Comments on HHS Proposed Rule on Hospital Outpatient Prospective Payment System (OPPS)

Monday, September 30, 2019 - 12:30pm

September 27 , 2019

Submitted Electronically Via Federal Rulemaking Portal: www.regulations.gov

Centers for Medicare & Medicaid Services
Department of Health and Human Services
Attention: CMS -1717 -P
P.O. Box 8013
Baltimore, MD 21244 -1850

Re: Medicare Hospital Outpatient Prospective Payment System for CY 2020

To Whom It May Concern:

The U.S. Chamber of Commerce (the “Chamber”) submits these comments in response to the recently
published Proposed Rule (the “proposal”) regarding revisions to the Medicare hospital outpatient
prospective payment system (OPPS) and the Medicare ambulatory s urgical center payment system for
CY 2020. 1 Our comments focus on the proposal ’s provisions that would establish requirements for all
hospitals in the United States to publish hospital standard charges.

Pursuant to the Executive Order signed by the Pres ident on June 24 th to improve price and quality
transparency in American health care and to put Americans first, this proposal was published i n the
Federal Register on August 9, 201 9, by the Department of Hea lth and Human Service’s (“HHS ” or
“the Departm ent ”) Centers for Medicare and Medicaid Services (“CMS ”).2 This proposal would
require hospitals to post standard charge information in an effort to increase the availability of
meaningful price and quality informa tion for patients.

While the Chamber h as long supported transparency in cost and quality information to better inform
patients, the requirement that all hospitals post payer -specific negotiated rates for all items and
services provided by the hospital is tremendously problematic . Th e proposal will not only fail to
provide consumers with useful and meaningful information, it will lead to tremendous confusion as
consumers are blanketed with rates not reflective of their out -of-pocket exposure . Further, the proposal
will have significant econo mic and market ramifications , likely increas ing prices and lead ing to anti -
competitive behavior . Finally, we believe the Proposed Rule is unlawful in several respects . The
proposal : exceeds the authority and scope of CMS , exceeds statutory authority by interpreting standard
hospital charges in an excessively broad manner, and violates the Constitution’s Taking Clause and the
First Amendment . We urge CMS to postpo ne the effective da te of the Proposed Rule so legal
questions can be answered .
1 https://www.govinfo.gov/content/pkg/FR-2019 -08 -14/pdf/2019 -16041.pdf 2 https://www.whitehouse.gov/presidential-actions/executive -order -improving -price -quality -transparency -american -
healthcare -put -patients -first/

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LAUDABLE GOAL

The Chamber has long advocated for ensuring patients and employers have access to useful
information on the cost and quality of health care services . For over a de cade, we have trumpeted the
opportunities Health Savings Accounts and various value -based insurance design models create to
advance informed consumerism in health care . In a report issued in June of 2013, the Chamber
identified four specific principl es to improve our nation’s health care system: (1) achieving meaningful
transparency, (2) realizing greater value in health care, (3) supporting effective employer -sponsored
coverage and private insurance offerings , and (4) reforming Medicare and Medicaid to drive greater
value . We share these goals with the Administration . However, transparency and access to cost and
quality information is only as useful as the information being provided .

IMPROPER APPROACH

Our concern with the Proposed Rul e’s approach are three fold . We believe the payer -specific
negotiated rates are not going to be meaningful or help ful to consumers because the information this
rule proposes to provide will lead to greater consumer confusion . More meaningful and consumer -
specific private sector tools are already available for consumers and provide information pertinent to
consumers’ personal financial obligations. The Proposed Rule would only provide enormous amounts
of data the consumer will have to navigate, sum the amounts provided, and then calculate their cost
share obligations. This also assumes the consu mers will know which codes they need to look up .

Payer -specific Negotiated Rates Are Not Helpful to Consumers

Individual consumers are interested in their specific out -of-pocket expenses and exposure . In order for
an individual to accurately know what his or her out -of-pocket costs will be, it is necessary to also
know that individual ’s standing in terms of satisfying his/her deductible . Posting payer -specific
negotiated rates publicly will not inform consumers of their specific out -of-pocket costs and could
adv ersely impact competition in the market place .

