May 13 - 17, 2013
The BreakPoint: Obama Administration Reveals Hospital Health Care Costs, Leaves Questions Unanswered
Responding to a recent spike in questions about hospital charges, the Center for Medicare and Medicaid Services ("CMS") released data on Wednesday, May 8, 2013, that show 2011 rates and prices for 100 of the most common procedures from 3,300 hospitals in the United States. This is the first time these data have been made public and it is notable for the wide discrepancy in what hospitals charge for the same procedure, even within the same geographic region. One hospital in the DC region, for example, charged $69,000 for a lower joint replacement, while another hospital only five miles away charged just under $30,000 for the same procedure. In New Jersey, a hospital in Rahway charged $101,945 to implant a pacemaker, while a nearby hospital in Livingston charged on average $70,712.
But what do these charges represent? For many consumers, the answer to what these charges represent is not helpful. The CMS website says that the Total Payment Amount includes the MS-DRG amount, bill total per diem, beneficiary primary payer claim payment amount, beneficiary Part A coinsurance amount, beneficiary deductible amount, beneficiary blood deducible amount and DRG outlier amount. In fact, the official press release stated that HHS is providing funding to data centers to make the data useful to consumers.
CMS published these data after Steven Brill's infamous piece in TIME magazine titled "The Bitter Pill: Why Medical Bills are Killing Us." In his lengthy article, Brill honed in on the lack of transparency around the hospital "chargemaster" lists – the price list set by hospitals. These lists are the beginning point for negotiations with private insurers who receive deep discounts off of the full charges, but the full charge is often the only price offered to uninsured patients. The Medicare Program pays according to a standardized formula that does not consider the chargemaster list prices, but HHS Secretary Kathleen Sebelius stated that the data is important for uninsured patients who are responsible for their own medical bills. Brill released a response last Thursday to the CMS disclosure, stating that the transparency needs to be taken further by requiring reports on what insurance companies pay hospitals, testing clinics, and other providers.
By shining a bright spotlight on these lists and allowing consumers to be able to comparison shop for elective procedures that are not covered by insurance plans, the release of these data mark the beginning of a serious discussion about the fair market value for hospital services. This is timely, given the demonstration projects on bundling payments for episodes of care – which often requires an assessment of the average amount it costs a hospital to care for a patient presenting with a particular condition. But another key component to comparing the value of health care services from one hospital to another is the outcome of the patient: did the hospital stay improve the patient's health? In other words, if prices are not tied to quality assessments – and the quality of care delivered is often very difficult to measure – then the prices only provide a small piece of the information consumers need. The publication of pricing data alone may begin a lively discussion – but it is only the beginning.
Breaking News Events in Health Policy This Week
General ACA Implementation:
• Speaker John Boehner and Minority Leader Mitch McConnell formally refuse to recommend appointments to the ACA's IPAB.
• House Republicans schedule the first full ACA repeal vote of 2013, giving freshman GOP members the opportunity to vote on record.
• Retailers, restaurants, and other businesses write to Congress pushing for the repeal of the ACA's auto-enrollment provision for employers with 200 or more full-time employees.
• Small businesses worry the ACA's new fee on health insurance providers will cause higher premiums.
• HHS Secretary Kathleen Sebelius turns to health industry executives, community organizers, and church groups for funding to help support ACA outreach and enrollment efforts.
• Enroll America gears up for a major ACA outreach campaign over the next few months.
• Obama administration announces that community health centers will receive $150 million to help uninsured Americans sign up for health coverage under the ACA.
• President Obama holds a Mother's Day press conference to promote the ACA's benefits for women.
Centers for Medicare and Medicaid (CMS):
• CMS issues a proposed rule on the ACA's reductions to DSH payments.
• Senator Tom Harkin (D-IA) releases his hold on Marilyn Tavenner's nomination for CMS Administrator.
• The Senate agrees to move ahead with a confirmation vote for CMS Acting Administrator Marilyn Tavenner.
• CMS rejects the federal waiver request to extend the Insure Oklahoma program.
• Senators Baucus and Hatch write a bipartisan letter calling for health care stakeholders to submit ideas for reforming Medicare's physician payment system.
• Following up, the Senate Finance Committee has scheduled a hearing this week to explore repealing and replacing the Sustainable Growth Rate (SGR).
• The Commonwealth Fund proposes combining Medicare Parts A, B, and D into one single deductible to save $180 billion over 10 years.
• Businesses and hospitals are finally getting into the nitty-gritty of the health reform debate on hospital readmissions.
Health Care Spending Growth:
• New Health Affairs study suggests that 55% of the recent health care spending growth slowdown cannot be explained by the recession.
• The potential long-lasting effects of the decline in health care spending growth saw tremendous press coverage last week, including the New York Times, Politico, NPR, and the Wall Street Journal.
• Republicans on the House Energy and Commerce Committee issue a report predicting dramatic insurance premium increases in 2014. The report does not take into account the premium subsidies the ACA will provide for those earning less than 400% of the federal poverty level.
eHealth Teleconference on ObamaCare
Tuesday, May 14, 1:00 PM
Dial-in number: 1-800-351-4892; Passcode: 27080
2013 Health Care Symposium and Fair: How Much Health Care Can We "Afford"?
Wednesday, May 15, 8:30 AM
555 New Jersey Ave. NW, Washington, DC
eHealth Initiative Teleconference- "A Community HIE: Optimizing Patient Care in a Secure Care in a Secure Environment"
Wednesday, May 15, 3:00 PM - 4:30 PM
GBC Health Conference on Business and Global Health
Wednesday, May 15 – Friday, May 17
45 East 45th Street, New York, New York 10017
HHS Webinar: Patient Protections, Consumer Assistance, and the ACA
Thursday, May 16, 10:00 AM
Senate Committee on Finance
"Advancing Reform: Medicare Physicians Payments"
Tuesday, May 14, 10:00 AM 215 Dirksen Senate Office Building
Senate Committee on Health, Education, Labor, and Pensions
"The ADA and Entertainment Technologies: Improving Accessibility from the Movie Screen to Your Mobile Device"
Tuesday, May 14, 2:30 PM
430 Dirksen Senate Office Building
Senate Committee on Veterans' Affairs
"Pending Benefits Legislation"
Wednesday, May 15, 10:00 AM
Russell Senate Office Building, SR-418
Senate Committee on Appropriations
Departments of Labor, Health and Human Services, and Education, and Related Agencies
Fiscal Year 2014 Budget Request for the National Institutes of Health
Wednesday, May 15, 2:30 PM, SD-138
House Committee on Rules
"To Repeal the Patient Protection and Affordable Care Act and Health Care-Related Provisions in the Health Care and Education Reconciliation Act of 2010"
Wednesday, May 15, 1:00 PM
Capitol Building, H-313
House Energy and Commerce Committee
"Fraud on the Elderly: A Growing Concern for a Growing Population"
Thursday, May 16, 9:45 AM