Category Archives: Transparency

California legislature passes bill requiring Kaiser Permanente to follow financial disclosure laws

Posted on by • Posted in Health Policy, Health System, Hospital, Hospital Industry, Transparency • Leave a comment

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The bill would require Kaiser Permanente to provide more data about the revenue and profits of individual hospitals.

Legislation requiring healthcare giant Kaiser Permanente to follow more of the same financial disclosure laws as other healthcare providers in California passed the Senate Monday and now heads to Gov. Gavin Newsom, who has 10 days to decide whether to sign it into law.

The bill, SB 343, would require Kaiser Permanente to provide more data about the revenue and profits of individual hospitals, whereas now it lumps those figures for all facilities into two broad categories: “Northern California” and “Southern California.” Of the roughly 400 hospitals operating in California, all but the 35 owned by Kaiser Permanente must comply with financial reporting requirements on a per-facility basis.

WHAT’S THE IMPACT

The new requirements for Kaiser Permanente would include breaking out expenses and revenue at each facility; breaking out revenue by type of payor at each facility (Medicare, Medi-Cal or private insurance); and breaking out rate increases by type of service (hospital, physician services, pharmacy, radiology and laboratory).

For Kaiser Permanente to comply with the legislation, it is estimated it would need to hire two workers to compile and distribute related data on a quarterly basis. The corporation has 250,000 employees and operating revenue of nearly $80 billion.

Kaiser Permanente, despite being a nonprofit healthcare system, has reported $11 billion in profits since Jan. 1, 2017 — including $5.2 billion just in the first half of 2019. It has made more in profits in the first six months of 2019 than it has ever recorded in an entire year and sits on reserves of more than $37 billion. Meanwhile, premiums for Kaiser patients have gone up year after year as part of a rate-setting process.

With Kaiser controlling more than 65% of insured Californians with large group healthcare coverage, SB 343 would allow employers and others to negotiate fair rates when purchasing health insurance for their workers.

The measure passed the California Assembly 58-13 on Aug. 22, and it is supported by a coalition of healthcare, consumer, business and worker advocates.

Kaiser Permanente did not immediately respond to a request for comment.

THE LARGER TREND

In June, Kaiser Permanente announced plans to construct a new headquarters — The Kaiser Permanente Thrive Center — in Oakland, bringing together staff currently spread out across multiple locations. The health system said the impetus behind the $900 million project is reducing annual operating costs and delivering more affordable care and coverage.

Officials say the new downtown Oakland building will reduce operational costs by more than $60 million annually, addressing facilities maintenance, inefficient utility expenses, and rising commercial real estate leases. Reinvesting these savings will help the health system advance its mission of providing quality, affordable care.

ON THE RECORD

“For too long, Kaiser Permanente has operated under a different set of rules when it comes to financial transparency, and this bill will finally bring the corporation more in line with other hospitals and insurance companies,” said Sen. Richard Pan, D-Sacramento, the author of SB 343. “Employers and individual Kaiser customers deserve to know if they are getting value when Kaiser increases their premiums and copays.”

 

 

Hospital price transparency push draws industry ire, but effects likely limited

Posted on by • Posted in America's Health Insurance Plans, American Hospital Association (AHA), Federation of American Hospitals, Health Insurance Industry, Health Policy, Health System, Hospital, Medical Group Management Association (MGMA), Out of Pocket Expenses, Paperwork Burden, Physician, Physician Practice Management, President Executive Order, Price Transparency, Transparency • Leave a comment

https://www.healthcaredive.com/news/hospital-price-transparency-push-draws-industry-ire-but-effects-likely-lim/557536/

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Far-reaching rules mandating industry price transparency could mark a major shift, but experts are skeptical the efforts will meaningfully lower prices for patients without a more fundamental system overhaul.

President Donald Trump’s executive order signed Monday directs HHS and other federal departments to begin rulemaking to require hospitals and payers to release information based on their privately negotiated rates. Providers would also have to give patients estimates of their out-of-pocket costs before a procedure.

The moves come amid efforts from the federal government and Congress to push the healthcare industry to address patient anger over high prices, particularly regarding what medical bills they can expect to receive.

Many details must still be worked out as HHS and CMS craft their proposals, but providers and payers were quick to condemn any notion of making negotiated rates public. A legal challenge to the rules is also likely.

Many policy analysts and economists said that while price transparency is good in theory, current evidence shows patients don’t take advantage of pricing information now available, said Ateev Mehrotra, associate policy of healthcare policy and Harvard Medical School.

Patients are wary of going against a doctor’s advice to undergo a certain procedure or test, and to get it done at a certain facility. A difference in price may not be enough to sway them.

