CMS OPPS Proposed Rule

Meet the Speakers

Kevin Chmura

Chief Executive Officer

Panacea Healthcare Solutions

Govi Goyal President, Financial Services

Panacea Healthcare Solutions

Henry Gutierrez SVP, Financial Consulting Services

Panacea Healthcare Solutions

Did you participate in the CMS webinar held on July 26th or read the price transparency section of CMS OPPS proposed rule?

a. Yes, attended the webinar and read the proposed rule

b. Only attended the webinar

c. Only read the proposed rule

d. Neither, that's why I'm here!

CMS Price Transparency

Standard Charges

Public AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Final rule.

SUMMARY: This final rule establishes requirements for hospitals operating in the United States to establish, update, and make public a list of their standard charges for the items and services that they provide. These actions are necessary to promote price transparency in health care and public access to hospital standard charges.

By disclosing hospital standard charges, we believe the public (including patients, employers, clinicians, and other third parties) will have the information necessary to make more informed decisions about their care. We believe the impact of these final policies will help to increase market competition, and ultimately drive down the cost of health care services, making them more affordable for all patients.

DATES: This final rule is effective on January 1, 2021.

Key Dates

Jan 1st, 2022

Increase in Civil Monetary Penalties

Nov 14th, 2022

Standard Voluntary Data Format for Machine-Readable Files

Sep 11th, 2023

End of CMS Comment Period

Mar 1st, 2024

End of Grace Period for MRF Changes*

Jan 1st, 2021

CMS Price

Transparency

July 1st, 2022

Transparency in Coverage (TiC) rule

July 13th, 2023

Release of OPPS

Proposed Rule

Jan 1st, 2024

Effective Date for Certain Requirements

*Certain proposed changes related to price transparency are effective on January 1st, 2024, without a grace period.

Recent Communication from CMS about Enforcement

In a recent article on hospital price transparency published in Health Affairs, CMS officials

Meena Seshamani, MD, PHD, and Douglas Jacobs, MD, noted that the agency is exploring how to streamline price transparency enforcement efforts, including expediting the timeframes by which it requires hospitals to come into full compliance upon submitting a corrective action plan. The authors also said that CMS plans to take aggressive additional steps to identify and prioritize action against hospitals that have failed entirely to post files.

Source: Seshamani, M., and Jacobs, D., “Hospital price transparency: Progress and commitment to achieving its potential,” Health Affairs, Feb. 14, 2023.

What is CMS’ process for enforcing the HPT rules?

 The enforcement process occurs in a phased manner and typically involves a comprehensive compliance review in response to CMS audit or a complaint received through the Hospital Price Transparency website.

 If CMS concludes a hospital is noncompliant with one or more of the requirements, CMS may take any of the following actions:

• Provide a written warning notice to the hospital of the specific violation(s). This step may be skipped if there is no evidence of efforts to comply

• Request a Corrective Action Plan (CAP) if noncompliance constitutes a material violation of one or more requirements. Under a current bill, hospitals would be given 45 days to submit a plan and 90 days in total to achieve full compliance

• Impose a Civil Monetary Penalty

• A public list of non-compliant hospitals that are assessed a CMP will be located on the CMS Price Transparency website: https://www.cms.gov/hospital-price-transparency. (Public Shaming)

Shorter Window to Comply

Civil Monetary Penalties

Dramatic Increase in Penalties Due to Non-Compliance

Hospitals equal to or less than 30 beds

Hospitals between 31 and 550 beds

Hospitals with more than 550 beds

Common Errors on the Machine-Readable File

Showing only “%” versus “$”

• CMS advises hospitals to calculate the dollar value for ‘percent of charge payers’ at CDM and NDC level

Missing Line Items

• Hospitals must include all items and services with a standard charge, including items with zero volume, drugs at the NDC level, etc.

Not Easily Accessible

• Machine-Readable Files should be accessible to consumers, digitally searchable and displayed prominently without barriers.

Wrong Naming Convention

• CMS requires a specific naming convention and file format (<ein>_<hospitalname>_standardcharges.[json|xml|csv]).

Missing Updated Date

• Hospitals must indicate the date that the MRF was most recently updated in the file itself or associated with the file.

Rates Only at the Plan Level

• Payer-specific negotiated rates should be at the payer and plan code level and should not be averages or ranges.

Common Errors – Using Claims and Payments Data Instead of Payer Contracts

“Static” MRF Elements

“New” MRF Data Elements

“New” MRF Data Elements cont.

Allowable File Formats

* Consumer Friendly Expected Allowed Amount has not yet been added to the data dictionary.

JSON Schema CSV “Wide” Format

CSV “Tall” Format

Additional Data Element: Contracting Method

Definition:

The type of contract arrangement used to establish the payer-specific negotiated charge.

