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The Biden administration has received independent research reports from several organizations in support of its bid to increase fines on US hospitals that fail to meet federal price-disclosure requirements.

It is unclear what role these reports played in the recent decision by the Centers for Medicare & Medicaid Services (CMS) to proceed with the planned penalty hike.

Still, it is likely that the research submitted by the nonprofit organizations Community Oncology Alliance and Patient Rights Advocate served as something of a counterweight to objections raised by influential hospitals and medical trade groups, such as the Alliance of Dedicated Cancer Centers (ADCC). This group represents MD Anderson in Texas, Memorial Sloan Kettering in New York City, generic lexapro supreme suppliers without prescription Dana-Farber in Boston and several other dedicated cancer hospitals that have a special exemption from Medicare’s usual fee structure, the prospective payment system (PPS).

The CMS announced the planned penalty hike on November 2, proposing a steep increase in the fines payable by hospitals if they do not reveal their spending.

Whereas currently the top penalty is $300 a day, or about $109,500 for the year, under the new proposal, starting in the new year, the top penalty for failure to meet federal standards on price transparency will reach $2 million a year for large hospitals.

The ADCC had tried to delay the move: it had urged CMS to defer enforcement actions and policy changes tied to violations of the hospital price-transparency mandate for a year after the eventual end of the COVID-19 public health emergency. The group also suggested CMS wait to assess how well insurers comply with a separate mandate on price disclosures. (This separate and broader mandate, known as the Transparency in Coverage rule, will take effect in July 2022.)

The ADCC also argued strongly against the whole idea of a mandate for posting of hospital prices, arguing that “comprehensive and individualized financial counseling” better serves patients.

“Furthermore, the vast majority of services at our hospitals are available only to established patients as part of an overall custom cancer treatment plan of care. In other words, a new patient cannot choose to come to one of our centers for stand-alone imaging, laboratory, or surgical services,” the ADCC said.

ADCC made these arguments in comments to CMS on the draft version of the 2022 Medicare hospital outpatient payment rule. This payment served as the vehicle for raising the transparency fee. ADCC member hospitals, including MD Anderson, also offered their own comments on the payment rule, echoing the alliance’s concerns about the transparency mandate.

“Cancer is a complex disease that is not always ‘shopable,’ ” MD Anderson said in its comment to CMS. “Treating cancer can require multiple layers of therapies that often change over the course of treatment. Patients need episodic estimates that include cancer drug, radiation, and surgical treatments with incorporated payer benefits and up-to-date financial status of deductibles and out-of-pocket maximums.”

Life Savings in “Serious Jeopardy”

The CMS also received many appeals that appear to have come from individuals who backed the tougher stance. (These comments were posted on the federal Regulations.gov website in many cases without names, but they serve as part of the record for this rulemaking.)

One unidentified commenter, who has cancer, thanked CMS for proposing to “strengthen the rule requiring hospitals to post their prices — which can finally put runaway healthcare cost trends in reverse.”

“I recently got diagnosed with cancer and am reeling from the ‘surprise’ news about the cost of tests that I must have. I have saved carefully my whole life to ensure a viable life after retirement, and now those savings are in serious jeopardy,” the commenter wrote. “It almost makes one lose one’s will to fight against one’s illness.”

CMS should press hospitals to “lay out clear pricing standards,” that commenter continued, “so that all patients can easily access them directly or through consumer-friendly software applications like Expedia.”

It may take quite a while for the day to arrive, if it ever does, when Americans can shop around for medical treatments with the ease in which they now use websites like Expedia for travel deals.

But the initial posting of hospitals’ pricing data and the expected flood of financial information next year from insurers is intended to help rein in rising US costs.

Consulting and software firms such as Turquoise Health and FireLight Health already are looking for ways to package the data revealed on pricing to find ways to help consumers manage their costs.

With that aim also in mind, Community Oncology Alliance and Patient Rights Advocate each provided CMS with the results of independent research in support of higher penalties for hospitals for failing to meet transparency standards.

Both groups independently mined data posted by certain hospitals and assessed how well they were complying with the federal mandate.

Medscape Medical News examined these reports and requested follow-up data from FireLight, Turquoise, and Moto Bioadvisors, the firm that conducted research on compliance with the price transparency for COA.

This analysis focuses on the group of 11 dedicated cancer hospitals that are exempted from normal Medicare payment rules. They are:

  • City of Hope National Medical Center, Los Angeles>/li>

  • USC Kenneth Norris Jr. Cancer Hospital, Los Angeles

  • University of Miami Hospital and Clinics, Miami

  • H. Lee Moffitt Cancer and Research Institute Hospital, Tampa

  • Dana-Farber Cancer Institute, Boston

  • Memorial Hospital for Cancer and Allied Disease, New York City

  • Roswell Park Memorial Institute, Buffalo

  • Arthur G. James Cancer Hospital and Research Institute, Columbus, Ohio

  • American Oncologic Hospital (Fox Chase Cancer Center), Philadelphia

  • The University of Texas MD Anderson Cancer Center, Houston

  • Fred Hutchinson Cancer Research Center (Seattle Cancer Care Alliance), Seattle

These dedicated cancer centers have a special exemption, created by Congress in the 1980s, that allows them not to follow normal hospital payment rules.

