CMS Seeks to Improve Healthcare Outcomes and Drive Down Costs


CMS’ proposed actions are intended to increase price transparency, access to care, patient safety, positive healthcare outcomes, and health equity.

On July 19, 2021, the Centers for Medicare & Medicaid Services (CMS) announced new proposed actions to address the health equity gap, decrease mounting healthcare costs, and increase medical accessibility and patient quality of care.

Piggybacking on the recent governmental Competition Executive Order which seeks to promote economic competition and fairness, CMS is strengthening its efforts to increase price transparency and address other inequities in healthcare.

The proposed rule includes the following actions:

Price Transparency

When a patient is unable to make a fully informed decision regarding their healthcare in a hospital, the financial burden that may arise can be devastating. Price transparency lets consumers know what a hospital charges for the items and services they provide before receiving them. This allows patients to shop around ahead of time to estimate their cost of care before choosing a hospital. This practice is intended to also help increase market competition and ultimately drive down healthcare costs.

The CMS Hospital Price Transparency final rule went into effect on Jan. 1, 2021, and required each hospital operating within the United States to provide clear, accessible pricing information online about the items and services they provide in two ways:

As a comprehensive machine-readable file that lists all items and services; and

In a display of 300 shoppable medical services in a consumer-friendly format.

Unfortunately, many hospitals have chosen not to fully comply with this rule. CMS has been receiving complaints from consumers to that effect since the rule was implemented and began sending out warnings in April to hold hospitals accountable. CMS now proposes to increase the penalty for some hospitals that do not comply with the rule, setting the following penalties:

A minimum civil monetary penalty of $300/day (smaller hospitals with a bed count of 30 or fewer)

A penalty of $10/bed/day for hospitals with a bed count greater than 30, not to exceed a maximum daily dollar amount of $5,500

For a full calendar year (CY) of noncompliance, the minimum total penalty amount would be $109,500 per hospital, and the maximum total penalty amount would be $2,007,500 per hospital.

Health Equity

The health equity gap has been a much talked about topic in recent months. CMS reports it is “seeking input on ways to make reporting of health disparities based on social risk factors and race and ethnicity more comprehensive and actionable. This includes soliciting comments on potential collection of data, and analysis and reporting of quality measure results by a variety of demographic data points including, but not limited to, race, Medicare/Medicaid dual eligible status, disability status, LGBTQ+, and socioeconomic status.”

Access to Emergency Care in Rural Areas

In the last decade, rural hospitals have been closing at an alarming rate — 138 since 2010 — depriving those who live in rural communities of crucial medical services and emergency care. As a result, rural communities experience shorter life expectancy, higher mortality, and have fewer local providers, leading to worse health outcomes than in other communities.

To address this problem, Congress enacted Section 125 of the Consolidated Appropriations Act of 2021, which establishes a new provider type for rural emergency hospitals (REHs). According to CMS, “REHs will be required to furnish emergency department services and observation care and may provide other outpatient medical and health services as specified by the Secretary through rulemaking.” CMS is now requesting information to inform the development of requirements that would apply to REHs. This new provider designation will apply to items and services furnished on or after Jan. 1, 2023.

CMS is seeking feedback on a wide range of issues to help inform policy proposals for the CY 2023 rulemaking cycle, including feedback on the potential services to be provided by REHs; health and safety standards and quality measures to be established for REHs; and payment provisions for this provider type.

COVID-19 Lessons

To incorporate lessons learned from the COVID-19 pandemic, CMS is seeking comment on the extent to which hospitals are using flexibilities offered during the COVID-19 public health emergency (PHE) to provide mental health services remotely and whether CMS should consider changes to account for shifting practice patterns. In addition, CMS is proposing changes to measure how many of our nation’s front-line healthcare workers in hospital outpatient departments and ambulatory surgery centers (ASCs) are vaccinated against COVID-19, and to make this information available to the public so consumers know how many workers are vaccinated in different healthcare settings.

Improving Patient Experience and Outcomes

The Radiation Oncology (RO) Model aims to improve the quality of care for cancer patients receiving radiotherapy and move toward a simplified and predictable payment system. The RO Model tests whether prospective, site neutral, modality agnostic, episode-based payments to physician group practices, hospital outpatient departments, and freestanding radiation therapy centers for radiotherapy episodes of care reduce Medicare expenditures while preserving or enhancing the quality of care for Medicare beneficiaries.

CMS is proposing changes to the RO Model which aim to improve the experience of patients receiving radiation treatment, while incorporating evidence-based best practices to help providers improve patient outcomes. Because of the PHE, however, the timeline has been pushed out six months. The RO Model will begin on Jan. 1, 2022, with a five-year performance period (ending Dec. 31, 2026.) For more information, visit CMS’ Radiation Oncology Model page or proposed rule CMS-1753-P.

Patient Safety

CMS is reversing changes made for 2021 regarding the care setting for which Medicare will pay for surgical procedures that may pose risk to patients. Specifically, the agency is proposing to halt the phased elimination of the Inpatient Only List, citing services designated as inpatient only that, given their clinical intensity, would not be expected to be performed in the outpatient setting.

CMS removed musculoskeletal procedures from the list in 2021 without individually evaluating whether the procedures met the long-standing criteria previously used to determine if a procedure could be safely removed. For some of the musculoskeletal services removed, like limb amputations and invasive spinal procedures, it was found that the criteria for removal were not met, with insufficient supporting evidence that the service can be safely performed in the outpatient setting.

CMS is proposing to add them back to the list in 2022 and is seeking comment on whether to maintain the longer-term objective of eliminating the IPO list, maintain the IPO list, or maintain the list but continuing to streamline the list of services.

CMS is also proposing to reinstate the patient safety criteria it uses to evaluate whether a procedure should be payable in the ASC setting that were removed in 2021. CMS is proposing to adopt a nomination process whereby the public can formally nominate procedures it believes are safe to perform in the ASC setting.

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