Legislative Update: Masks and Price Transparency Occupy Washington

New CDC mask guidance, plus release of the CMS OPPS proposed rule highlight week in the nation’s capital.

The Centers for Disease Control and Prevention (CDC) is under pressure to revise its guidance and recommend that vaccinated people go back to wearing masks in public. As you may remember, in May, the CDC changed its guidance to say that only non-vaccinated individuals needed to wear masks and maintain social distance. However, deaths due to COVID have increased nearly 50 percent over the past week, to an average of nearly 250 a day.

In the face of rising COVID cases, Los Angeles has brought back its mask mandate for both vaccinated and unvaccinated individuals; this morning, St. Louis did the same.

This past weekend, Dr. Anthony Fauci said that the federal government is considering a change in the recommendations, but for now, the CDC says it is staying with its current guidance that vaccinated people need not wear masks. The CDC has emphasized that local government can and should make different decisions, based on their own numbers.

In related news, this week the American Hospital Association (AHA) began encouraging hospitals to require their employees to get vaccinated. The New York Times has reported that a quarter of all hospital employees remain unvaccinated.

Finally, the Centers for Medicare & Medicaid Services (CMS) released its 2022 Outpatient Prospective Payment System (OPPS) proposed rule last week. In it, the administration suggested upping the penalty against hospitals that don’t comply with the transparency rule that has been in effect since January of this year. The rule requires hospitals to upload spreadsheets that list negotiated rates with each of its payors, and it’s those spreadsheets – or machine-readable files – that hospitals are dragging their feet on.

According to one recent report, less than 6 percent of hospitals are in compliance with the requirements, and many hospitals indicated that they were choosing to pay the $300-per-day penalty instead of complying. The OPPS rule released last week proposed upping that to $5,500 a day for hospitals with more than 30 beds. That would mean a $2 million fine for a hospital that remained out of compliance for a year.

The transparency rules come from a single sentence in former President Obama’s Patient Protection and Affordable Care Act, from which the Trump Administration created multiple requirements for both hospitals and insurers. Those requirements survived court challenges and heavy lobbying by industry opponents, and now the Biden Administration has signaled that it too is serious about enforcing them.

An aside here: in this day and age, can you imagine any policy initiative in any industry that is not only agreed upon, but also championed through three radically different presidential administrations?

So why are both sides of the aisle eager for these requirements, while providers and payers are pushing back on them?

There’s a lot at stake: making healthcare pricing transparent, public, and free will have a tremendous impact on provider-payer contract negotiations, hospital pricing, and payor reimbursement. New companies have already popped up that are gathering this data, then analyzing and monetizing it. As we’ve seen, the press is already picking up on some of the more irrational and egregious pricing that has been made public, and we’ll see even more of this as more of the information is published.

In short, transparency requirements are here to stay, they are going to impact the way hospitals and insurers do business, and they’ll be a part of the national conversation on healthcare for many years to come.

Programming Note: Listen to Matthew Albright’s legislative update, sponsored by Zelis, Mondays on Monitor Mondays, 10 Eastern.