Archive for July, 2021

U.S. Proposes Raising Penalty for Hospitals That Don’t Publish Prices

The Biden administration on Monday proposed sharply higher penalties for larger hospitals that don’t make their prices public.

The Centers for Medicare and Medicaid Services, the federal agency responsible for enforcing rules requiring hospitals publish their prices, is seeking to raise penalties as high as $2 million a year for large hospitals that fail to make prices public. Large hospitals are those with more than 30 beds.

Drug Prices Are One Focus of Biden’s Push to Boost Competition

WASHINGTON—President Biden’s executive order to promote business competition lays out a series of steps to lower prices for prescription drugs, including taking legal action against companies that cooperate to keep generic medicines off the market and allowing states and Indian tribes to import drugs from Canada.

The administration also is calling for measures to increase the use of generic drugs and other medicines known as biosimilars, which are essentially generic versions of expensive biological drugs already on the market.

Effort to Decipher Hospital Prices Yields Key Finding: Don’t Try It at Home

Most of the 20 common medical procedures I attempted to compare were among those 70. But a few, from lists of top outpatient procedures provided by the Health Care Cost Institute, were not. I decided to use the more comprehensive, less friendly spreadsheets for my comparisons, since they contained all 20 of the procedures I’d chosen.

Each carried a five-digit medical code known as a CPT, a term trademarked by the American Medical Association that stands for “current procedural terminology.” The transparency rule requires hospitals to include billing codes, because they supposedly provide a basis for price comparison, or in the rule’s jargony language, “an adequate cross-walk between hospitals for their items and services.”

Much to my chagrin, I soon discovered they don’t provide an adequate crosswalk even within one hospital.

My first inkling of the insuperable complexity came when I noticed that Sutter’s Alta Bates Summit Medical Center in Oakland listed the same outpatient procedure with the same CPT code three times, thousands of rows apart, with entirely different prices. CPT 64483 is the designated code for injection of anesthetics or steroids into a spinal nerve root with the use of imaging, which relieves pain in the lower back, legs and feet caused by sciatica or herniated discs. The spreadsheet showed a maximum negotiated price of $1,912 in row 12,718, $3,650.85 in row 19,014 and $5,475.80 in row 19,559 (let your eyes glaze over for just a few seconds, so you know what it feels like). The reason for the triple listing is tied to Medicare billing guidelines, Sutter later told me. I’ll spare you the details.

My head really began to hurt when I decided to double-check some of the prices I had pulled from the big spreadsheets against the same items on the shorter shoppables sheets. Kaiser’s prices were generally consistent across the two, but for Alta Bates, there were large discrepancies.

The highest negotiated price for removing a breast lesion, for example, was $6,156 on the big sheet and $23,069 on the shorter one. The difference seems largely attributable to the estimated cost of additional services, some rather nonspecific, that Sutter lists on the smaller sheet as accompaniments to the procedure: anesthesia, EKG/ECG, imaging, laboratory, perioperative, pharmacy and supplies.

But why not include them in both spreadsheets? And what do the two dramatically divergent prices actually encompass?

“How many bills they really represent and what they mean is difficult to interpret,” said Dr. Merrit Quarum, CEO of Portland, Oregon-based WellRithms, which helps employers negotiate fair prices with hospitals. “It depends on the timing, it depends on the context, which you don’t know.”

In some cases, Sutter said, its shoppables spreadsheets show charges not only for ancillary services typically rendered on the day of the procedure, but also for related procedures that may precede or follow it by days or weeks.

The listings for Kaiser’s ancillary services do not always match Sutter’s, which further clouds the comparison. The problematic fact of the matter is that hospitals performing the same procedures bundle their bills differently, use different medications, estimate varying amounts of time in the operating room, and utilize more or less advanced technology. And physician charges are not even included in the posted prices, at least in California.

All of which makes it almost impossible for mere mortals to anticipate the total cost of their medical procedures, let alone compare prices among hospitals. Even if they could, it might be of limited value, since independent imaging centers and surgery centers, which are increasingly common — and generally less expensive — aren’t required to report their prices.

The bottom line, I’m afraid, is that despite my efforts I don’t have anything particularly insightful to reveal about how Kaiser’s prices compare with Sutter’s. The prices I examined were as transparent to me as hieroglyphics, and I’m pretty sure that hospital executives — who unsuccessfully sued to stop implementation of the price transparency rule — are not losing any sleep over that fact.

This story was produced by KHN, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

For Surprise Medical Bills, It’s the Beginning of the End

On Thursday, federal officials are expected to begin completing the particulars of how that legislative plan will translate to action, by publishing the first major regulation interpreting it. The law establishes a system for calculating a benchmark payment and a way for insurers and health providers to appeal to a neutral arbiter when they feel that amount is not appropriate.

The rule expected Thursday is not the last that will need to be published before the end of the year, but it will most likely settle several contentious issues.

Among the more important and contested provisions is a detailed definition of the “fair” price that arbiters should consider as a baseline for deciding how much the insurance plan typically owes the hospital or doctor. This will be a key figure because it will determine how much the patients owe — they are still responsible for paying the out-of-network doctor their normal co-payment or deductible amount — and what reimbursement the provider will net.

Other thorny issues being addressed in the Thursday rule include how providers must inform patients that they do not participate in their insurance network, along with the framework for a new federal complaint system. The notification rules in the law represent a new form of transparency — doctors and hospitals will need to warn patients if any of their care isn’t covered by insurance.

The complaint system will manage submissions from patients who believe their hospital or doctor is sending bills that are illegal under the new law. The law provides $500 million in funding for that new system, and gives the federal government authority to assess fines as high as $10,000 per billing violation.

Some consumer advocates worry that providers may continue billing patients in violation of the law without stringent enforcement, and will be on the lookout for rules that robustly enforce the new protections.

Subsequent rounds of regulation will provide more detail about how the arbitration process will work, and what factors the neutral arbiter can or can’t consider in deciding the right price for a medical service. Another rule is expected to deal specifically with air ambulances, which are regulated under the new law and tend to generate some of the most expensive surprise medical bills.

Sarah Kliff is an investigative reporter for The New York Times. Her reporting focuses on the American health care system and how it works for patients.

Margot Sanger-Katz is a domestic correspondent and writes about health care for The Upshot. She was previously a reporter at National Journal and The Concord Monitor and an editor at Legal Affairs and the Yale Alumni Magazine.