AHA urges CMS to consider legality of OPPS price transparency, clinic payment proposals

Wednesday, October 2, 2019

CMS’ proposal in the 2020 OPPS proposed rule mandating the disclosure of negotiated charges between hospitals and payers may exceed the agency’s legal authority, the American Hospital Association (AHA) stated in its comments on the proposed rule. The proposed rule’s price transparency provisions have rattled the industry and earned criticism from hospitals and payers.

The 2020 OPPS proposed rule goes further than price transparency requirements finalized in the 2019 IPPS final rule, including defining terms such as “standard charges,” enforcing the policy through penalties, requiring the posting of 300 shoppable services, and asking for payer-specific information.

Although the AHA said that it supports increased transparency around patients’ out-of-pocket costs, CMS’ proposal would impose a substantial burden on hospitals with limited benefit to patients. It would also foster an anti-competitive marketplace for payers, a concern America’s Health Insurance Plans also raised in its comments on the proposed rule. The AHA also cautions that the price transparency proposals overstep CMS’ legal authority, raising the possibility of future lawsuits.

Price transparency wasn’t the only proposal that may skirt the outer limits of CMS’ authority, the AHA said in its comments. The association singled out several other proposals that it opposes, and which may exceed CMS’ authority. Specifically, the AHA raised concerns regarding the following proposals:

  • Clinic payment reduction. CMS is proposing to complete the phase-in of reduced payments for hospital outpatient clinic visits in excepted off-campus provider-based departments to 40% of the OPPS rate. The first phase of the reduction was implemented January 1 as part of the 2019 OPPS final rule. A federal judge recently ruled that the policy exceeds CMS’ authority, determining that CMS wasn’t authorized to ignore the statutory process for setting payment rates in the OPPS or to lower payment rates for only some services performed by certain providers. It’s unclear how this ruling will impact the final rule. In its comments on the proposed rule, the AHA advises CMS to immediately restore payments to the rates set before the reduction, repay hospitals for the difference between the amounts they were paid under the reduction and what they were paid previously, and abandon the proposed second phase of the reduction. If CMS moves forward with the proposed completion of the reduced payments, the AHA will continue fighting the cuts in court.
  • Prior authorization. CMS is proposing to require prior authorization for five categories of outpatient services the agency believes are “quasi-cosmetic” services that may easily be billed as medically necessary services and for which CMS has noted an unusual year-over-year increase. The AHA urged CMS to withdraw the proposal, calling it contrary to law, arbitrary, and capricious. The AHA stated that it believes the proposal is contrary to the OPPS statute and, similarly to the recently vacated clinic payment reduction policy, uses an untethered method to control reimbursement independent of other processes.


The AHA also commented on CMS’ proposal to continue its current 340B drug payment policies and reimburse hospitals at average sales price (ASP) minus 22.5%, a policy first introduced in the 2018 OPPS proposed rule and expanded to additional sites in the 2019 OPPS final rule. The policy was widely opposed, and in May a U.S. District Court ruled that the reduction in payments was unlawful. CMS is appealing the ruling and the 2020 OPPS proposed rule proposes to maintain the cuts. However, the agency is also soliciting comments on how to unwind the policy and make remedies for cuts in 2018 and 2019 if its appeal fails. The AHA recommended that CMS return to the previous payment policy of ASP plus 6% and recalculate payments made in 2018 and 2019. The AHA also stated that CMS should avoid implementing any remediation policy that would have a negative financial impact on non-340B hospitals.

Editor’s note: For more information on the OPPS proposed rule, NAHRI members can listen to the July members-only quarterly call. NAHRI Advisory Board members Valerie Rinkle, MPA, CHRI, and Jugna Shah, MPH, CHRI, will take a deep dive into the OPPS proposed rule at the 2019 Revenue Integrity Symposium, October 15–16, during their session “Round the Rule Merry-Go-Round: IPPS, OPPS, and MPFS.”

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