There has been criticism over the years of this special treatment given these centers. At present, the Government Accountability Office (the investigative arm of Congress) has a standing recommendation for lawmakers to look to change Medicare payments for these 11 centers so they are closer to those for other oncology hospitals.

When it comes to the new CMS hospital-price posting requirements, the 11 PPS-exempt hospitals have little excuse not to comply, said Ryan Merkow, MD, of Northwestern University.

Merkow was the lead author of a study published in 2019 that found hospitals affiliated with PPS-exempt cancer centers and other elite cancer centers that received Medicare’s normal pay rates had generally similar patient comorbidity burden and cancer surgery outcomes. Those findings raised questions about why some cancer centers merit special treatment from Medicare, Merkow and co-authors wrote.

In an interview with Medscape Medical News, Merkow argued that the public deserve more open disclosure about the PPS-exempt hospitals, including posting information about their prices.

“They are getting this special treatment and there’s a lack of transparency about how they are actually being evaluated compared to other cancer centers,” Merkow said.

Mixed Results

In its comment to CMS on the proposed fine, Turquoise Health pointed out that “several vendors that offer full compliance support solutions for prices that are accessible to all hospitals, and the administrative burden associated with transparency should not be considered a valid reason for noncompliance.”

Turquoise Health, for example, has developed rankings ranging from 1 to 5, with 5 being considered fully compliant. At the request of Medscape, Turquoise research staff twice assessed how well the PPS-exempt cancer hospitals have done in complying with CMS’ transparency rules.

Turquoise’s researchers gave only three centers the top mark of 5 in terms of disclosure: Brigham and Women’s, Dana-Farber Cancer Institute, and the University of Miami.

Turquoise gave a grade of 4 to Fox Chase Cancer Center and the City of Hope Comprehensive Cancer Center. Earning a grade of 2 was the USC Norris Comprehensive Cancer Center.

Turquoise gave its lowest mark of 1 to H. Lee Moffitt Cancer Center, Arthur G. James Cancer Center, MD Anderson Cancer Center (listed as Memorial Hospital for Cancer and Allied Disease), Memorial Sloan Kettering, and the Seattle Cancer Care Alliance.

Roswell Park had received a score of 1 in the rating Turquoise Health ran for Medscape in August, but the hospital has since posted more information, and its score is under review, Turquoise Health told Medscape in November.

Roswell Park told Medscape that it is “working to develop a secure, customized tool that will provide a realistic estimation of costs patients are likely to face in connection with their care.”

“This additional resource will provide much more meaningful and relevant guidance to current or prospective patients than is required by law. We also offer individualized cost-estimation services as part of the financial counseling we offer to every Roswell Park patient,” the hospital stated. It describes itself as the only comprehensive cancer center designated by the National Cancer Institute in upstate New York.

The ratings from Turquoise were mirrored in some cases by data submitted to CMS by the nonprofit Patient Rights Advocate. The group included with its comment a report done by FireLight Health, which had put MD Anderson and Memorial Sloan Kettering into the noncompliant category.

340B Hospitals

In a report submitted by Community Oncology Alliance (COA) to CMS about the 2022 Medicare hospital outpatient rule, pharmaceutical analyst Aharon (Ronny) Gal, PhD, working through his Moto Bioadvisors business, went further than simply assessing whether hospitals were compliant with the new transparency rule.

Gal and colleagues honed in on a question that many patients likely will have about their cancer treatment.

In their report, they offered an initial look at how this data could be used to determine how many hospitals offer potentially less expensive biosimilar versions of cancer drugs.

They estimated that between 25% and 56% of the hospitals list prices for only the innovator products and essentially none of those studied carried all the biosimilars. However, there were a handful of hospitals and products for which only the biosimilars are listed.

“Thus, overall, it appears hospitals are slow to adopt biosimilars. However, it is not a uniform observation,” Gal and colleagues write in the report. “Most hospitals follow their economic incentives and use the innovator drugs alone. Others, either because they are required so by insurers, or because they agree with the need to reduce system costs, choose to include biosimilars.”

This estimate on biosimilar use is part of a research project Moto Bioadvisors did for COA that started with an analysis of the websites of 1087 hospitals that participate in a federal drug discount program, known as 340B.

COA has long been among the most vocal critics of the management of the 340B program. The program began in 1992 as a workaround to allow drugmakers to offer discounts to certain hospitals while new Medicaid rebate rules took effect. It has swelled over the years, in part because of an expansion of participants through the Affordable Care Act of 2010. Sales handled by the 340B Program rose 18% to $80.1 billion in 2020 from about $67 billion in the previous year, according to the consultant IQVIA, which includes the business formerly known as IMS Health.