• Consumers are not going to be paying these negotiated rates; the carrier will be . It is far more
useful and appropriate for a carrier to help a covered beneficiary assess out -of-pocket costs for
receiving a service from one provider versus another and be able to further quantify that cost
exposure given the specific beneficiary’s deductible standing than for a consumer to see the
various negotiated rates from carriers with whom they are not insured.

• In order for individuals to even find the correct payer -specific negotiated rate, they will have to
know what particular service will be performed and /or item provided , their specific product
type ou t of many, as well as know the corresponding code that reflects that service or item .
This is not information that consumers will have or know. For example, there are multiple
codes for a simple evaluation and management visit, also known as an office visit, which are
based on the amount of time the provider spends with the patient. For more adv anced care,
there is significant variability in care complexity, which also affects which codes are billed.

• The rates p ublicly posted will be incomplete and misleading given that many services may also
be provided by non -hospit al employed physicians . Information about the cost of services
administered by these providers is not covered by the proposal and means consumers would

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really only see part of the picture. In addition, many services may be able to be provided in a
physician’s office or ambu latory surgery center at a lower cost.

Consumer Confusion L ikely

Worse than being not helpful, this information is likely to confuse consumers and leave them
frustrated when the negotiated rate they identify before the treatment varies tremendously from that
paid by the insurer to the hospital afterwards.

• In looking at the negotiated rate for a particular service or item, consumers are likely to find
the amount listed doesn’t reflect the costs associated with their entire treatment . There will in
many cases be ancillary services provided as well and the consumer m ay (in error ) simply try
to ascertain the cost of the primary service .

• The consumer may also find their costs are higher than those associated with the payer -specific
negotiated rate due to comorbidities and complications.

• In addition, consumers need information about the quality of the services they will receive in
order to make informed care decisions.

Private Sector Solutions Better Drive Consumer Empowerment

There are already tools available to consumers to help them ascertain their out -of-pocket costs which
renders CMS ’s proposal unnecessary . In fact, i nsurance companies and third party administrators more
effectively prov ide individualized information about out -of-pocket costs . Here are a few examples of
tools many insurance providers offer:

• Insurer c ost tools provide real -time, personalized out -of-pocket estimates for the most common
medical, non -emergency, in -network health care services, including those offering the biggest
opportunity to save on health care expenses and are likely to cause members to comparis on
shop.

• Some insurers provide tools giving members an estimate of the average in -network versus out -
of-network cost of an episode of care, or overall average cost for certain diseases and
conditions, for approximately 200 types of office visits, diag nostic tests and vaccines, surgical
and scope procedures, dental services , and diseases and conditions

• Insurers offer beneficiaries the ability to review and compare cost ranges for medical
procedures among participating facilities: inpatient, outpatient , and other facilities (e.g., free -
standing radiology centers). Insurers regularly provide the following individualized
information: all costs from admission to discharge, facility -specific information — not regional
averages — for more than 30 common medical procedures (e.g., maternity care, MRIs, CT
scans, colonoscopies, and mammograms) . Displayed costs are broken down into managing
physician charges and ancillary charges, as well as cost ranges.

• Tools allow beneficiaries to calculat e personal financial responsibility by allowing members to
search the most common elective inpatient, outpatient, and imaging services by facility, as well
as the most common physician office visits . All costs are displayed at the episodic level (i.e.,

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all cost rendered for a normal, uncomplicated procedure), including everything from admission
through discharge. These costs are the insurer ’s contracted allowed amounts and are shown in a
narrow range from minimum, to likely, to maximum costs . The likely am ount is displayed as
equaling the employer share (if the member is part of a self -insured plan) and the out -of-pocket
amount . This “out -of-pocket amount ” is further broken out by co -pay, coinsurance, and so
forth, and each line item has context to educate the member on what these amounts mean and
how each amount is calculated . Members are also presented with alternative treatment options
depending on the procedure of interest and the available options.

• Other tool s provide consumers with a view of how tr eatment costs differ from doctor to doctor,
in addition to delivering personalized cost estimates for various treatment options . This tool
serves as a n online resource that supports the evaluation of specific care, quality, and cost
estimates for provider s and facilities . The data support more reliable cost and quality
information for a specific service provided by a specific doctor or hospital — the level of detail
most consumers are looking for . Empowering consumers with this information allows them to
be more confident about the quality of their care, as well as be in control of the economics
surrounding it.