Naming Convention:

standard_charge | contracting_method (Tall Format)

standard_charge | [ payer_name] | [plan_name] | contracting_method (Wide Format)

Valid Values:

Case Rate, Fee Schedule, Percent of Total Billed Charges, Per Diem, Capitation, Other

CSV Instructions: Select the value that most closely represents the contracting method for the payer-specific negotiated charge associated with the item or service. If the contracting method isn’t represented in the definitions, select ‘Other’ and enter a detailed explanation of the contracting arrangement in the ‘Additional Generic Notes’ for the CSV Tall sample format or the ‘Additional Payer-Specific Notes’ for the CSV Wide sample format.

Adding in the Contracting Method – Examples

Good Examples – Based on the CSV “Tall” Format

Confidence Levels Based on Frequency of Contracting Method

*Analysis performed by Panacea in 2023 is based on 175 hospitals across the nation encompassing over 1,500 managed care contracts.

Opportunity to Comment to CMS – Align with TiC?

Negotiated Arrangement

The negotiated rate, reflected as a dollar amount, for each covered item / service that the plan has contractually agreed to pay an in-network provider

Negotiated Type

The negotiated percentage value for a covered item or service from a particular innetwork provider for a ‘percentage of billed charges’ arrangement.

The rate for a covered item that determines a participant’s costsharing liability for the item / service, when that rate is different from the negotiated rate or derived amount.

The per diem daily rate, reflected as a dollar amount, for each covered item / service that the plan has contractually agreed to pay an in-network provider

The price that a plan or issuer assigns to an item or service for the purpose of internal accounting, reconciliation with providers or submitting data in accordance with the requirements of 45 CFR 153.710(c)

Additional Data Element: Consumer Friendly Expected Allowed Amount

Definition:

The average dollar amount a hospital expects to be paid by the payer and required in situations where the payer-specific negotiated charge cannot be expressed as a dollar figure or payment varies from patient to patient.

Naming Convention:

Expected Allowed Amount

Valid Values:

TBD - CMS will provide technical instructions for hospitals to display standard charges expressed in dollars, percentages, and algorithms in order to ensure consistency and machine-readability.

CSV Instructions:

TBD - Currently Proposed only and not included within data dictionary. Requires the combination of claims and payment contracts.

Consumer Friendly Expected Allowed Amount – Examples

 Further clarification will be required from CMS to determine if the contracted % should be displayed within the “Payer Specific Negotiated Charge: Percent” data element

 Additionally, clarification necessary on the requirement to display the Standard_Gross Charge (i.e., average charge) for Payers and Products using a % of Total Billed Charges Contract Method

 Confirmation that claims data should only be used for situations where the payer-specific negotiated charge cannot be expressed as an exact dollar figure. Source of all other Payer Specific Negotiated Charges should come from 3rd party payer contracts or fee schedules.

Additional Data Elements: Payer Name + Plan Name

Definition:

The name of the third-party payer that is, by statute, contract, or agreement, legally responsible for payment of a claim for a healthcare item or service and that payer’s specific plan associated with the standard charge.

Naming Convention:

Payer_Name

Plan_Name

Example

Values:

Cigna, Aetna, Humana, etc. (payer name)

PPO, HMO, All Managed Care Plans, etc. (plan name)

CSV Instructions:

Only applies to the CSV “Tall” sample format and JSON schema. We recommend that hospitals use the full name of the payer organization, absent any abbreviations. (On the CSV “Wide” sample format the payer and plan name is combined with other data elements such as Contracting Method)

Why it Matters – Meaningless Variation Between Plan Types

*2023 comparative rates study by Panacea using cleansed hospital machine-readable files from over 15 hospitals in Texas and over 500 hospitals across the nation.

Additional Data Element: Drug Unit and Type of Measurement

Definition:

The unit value that corresponds to the established standard charge for drugs.

The measurement type that corresponds to the established standard charge for drugs.

Naming

Convention:

drug_unit_of_measurement

drug_type_of_measurement

Valid Values:

Positive Numbers (unit type)

GR – Gram, ME- Milligram, ML – Milliliter, and UN – Unit (measurement type)

CSV Instructions: Enter the unit value, or amount, of the drug for that particular standard charge. If the description is “aspirin 81mg chewable tablet – each” then the drug unit value is “1” and the type of measurement is “UN” since the standard charge is established per tablet.

Why Do We Need Additional Fields for Pharmacy?

Why is it Important to Show the Type + Unit of Measurement?

Why is it Important to Show the NDC?

Extracting Data from Drug File and Transform into MRF

HCPCS code J9015 Injection, aldesleukin, per single use vial

HCPCS code J2765 Injection, metoclopramide hcl, up to 10 mg

CMS HPT CSV Sample Format (Wide)

Do you feel that you will be ready by March 1st, 2024, to implement all the required changes?

Polling

Question 2

a. Yes, we implemented to the voluntary data format released last November, including Contract Method, and are preparing for the other updates

b. Possibly, we have made some updates to align with the new formats and continue to do research

c. No, we have not yet implemented any of the proposed changes yet and may need assistance

Which of the below additional data elements do you feel will be the greatest challenge?

Polling

Question

a. Contracting Method

b. Consumer Friendly Expected Allowed Amount

3

c. Pharmacy (type and unit of measurement)

d. Payer and Plan Name

e. Payer Specific Negotiated Charge: Percent

Other Proposed Changes to MRF

Proposal to Improve the Accessibility of Hospital MRFs

• Hospitals must include a .txt file in the root folder with direct link to their MRF on their public website

• The .txt file must include a standardized set of fields such as;

• the hospital location name that corresponds to the MRF

• the source page URL that hosts the MRF

• a direct link to the MRF (the MRF URL)

• hospital point of contact information

• Hospitals must include a link in the footer of their website (i.e., homepage) that links to their HPT page

• The link should be labeled "hospital price transparency" and links directly to the webpage that hosts the link to the MRF

Other Proposed Changes to MRF

Proposal to Improve and

Enhance Enforcement

• Requires an authorized hospital official to submit to CMS a certification to the accuracy and completeness of the standard charges' information posted in the MRF at any stage of the monitoring, assessment, or compliance phase.

• Hospitals must acknowledge receipt of warning letter notices (instructions within the letter)

• CMS may request payer contract information from hospital to assess compliance

• CMS may publicize on its website, info related to CMS assessment of hospital compliance, any actions taken against hospital, status and outcome of those actions.

Proposal to Specify Formatting Requirements for MRF Information

• Hospitals must conform to the CMS template layout, data specifications, and data dictionary to be compliant with 42 CFR 180.50(c) and avoid risk to compliance action.

• Technical guidance to encode standard charge information is made available thru a data dictionary and within CMS template

Other Proposed Changes to MRF

Proposal to Affirm Accuracy and Completeness of MRF

• Requires each hospital affirm directly in its MRF (using a CMS template) that it has included all applicable standard charge information in its MRF as of the date in the MRF.

• Each hospital would be required to add a statement affirming that, to the best of its knowledge and belief;

• the hospital has included all applicable standard charge information in its MRF, in accordance with the requirements of §180.50, and that the information displayed is true, accurate, and complete as of the date indicated in the file.

• Example: if a hospital does not have a cash discount price it needs to "affirm" that directly in the MRF so there is no question about whether that hospital is compliant. Do not insert “N/A” as a value.

Additional Tips

 If using CSV format, any values that include commas should be enclosed in quotation marks. (ex., “OR Level 5, First 15 Min”)

 Do not insert “N/A” if you do not have applicable data. This is a retraction from CMS original guidance back from 2021.

 Percents should be displayed as a whole number (e.g., 50% should be displayed as 50)

 Keep in mind some proposed requirements do not have a 60-day grace period (e.g., affirmation)

 Hospitals must encode standard charge information that corresponds to each data element

Panacea’s Compliance Status w/ Proposed MRF Requirements

Tools and Resources

 The proposed rule can be found on the CY2024 OPPS/ASC Proposed Rule Federal Register Page

• https://www.federalregister.gov/public-inspection/2023-14768/medicare-program-hospitaloutpatient-prospective-payment-and-ambulatory-surgical- center-payment

 Voluntary sample formats, FAQs, etc. can be found on the CMS HPT Resources Page

• https://www.cms.gov/hospital-price-transparency/resources

 CMS Validator Tool to Confirm MRF Alignment with CMS Voluntary Sample Format

• https://cmsgov.github.io/hpt-validator-tool/

 Comment Period is Open Until September 11th, 2023

• https://www.regulations.gov (follow the “submit a comment” instructions)

Have you leveraged the publicly negotiated rate data in contract negotiations?

Polling

a. Yes, we have had some success in using the machine-readable files and plan on using comparative analysis for negotiations

b. Not yet, need support in acquiring, aggregating, and / or cleansing the data

c. No, still not confident about the reliability and / or accuracy of the data

Hospital Analysis – Meaningful Variation in Negotiated Rates Within Same PPO Product Type

*Comparative rates study performed by Panacea in 2023 using available and cleansed hospital machine-readable files from 7 hospitals in similar size and geography and within PPO based products.

Payer Analysis

Target Hospital: ABC Medical Center

Patient Class: Outpatient (SDS, POP, etc.)

Payers: Big 5, excl. Managed Medicare / Medicaid

Plan Type: PPO only

Outlier Logic Included: Yes

Confidence Level for Rate Methodology:

Primary

Secondary

Tertiary Peer Group

(w/ Primary Confidence Level)

*Negotiated Rate Position is based on a weighted average. 0% is the average.

**Peer Group Rank is based on Negotiated Rates and not Gross Charges (i.e., price)

1. Peer Hospital A

2. Peer Hospital B

3. Peer Hospital C

4. Peer Hospital D

5. Peer Hospital E

Service Line Analysis: Raise Prices or Negotiate Better Rates?