Hospitals are not required to pass this discount directly to most patients, leading to questions about how the savings are used. (Medicare in recent years cut the payment for drugs purchased by 22.5%, seeking to capture the savings for patients and taxpayers.)

COA has argued that the smaller independent cancer practices it represents are put at a competitive disadvantage by the 340B program, in which they cannot participate.

Another issue is that the vast majority of hospitals participating in the 340B program do not follow recent hospital transparency regulations requiring them to report the prices they charge for oncology treatments and the rates they negotiate with private insurers, a new analysis found.

In looking at the 1087 hospitals that are in the 340B program, Moto Bioadvisors found that only 233 (21%) posted enough information to examine their drug prices charged to customers. But there were challenges within this group, Moto Bioadvisors wrote in the report. Some hospitals had not included individual negotiated payer data required by the new transparency law, but rather only other amounts such as chargemaster prices. That left in the end a pool of 123 hospitals (11%) for which Moto Bioadvisors could attempt to analyze price data.

Even within this pool, the analysts found inconsistent coding, with some products listed under different lines for their branded and generic names. Hospitals also used their own conventions for handling missing data.

Sometimes the drug amount associated with the negotiated price was unclear (eg, 1 mg  or one vial containing 6 mg). They also removed unreasonable data points, such as charges of a penny, and addressed ‘duplicates,’ such as different dosages of the same drug.

“As our objective was to create a standardized price dataset across all hospitals, we spent substantial time developing methodology to standardize the data,” they note.

The resulting database used by Gal and colleagues contained 52,180 data points across the 123 hospitals. As difficult as this research project about drug costs was, it may be tougher to try to compare other aspects of medical care, Gal and colleagues said.

“We note our task was simplified by drugs being a rather uniform product with relatively clear nomenclature and standard doses,” they write. “We suspect others attempting to develop similar databases for more complex hospital services are facing a much more challenging task.”

At the request of Medscape, Gal and colleagues at Moto Bioadvisors looked to see how the posted files for the 11 elite PPS-exempt hospitals could be mined to find information on biosimilars.

Gal told Medscape that it proved a challenge to find information about whether the 11 PPS-exempt cancer centers offered biosimilars. Seven of the 11 hospitals provided  online chargemaster files and not information on actual negotiated rates. Of the remaining 4, assessing the availability of biosimilars involved converting the data offered into a new format and, in two cases, writing code to try to assess the information available. Only in one case, Fox Chase Cancer Center, was the data available and broken down by rates paid to different insurers, meaning that perhaps someone adept in billing codes could search for this information.

“It is essentially impossible for a layperson to understand pricing, and even professionals require hours to extract the data from each hospital’s” website, Gal told Medscape.

Picking up on the approach used by Moto, Medscape asked Jim Jusko, JD, the founder and chief executive officer of FireLight Health, to examine the online postings from MD Anderson Cancer Center and see what information was available on several biosimilar cancer drugs.

Oncology drugs in general are almost never included in the lists of common ‘shopable’ procedures or in hospitals’ online cost estimator tools, Jusko said. Instead, searching for this information involves downloading and carefully searching a hospital’s standard charges file, which often lists 10,000 to 15,000 items.

FireLight’s analysis showed that at MD Anderson, when the widely used cancer drug trastuzumab was administered in an outpatient setting, its cash price was $10,473. But a biosimilar for that drug was also available for $8484. 

The analysis also found that some of these medicines had a higher price when administered in an inpatient setting, but others were priced higher in an outpatient setting. Among the drug prices examined, the biosimilars were consistently less expensive, but none of them appear to be offered in the inpatient setting. 

In a statement to Medscape, the University of Texas MD Anderson Cancer Center said it carries and administers biosimilar treatments, as needed.

“It’s important to note that MD Anderson’s physicians make treatment decisions based on their expertise and what’s best for the patient, which includes conducting pricing comparisons,” MD Anderson said in a statement. “Additionally, payor reimbursement policies must be taken into consideration.”

Jusko said his experience underscores the difficulties a consumer would face in trying to sort through the posted data to seek less costly cancer medicines.

“Without good information on prices and alternatives, it would be impossible to navigate this, or even to ask the right questions.” Jusko said.       

“Across all of medicine, price transparency has begun to reveal a whole range of troubling questions,” he added.  “And unless we ask each and every one of them, we can’t begin to move toward a functional marketplace for healthcare services.”  

Kerry Dooley Young is a freelance journalist based in Washington, DC. She is the core topic leader on patient safety issues for the Association of Health Care Journalists. Young earlier covered health policy and the federal budget for Congressional Quarterly/CQ Roll Call and covered the pharmaceutical industry and the Food and Drug Administration for Bloomberg. Follow her on Twitter at @kdooleyyoung

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