Many providers also prepare individualized information on cost and provide good faith estimates to
patients ahead of time which are far more accurate and helpful as consumers assess their financial
exposure and obligation . There are a myriad of example s o f pro vider efforts on this front. For
example:

• Patients are often able to discuss cost estimates directly with their provider, speak with
providers telephonically, or utilize web portals established at a growing number of hospitals. In
these interactions, provider representatives are ab le to ask probing questions in order to best
narrow dow n the likely services and reimbursement based on that individual ’s specific pl an
and benefits . In addition, this method of providing support for patients allows for education to
occur, dialogues around a patient’s ability to pay, alternatives available for payment, discussion
around other likely bills the patient will receive, and more.

• Hospitals and health systems help patients obtain answers to these questions by working with
insurers . Specifically, once a provider has identifi ed the patient’s need for a specific diagnostic
service or care protocol, hospital financial counselors help patients work with their insurer to
establish what the patient’s cost -sharing obligation may be. Financial counselors may need to
repeat this proce ss multiple times, as the course of care may change for any number of reasons.
This is largely a hands -on process today with hospital staff connecting with insurers via their
websites and call centers to obtain patient -specific information. Many hospitals and health
plans, however, are working on ways to leverage web -based technology to streamline these
processes for patients.

• For the 10 percent of the population that is uninsured, availability of standard pricing
information can be helpful and is already available consistent with federal law. Providers can
and do respond to inquiries from uninsured individuals with information on their standard
charges. Many of these patients are of limited means and also will not pay the standard charge,
as hospitals and health systems provide billions of dollars of charity care each year. Part of the

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discussion between providers and uninsured patients on price estimates includes information
on any financial assistance policies the hospital may offer.

As with requirements to post charges, a requirement to post payer -specific negotiated rates would be
confusing to patients and inferior to developments already occurring within the provider industry.

Unintended Economic and Market Consequences

Posting publicly the negotiated rates between hospitals and competing insurers will lead to anti -
competitive behavior and ultimately increas e premiums .

• The Federal Trade Commission and the Organization for Economic Cooperation and
Development have produc ed analyses of comparable proposals indicating CMS’ Proposed
Rule is likely to result in higher prices to consumers. [1] Higher -priced hospitals could use the
competitively sensitive rate information to increase rates to the highest price the market wi ll
bear, while lower -priced providers could use the competitively sensitive rate information to
raise rates even more quickly to the prices charged by the higher -priced providers. This could
result in market chaos a nd harm competition .

• The overall cost and details of the negotiated rates with providers is confidential and
proprietary and constitutes confidential trade secrets . Any required public disclosure of
proprietary pricing between payers and providers would be contrary to lo ng -established
prohibitions on the forced disclosure of trade secrets . The effect would be a significant
disincentive for health plans to compete in the formation and structure of their networks.

LEGAL CONCERNS

In addition to the policy and operational concerns, the proposal should be withdrawn because it suffers
from significant legal flaws.

The Proposal Exceeds CMS’s Authority Because “Standard Hospital Charges” Cannot Include “Payer -
Specific Negotiated Rates”

The proposal must be withdrawn because it exceeds CMS ’s authority under the Public Health Services
Act . CMS has no authority to require hospitals to publish confidential payer -specific negotiated rates,
as proposed . Section 2718(e) of the Public Health Services Act , on which the proposal reli es for
authority, requires hospitals to publish an annual list of their “standard charges for items and services
provided … ” But the proposal is not focused on standard charges at all . Instead, it would require
hospitals to publish their privately negotiated non -standard charges, which the agency now proposes to
[1] Letter from Marina Lao, Deborah Feinstein, & Francine Lafontaine, Federal Trade Commission, to Joe Hoppe &
Melissa Hortman, Minnesota House of Representatives 7 (June 29, 2015), available at
https://www.ftc.gov/system/files/documents/advocacy_documents/ftc-staff -comment -regarding -amendments -minnesota -
government -data -practices -act -regarding -health -care/150702minnhealthcare.pdf and “There have been instances where
government mandated increases in price transparency seemed to have produced higher rather than lower p rices, probably
because they facilitated anti -competitive co -ordination among sellers.” Organisation for Economic Co -operation and
Development [OECD], Price Transparency, at 9, OECD Doc. DAFFE/CLP (2001)22 (Sep. 11, 2001) . See U.S. examples
id. at 32 -33.

