring back the safety standards it uses to decide whether a procedure should be reimbursed in an Ambulatory Surgery Center (ASC) setting that it discontinued in 2021. CMS is proposing to implement a nomination process where the public may submit suggested procedures deemed safe for Medicare beneficiaries to perform in the ASC setting.

This list is not exhaustive. There are also changes being made in radiation experiences and outcomes, and many of the lessons we learned during the COVID-19 pandemic are still being studied and implemented.

Make sure to read our article Top 5 Things You Should Know Before Joining Medicare

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