Also, the healthcare system has so many moving parts and unique elements that understanding a medical bill and how the price was calculated is daunting, to say the least.

“That complexity hinders the ability of people to effectively shop for care,” Mehrotra told Healthcare Dive “It’s not like going to Amazon and buying a toothbrush or whatever.”

What the order actual does

The executive order has two main directives:

  • Within 60 days, HHS must propose a regulation “to require hospitals to publicly post standard charge information, including charges and information based on negotiated rates and for common or shoppable items and services, in an easy-to-understand, consumer-friendly, and machine-readable format using consensus-based data standards that will meaningfully inform patients’ decision making and allow patients to compare prices across hospitals.”
  • Within 90 days, HHS and the Departments of Labor and Treasury must solicit comment on a proposal “to require healthcare providers, health insurance issuers, and self-insured group health plans to provide or facilitate access to information about expected out-of-pocket costs for items or services to patients before they receive care.”

The order also outlines smaller steps, including a report from HHS on how the federal government and private companies are impeding quality and price transparency in healthcare and another on measures the White House can take to deter surprise billing.

It also directs federal agencies to increase access to de-identified claims data (an idea strongly favored by policy analysts and researchers) and requires HHS to identify priority databases to be publicly released.

The order requests the Secretary of the Treasury expand coverage options for high-deductible health plans and health savings accounts. It specifically asks the department to explore using HSA funds for direct primary care, an idea Senate HELP Committee Chairman Lamar Alexander, R-Tenn., said he “especially like[d].”

Industry pushes back

The order itself wastes no time in pointing the finger at industry players for current patient frustrations with the system. “Opaque pricing structures may benefit powerful special interest groups, such as large hospital systems and insurance companies, but they generally leave patients and taxpayers worse off than would a more transparent system,” according to the document.

As expected, payer and provider groups slammed any attempt to force them to reveal the rates they negotiate behind closed doors, though they expressed appreciation for the general push toward more transparency.

The American Hospital Association shied away from strong language as details are still being worked out, but did say “publicly posting privately negotiated rates could, in fact, undermine the competitive forces of private market dynamics, and result in increased prices.”

The Federation of American Hospitals took a similar tone in a statement from CEO Chip Kahn. “If implementing regulations take the wrong course, however, it may undercut the way insurers pay for hospital services resulting in higher spending,” he said.

Both hospital groups highlighted more transparency for patient out-of-pocket costs and suggests the onus should be on payers to communicate information on cost-sharing and co-insurance.

Mollie Gelburd, associate director of government affairs at MGMA, which represents physician groups, said doctors don’t want to be in the position of explaining complex insurance terms and rules to a patient.

“While physicians should be encouraged to talk to patients about costs, to unnecessarily have them be doing all this education when they should be doing clinical care, that sort of gets concerning,” she said.

Practices are more concerned about payer provider directories and their accuracy, something not addressed in the executive order. Not having that type of information can be detrimental for a patient seeking care and further regulation in the area could help, Gelburd said.

Regardless, providers will likely view with frustration any regulations that increase their reporting and paperwork burdens, she said.

“I think the efficacy of pricing transparency and reducing healthcare costs, the jury is still out on that,” she said. “But if you have that onerous administrative requirement, that’s certainly going to drive up costs for those practices, especially those smaller practices.”

Payer lobby America’s Health Insurance Plans was quick to voice its opposition to the order.

CEO Matt Eyles said in a statement disclosing privately negotiated rates would “reduce incentives to offer lower rates, creating a floor — not a ceiling — for the prices that hospitals would be willing to accept.” He argued that current tools payers use to inform patients of cost expectations, such as cost calculators, are already offering meaningful help.

AHIP also said the order works against the industry’s efforts to shift to paying for quality instead of quantity. “Requiring price disclosure for thousands of hospital items, services and procedures perpetuates the old days of the American health care system paying for volume over value,” he said. “We know that is a formula for higher costs and worse care for everyone.”

Limited effects

One potential effect of making rates public is that prices would eventually trend toward equalization. That wouldn’t necessarily reduce costs, however, and could actually increase them for some patients. A payer able to negotiate a favorable rate for a specific patient population in a specific geographic area might lose that advantage, for example, Christopher Holt, director of healthcare policy at the conservative leaning American Action Forum, told Healthcare Dive.

John Nicolaou of PA Consulting told Healthcare Dive consumers will need help deciphering whatever information is made available however. Reams of data could offer the average patient little to no insight without payer or third-party tools to analyze and understand the information.

“It starts the process, just publishing that information and just making it available,” he said. “It’s got to be consumable and actionable, and that’s going to take a lot more time.”

