Hospital Chargemasters and Open Data from CMS — The conversation continues

When CMS recently released hospital chargemaster and payment data for the 100 hospital codes most frequently billed to Medicare, there was much written and said about the significance of the data release.

Some found this to be significant; others (including your humble HealthBlawger), not so much.

Leonard Kish summed up and addressed the critiques of the value of the CMS open data, and others whose judgment I also respect found that the release was overall a good thing. Gilles Frydman, for one, in a listserv exchange, opined that the release was a net positive because it thrust the irrationality of hospital pricing into the public eye, and that “[i]f enough people get angry, a public push for more transparency will follow.”

I can accept the proposition that data will be valued differently by different parties. However, I want to throw something else into the mix: We are collectively trying to move away from fee-for-service medicine. As the saying goes: the future is already here; it just isn’t evenly distributed. Some are further down the path than others. I think that our time and effort is better spent on ensuring that value-based purchasing systems are up and running, rather than on improving the pricing transparency of FFS medicine.

Eighty-two percent of health plans responding to a recent survey consider payment reform a ‘major priority.’ Nearly 60 percent forecast that more than half of their business will be supported by value-based payment models in the next five years. And, of those, 60 percent are at least mid-way through implementation, according to a study published May 9 by Availity, a health information network.

The Health Plan Readiness to Operationalize New Payment Models study delves into the progress of the country’s commercial health plans, as they migrate from fee-for-service to value-based models of compensating physicians, according to a news release by Availity. The study highlights the consensus among plans that information sharing with physicians must be automated – primarily in real-time – for these models to achieve success.

HealthcareIT News.

On the Medicare front, ACO development and other initiatives of the Center for Medicare and Medicaid Innovation are moving the system away from FFS medicine as well.

There’s a system-wide bet that’s been placed on value-based payment. Historical amounts charged and paid shouldn’t really enter into the construction of this framework, and that’s part of what underlies my negative reaction to the release of the chargemaster and payment data. We should be more focused on things like: revaluing primary and preventive care, global budgeting for episodes of care, adoption and refining of meaningful quality measures and quality-based payment systems (even though not all VBP schemes are working) — all to the same end as the end sought by those who have been cheering the release of the charge and payment data: transparency and a clear connection between payment and delivery of value.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting