CMS posts prices, bans cobranding

July 1, 2006

WASHINGTON, D.C.-Government officials have been talking about more "transparency" in health information to better inform consumers and practitioners of the cost and quality of hospital and medical services. As a first step, the Centers for Medicare and Medicaid Services (CMS) is disclosing data about what Medicare pays hospitals for 30 common elective procedures and other hospital admissions. Patients now can find out how costs vary across counties in the United States for heart operations, hip and knee replacement, kidney and urinary tract operations, and cardiac defibrillator implants.

WASHINGTON, D.C.-Government officials have been talking about more "transparency" in health information to better inform consumers and practitioners of the cost and quality of hospital and medical services. As a first step, the Centers for Medicare and Medicaid Services (CMS) is disclosing data about what Medicare pays hospitals for 30 common elective procedures and other hospital admissions. Patients now can find out how costs vary across counties in the United States for heart operations, hip and knee replacement, kidney and urinary tract operations, and cardiac defibrillator implants.

It's not clear how useful the cost data will be for the average consumers, as it does not give specific prices for individual hospitals, nor does it compare Medicare rates to what patients with private insurance or no insurance have to pay. And seniors will have to figure out what their individual copays and deductibles might be based on their own coverage situations. But the Web site will include information on the volume of each procedure at individual hospitals; this aims to help consumers identify the more experienced institutions, which often correlates to better outcomes.

The overall goals of posting more healthcare price information is to make consumers more aware of the cost of care and how much quality and price varies among institutions and geographic regions. CMS plans to post payment information for common ambulatory surgery centers later this summer, and hospital outpatient and physician services in the fall. This information will help consumers weigh healthcare services and assist employers in selecting plan options. Providers may find the data useful for evaluating where they stand, and plans consider the information helpful in evaluating providers.

Sponsors of Medicare drug plans no longer can print the name or logo of a marketing partner on the plans' ID card, according to updated marketing guidelines issued by CMS. Some pharmacists have complained that identifying pharmacy partners on the ID card has confused beneficiaries. The campaign to curb cobranding pitted those pharmacy chains with links to prescription drug plans (PDP) against those less directly involved with Part D marketing.

CMS has resolved the dispute by banning cobrand listings from ID cards. But the agency stopped short of killing such joint marketing arrangements altogether; support from pharmacies and consumer and health organizations may deserve some credit for the success in building enrollment in the Medicare drug benefit in its first year.