Hospitals no longer need to put their negotiated rates with Medicare Advantage payers on the cost report
The mandate for hospitals to share their negotiated rates with MA and other payers, remains.
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In a move praised by the American Hospital Association, the Centers for Medicare and Medicaid Services has repealed the mandate that hospitals report the median payer-specific negotiated charge they make with their Medicare Advantage payers on the Medicare cost report.
This is in effect for the cost reporting periods ending on or after January 1, of this year, CMS said in making the change in its Inpatient Prospective System payment rule released on Monday. Acute care hospitals get a 2.5% pay rate increase for 2022 in the final rule.
WHY THIS MATTERS
CMS said it was getting rid of the requirement that was made under the Trump administration because it could impose an "unnecessary burden on hospitals."
Had hospitals been required to comply with the mandate, it would have resulted in approximately 64,000 hours of administrative burden, CMS said.
CMS first proposed the change in April.
Stacey Hughes, executive vice president of the American Hospital Association, said CMS listened to its concerns by repealing the requirement that hospitals and health systems disclose privately negotiated contract terms on the Medicare cost report.
"This policy was originally adopted for the stated purpose of better aligning fee-for-service Medicare payments with market rates," Hughes said. "However, privately negotiated rates take into account a number of unique circumstances between a private payer and a hospital and are not an appropriate benchmark for fee-for-service Medicare payments."
However, while CMS removed the redundant requirement for hospitals to include Medicare Advantage rates in their cost reports, hospitals are still required to share their negotiated rates for Medicare Advantage as part of the hospital price transparency regulation.
The mandate is not going away. In fact CMS has proposed upping the fine for non-compliance.
THE LARGER TREND
The federal price transparency law went into effect on January 1 after a lengthy court battle. Hospitals balked at sharing their privately-negotiated rates with payers.
In January, the American Hospital Association asked CMS to "exercise enforcement discretion" with respect to the hospital price transparency rule.
In April, CMS proposed the removal of the need to report Medicare Advantage rates on Medicare cost reports.
Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com