The order does require the information being made public be “easy-to-understand” and able to “meaningfully inform patients’ decision making and allow patients to compare prices across hospitals.” That’s far easier said than done, however, Harvard’s Mehrotra said. “We haven’t seen anybody able to put this information in a usable way that patients are able to effectively act upon,” he said.

Holt said patients are also limited in their ability to shop around for healthcare, considering they often have little choice in what insurance company they use. People with employer-based plans typically don’t have the option to switch, and those in the individual market can only do so once a year.

Another aspect to consider is the limited reach of the federal government. CMS can require providers and payers in the Medicare Advantage program, for example, to meet price transparency requirements, but much of the licensing and regulations for payer and providers comes at the state level.

Waiting for details, lawsuits

One of the biggest questions for payers and providers in the wake of Monday’s announcement is how far exactly the rulemaking from HHS will go in mandating transparency. One one end, the requirements could stick close to giving patients information about their expected out-of-pocket costs without revealing the details of payer-provider negotiations. Full transparency, on the other hand, would mean publishing the now-secret negotiated rates for anyone to see.

“I think it’s the start of a much longer process,” Holt said. “It’s going to depend a lot on how much information is going to be required to be divulged and how that’s going to be collected.”

It’s almost certain that as soon as any concrete efforts at implementation are made, lawsuits will follow.

That’s what happened after Ohio passed a price transparency law in 2015 that required providers give patients information on out-of-pocket costs before a procedure — a proposal the executive order also puts forward.

The law still has not been enforced, as it has been caught up in the courts. The Ohio Hospital Association and Ohio State Medical Association sued over the law, arguing it was too vague and could lead to a delay in patient care.

 

The Critical Role of Trust In Avoiding a “Charge of the Light Brigade”

Posted on by • Posted in Ability, Change Management, Commitment, Duty, Leadership, Leadership Trust, Management, Manager Trust, Transparency, Trust, Truth • Leave a comment

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The importance of leadership trust increases as the pace of change accelerates. Leaders in hyper-competitive and turbulent business environments need employees to support decisions without a lot of extensive explanation and back and forth discussion. It is not that change management topics like “what’s in it for me” are not important. It is simply a matter that when you need quick action, you may not have time to fully explain why this action is critical.

The need for fast action creates a dilemma for leaders. To move quickly, leaders need employees to accept and believe in their decisions without demanding a lot of discussion and justification. On the other hand, leaders do not want employees to blindly accept leadership decisions if they know these decisions could be leading the company down a path of failure. This issue was famously captured in Tennyson’s poem “The Charge of the Light Brigade” where he described soldiers responding to a questionable order with the stanza “theirs not to make reply, theirs not to reason why, theirs but to do & die.” While this phrase summons up notions of courage and duty, the story it describes is a tragic example of people following leadership orders they knew were foolish. In the case of the Light Brigade, the unwillingness to question the wisdom of their leaders led to 278 needless casualties of which 156 were killed.

Leadership in fast moving world requires asking employees to trust your decisions while ensuring employees are willing to criticize your decisions. To quote General Colin Powell, “Leadership is solving problems. The day soldiers stop bringing you their problems is the day you have stopped leading them.” How can leaders create the sort of trust that strikes this balance between employees accepting decisions but also questioning them? The following are some suggestions based on psychological research studying trust in organizations.

If you do not trust your employees, they will not trust you.

People are good at picking up subtle cues that show whether their co-workers trust their commitment and abilities. If a leader lacks trust and confidence in their employees, then employees will soon lack trust and confidence in that leader. This is a major issue when companies restructure. It is common to assign leaders to “fix” struggling divisions of a company. If these leaders believe existing employees are to blame for the previous problems, then they are almost certain to fail in gaining the trust of those employees when they most need it.

Trust depends on sharing bad news.

Some leaders believe the best way to build employee confidence is to hide bad results and downplay challenges the company is facing. This behavior damages leadership trust. Employees put more trust in leaders who openly share information with them, both good and bad. This goes back to employees trusting leaders who trust them. Leaders who trust employees with sensitive information about company performance are both educating employees on the realities the company is facing and building leadership trust in return. There is a right way to share bad news to avoid undermining confidence. But not sharing bad news at all undermines trust.

Trust comes from you knowing your employees (not just them knowing you).

One often hears leaders attempt to build trust by saying things like, “Anyone who knows me will tell you I am a person of my word.” What these leaders fail to understand is trust, particularly when it comes to providing critical upward feedback, is often more dependent on leaders knowing their employees then employees knowing their leaders. Employees put themselves at risk when they say things that might be viewed as critical of leadership decisions and behaviors. And employees do not want their only interactions with leaders to be centered on them sharing problems. This is captured by something a colleague once told me, “Why would I tell our division president what he is doing wrong if he doesn’t even know what I do. He’d just think of me as that person who complains.”