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call “standard ” in order to shoe -horn them into the statute’s objectives . Indeed, t he proposal now uses
the phrase “payer -specific” to describe the covered charges, which is a far cry from “standard.”

The words of a statute generally must be given their ordinary meaning and an a gency cannot assume
ambiguity for the convenience of giving itself autho rity to achieve a policy goal . See Gross v. FBL
Financial Svc. Inc. , 557 U.S. 167 (2009) ( “Statutory construction must begin with the language
employed by Congress and the assumption that the ordinary meaning of that language accurately
expresses the legi slative purpose. ”); Chevron U.S.A. v. Nat. Res. Def. Council, 467 U.S. 837, 843 n. 9
(1984) (courts must exhaust all traditional tools of construction before concluding statute ambiguous) .
Here, by referencing “standard charges, ” Congress clearly referred to what hospitals “regularly ”
charge for items and services . See https://www.merriam-webster.com/dictionary/standard . By their
nature, privately negotiated rates applicable only to the parties who negotiated them are not
“standard; ” they are “payer -specific ,” or even peculiar . Had Congress wante d CMS to require
publication of all rates, or even the specific additional rates identified in the proposal, it would have
said so . Instead , Congress very specifically required disclosure of “standard charges ” and nothing
more. 3 The proposal ’s attempt to define standard charges to include non -standard charges ( i.e. ,
confidential payer -specific negotiated rates) grossly exceeds the language of the statute . The proposal
must be revised to stay within the bounds of CMS ’ authority .

Beyond the improper extension of the term “standard” to include “payer -specific ,” the proposal further
improperly extends the meaning of the word “hospit al” standard charges to include “negotiated ” rates .
Negotiated amounts are not solely in the purview or control of a hospital . These amounts are the result
of bilateral negotiations between two parties – an insurer and a hospital . Therefore , extending the term
“hospital” standard rates to amounts that are instead “negotiated” exceeds the statute’s authority .

Third, the Proposed Rule improperly extends the term “charges” to include “rates.” There has been
long -standing differentiation between “charges ” – which a hospital sets for the services and items it
provides to those not covered by a participating insurer and “rates ,” which are the allowed amounts
resulting from a bilateral negotiation and contractual agreement.

Prop osal Contravenes Constitutional Protections of the Takings Clause and the First Amendment

The proposal’s definition of “standard charges ” and attendant disclosure requirements raise s
significant Constitutional concerns , which must be avoided for the rule to sustain scrutiny . Requiring a
party to publish confidential information it carefully guards as a trade secret without just compensation
contravenes the Taking Clause of the Constitution. See Ruckelshaus v. Monsanto , 467 U.S. 986
(1984) . Hospitals a nd insurance carriers treat their negotiated rates and payments as trade secrets,
often contractually binding each other to prevent disclosure . Congress would not have authorized such
a clear taking of those trade secrets without grappling with the costs to hospitals and insurers of
releasing their closely guarded commercial information or the mechanism for compensating them .

In addition, the proposal threatens core First Amendment principles . The government may not compel
commercial speech , like requiring disclosure of private rates, without first establishing that compelling
the speech directly advances the government’s purported goal . See Nat'l Ass'n of Manufacturers v.
3 Even if “standard charges” could be given another meaning because of some contextual or other aspect of the statute, the
proposal fails to provide sufficient details on what aspects of the statute create ambiguity, let alone sufficient ambiguity to
make “standard charges” mean non -standard charges .

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S.E.C. , 800 F.3d 518, 527 (D.C. Cir. 2015) . And the government may not rest on “speculation or
conjecture” to establish that fact . Id. Although the proposal references some experience at the state
level with rate disclosure, it fails to provide or rely on a sufficient study of the imp act of broad
disclos ure of the private information addressed here to demonstrate any final rule would advance the
government’s purported goal . It thus violates hospitals’ and insurers’ First Amendment rights to be
free from most compelled speech.

In short, the proposal suffers from significant legal flaws , which must be corrected before any final
rule could be finalized.

REGULATORY PROCESS OBLIGATIONS INSUFFICIENTLY SATISFIED

The Chamber is dismayed that the Department chose to truncate the appropriate 60 day comment
period prescribed by the Paperwork Reduction Act a nd believes the e conomic a nalysis provided is not
suf ficiently supported or acc urate .

