Benefits Byte

October 5, 2020

Council Offers Insights on Health Equity, Site-Neutral Payments in Comments on Medicare Program

On October 5, the Council provided written comments to the U.S. Department of Health and Human Services (HHS) Centers for Medicare and Medicaid Services (CMS) on the proposed annual Medicare regulation governing certain hospital payment and reporting rules.

Although the proposed rule is specific to Medicare and covers a number of topics outside the purview of employer plan sponsors, it addresses two issues of interest to the Council and to plan sponsors: quality reporting and site-neutral payment reform (that is, ensuring payments are tied to type and quality of care, rather than the site at which care is received). This was also an opportunity for the Council to weigh in on a topic related to our efforts to address the social determinants of health.

Quality Reporting

In the proposed regulation, CMS makes some updates to Medicare’s formal quality reporting programs, including the hospital outpatient care and ambulatory surgical center quality reporting programs and the Medicare overall star rating system for hospitals, which have each been in place for years (although the star rating system is for the first time being included in regulations). These quality reporting measures are publicly available on Medicare’s hospital compare website, meaning they can also be useful for employers and employees. 

The Council’s letter generally expressed support for CMS’ ongoing quality efforts, explaining that “greater quality transparency in health care is an area of critical importance for employer plan sponsors and the Council has long supported increased, standardized quality transparency as a means to achieving the goals of lowering the cost and improving the value of health care.”

In addition, the Council took the opportunity to encourage CMS to consider ways in which the Medicare quality reporting system can be updated and augmented to help address inequities in health care, which have only been exacerbated by the pandemic. To this end, we suggested that CMS integrate health equity data into the quality reporting programs, including asking for hospital data on patient social and behavioral health risks and collecting and displaying quality data in a way that illustrates and quantifies inequities, including by race, ethnicity, gender identity and geographic location.

The letter also noted that the Council, and its plan sponsor members, are making efforts to identify and eliminate inequities in benefit plan design and operation and to address the “social determinants of health” to improve health outcomes for employees and their families. The Council recently created a task force to address social determinants of health and potential inequities in plan design and operation, and one issue that has arisen is the need for greater transparency, data collection and quality metrics with respect to health disparities. The ability to comment on this proposed rule presented an opportunity to advance this effort by recommending the integration of health equities into hospital quality reporting programs.

Site-Neutral Payment Reform

Over 2019 and 2020, CMS phased in changes under which Medicare pays the same amount for certain outpatient services provided in a hospital outpatient clinic as it would otherwise pay for that same service in a physician’s office. CMS was sued by hospital groups on this rule but this past summer, the U.S. Court of Appeals for the District of Columbia upheld the rule. In the preamble to the 2021 proposed rule, CMS notes this history but does not make changes, which indicates the policy will continue into the future including in 2021.

The Council’s comment letter reiterated our support for the CMS policy, and explained that the Council and its members are concerned about the impact of provider consolidation and that, accordingly, we have been a strong advocate for site-neutral payment reform and other policies that reduce payment differences based on the health care setting.

For more information on health policy matters, or the Council’s task force on the social determinants of health, contact Ilyse Schuman, senior vice president, health policy, or Katy Johnson, senior counsel, health policy.