Improp erly Abbre viated C omment Period

As HHS notes on p. 39610 – “Under the Paperwork Reduction Act of 1995, we are required to provide
a 60 -day notice in the Federal Register and solicit public comment before a collection of information
requirement is sub mitted to the Office of Management and Budget for review and approval,” and the
Department then lists the four issues for which the P aperwork R eduction Act (“PRA ”) requires that
comment be solicited . The Department further states that “In this proposed rule we are soliciting
public comment on each of these issues…” However, h ere the Department issued the notice for public
comment on this Proposed R ule on August 9, 2019 with a comment due date of September 27, 2019, a
period of 49 days, far less than the 60 day comme nt period required by the PRA .

The Department’s decision to issue this Proposed Rule with comment period shorter than 60 days
truncates the public’s comment rights under the P RA . The prospective public ation in the Federal
Register of a “60 day PRA information collection burden comment notice” after a final rule is decided,
would reduce the PRA requirements to a pro forma exercise without real effect . The critical decisions
will have already been made in the final rule, and nothing the public could offer then would be capable
to altering the pre -ordained course determining the information collection burden . Consistency with
both the spirit and letter of the PRA , the law requires that the Department provide the mandated 60 day
comment period at this proposed rule stage, allowing the public the opportunity through timely and
well -considered comments to influence the actual decisions that will be made to affect the information
collection burden.

The information collection control number 0938 -1109, currently effective until March 31, 2019,
covers only the Hospital OQR Program’s current information collection burden established by
currently effective rules . The proposed changes, regardless of whether they increas e or decrease the
estimated burden will invalidate the previously approved information collection when a final rule is
published that revises any of the relevant current requirements . At that point, unless a new information
collection burden has been appr oved, no information requirement will be valid. It is therefore
necessary that the public comment period requirements of the PRA be respected and implemented
fully in advance in order to ensure no lapse in the statutorily required authorization .

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Flaw ed Cost Analysis

The Depar tment asserts that the hourly wage of a Medical Records and Health Information Technician
(updated to $18.29 per hour) is the appropriate measure of the labor cost of compliance with the
Hospital OQR Program . However, the information collection requirement does not appear to be
suppo rted by any reasonable assessment of the responsibilities and knowledge required for the task .
The accuracy and completeness of the information submitted under the Hospital OQR program have
serious financial implications for both hospitals and patients. W e do not believe that it is reasonable
for the Department to assume that such responsibility would be left to be performed by a worker at this
rate of pay . Review and supervision by executive, administrative, and professional ly t rained financial
and legal staff whose rates of p ay are five to ten time higher is essential to avoid liability for errors and
omissions . The Department’s under -estimation of the hourly compliance labor costs permeates every
element of the information burden cost estimate . The Department should not be granted information
collection clearance based on this flawed cost estimate.

The Department also asserts a compliance burden of 1 hour per hospital for each of a lawyer and a
general operations manager to review the rule prior to implementation . No e mpirical or rational basis
for this time estimate is provided. Hospitals are large, complex institutions, and it seems unreasonab le
to assu me that such a brief period of time by only two individuals would be sufficient to preform
diligent review of such a complex regulation on behalf of such an institution . We urge the Department
to conduct surveys or listening sessions with experi enced hospital administrators and legal counsels to
find reasonable ranges of time burden calculation assumptions.

CONCLUSION

The Chamber commends CMS ’ efforts to improve transparency and provide additional information to
consumers on cost and quality . However, we have a multitude of concerns with the Proposed Rule ’s
approach . Mandating payer -specific negotiated rates be posted by hospitals will not help provide
meaningful or useful information to consumers . Instead, it will lead to significant confusion and
operational complexity which is unnecessary given the tremendous private sector transparency tools
consumers already use and enjoy . Beyond these policy points, the Chamber has strong economic and
legal concerns as well . We urge CMS to p ost pone the Proposed Rule ’s effective date until the myriad
of legal questions can be fully addressed . CMS should also consider alternative approaches such as the
development by Federal health care programs of real -time benefit tools similar to those that will be
utilized in the Medicare Part D program beginning in 2021 . We remain committed to the employer -
sponsored system and appreciate the D epartment ’s consideration of the effects that various
implementation choices have on businesses .

Sincerely,

Katie Mahoney
Vice President , Health Polic y
U.S. Chamber of Commerce