Building trust with employees depends on getting to know employees. The only way to know your employees is to spend time with them. Short personal interactions have big effects on trust. One way to see the difference between effective and ineffective leadership in this area is to observe executives at company conferences. The ones employees trust are the ones who spend time with employees two or three levels below them. These leaders intentionally start conversations with employees they do not know. Executives employees often mistrust are ones who spend their time in closed conference rooms or fancy dinners talking with other senior executives and people they already know.

Leadership trust comes through manager trust.

Managers play a critical role in building leadership trust. Managers have more time to spend getting to know employees, and as a result they can build far stronger relationships. What is interesting is that how much employees trust their managers depends in part on how much managers trust their own leaders. There is as a “trickle down” effect associated with trust. When leaders build trusting relationships with their managers, their managers are more likely to build trusting relationships with their employees. This is good news for leaders because it means that they can delegate the role of building trust to managers. But the only way to do this is to spend time with their own direct reports. And increasingly companies are adopting organizational structures where executives will have 15 or more people reporting to them. This increases the risk that executives may not spend enough time building trusting relationship with their own reports, which in turn will undermine leadership trust lower within the company.

It is often said that “trust takes years to build but seconds to destroy.” The first part of this statement is not necessarily true. Trust can be built fairly quickly. This is good news for leaders in a fast-moving world where trust needs to be established in a matter of days or weeks. But leadership trust will not come from leaders simply saying, “Trust me.” The only way to build leadership trust is for executives to demonstrate that they trust the employees, communicate with employees in a transparent manner, make time to get to know employees at all levels, and focus on building strong relationship with the people who actually manage the employees. Building leadership trust may not take years, but it does take active time and attention.

 

 

Trump’s health care focus puts GOP on edge

Posted on by • Posted in 2020 Election Issues, ACA, Health Policy, Transparency • Leave a comment

Trump’s health care focus puts GOP on edge

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President Trump has put the issue of health care back on the political front burner, providing ammunition to Democrats and worrying Republicans who think a new battle over ObamaCare will hurt their party in next year’s elections.

Senate Republicans, defending 22 seats next year, thought they had put ObamaCare repeal behind them when they told Trump earlier this year that they have no intention of acting on a health care overhaul before the election.

But Trump threw the issue back at them in an interview with ABC News that aired Sunday, saying his administration will unveil “something terrific” to overhaul the nation’s health care system “in a month.” He argued that action is needed because “ObamaCare has been a disaster.”

Republican lawmakers have little idea of what to expect and say there hasn’t been communication from the administration on the issue.

“All the members of Congress thought it had subsided and hope that it continues to be subsided,” one senior GOP aide said.

“We don’t actually agree with each other on what replacement should be, which means we don’t have a replacement that Republicans can unite around,” added the aide, who called Trump’s remarks a “political gift for Democrats.”

Speaker Nancy Pelosi (D-Calif.), signaling she likely agrees with the GOP aide, released a statement Monday denouncing Trump’s plan and saying Democrats would “fight relentlessly” against it.

“The American people already know exactly what the president’s health care plans mean in their lives: higher costs, worse coverage and the end of lifesaving protections for people with pre-existing conditions,” she said.

Senate Majority Leader Mitch McConnell (R-Ky.) offered a cautious take, stating of Trump in an interview with Fox News that “we’re looking forward to seeing what he’s going to recommend.”

McConnell added that there’s no chance Congress will act on anything Trump proposes until after next year’s election.

“The problem in the Senate and the House is the Democrats control the House. Se we can’t pass what we would like to do,” he said in an interview on “Fox & Friends.”

McConnell has told colleagues he wants to play offense by making the 2020 health care debate about Democrats’ calls for a single payer “Medicare for All” system. Trump’s move makes that more difficult.

“Democrats would much rather say, ‘Republicans are trying to take away ObamaCare and are trying to repeal the law on preexisting conditions’ and not make it about Medicare for All,” the GOP aide said.

Senate Minority Leader Charles Schumer (D-N.Y.) also took a shot at the president, saying Trump had repeatedly promised but failed to provide a “magic health care plan.”

“It never comes out,” Schumer tweeted. “Instead they just keep trying to sabotage your health care and suing to end protections for pre-existing conditions.”

The administration filed a legal brief in May calling for an appeals court to strike down all of ObamaCare. This represented a switch, first revealed in March, days after special counsel Robert Mueller’s report was filed with the Department of Justice, from the administration’s earlier position that only portions of the law should be struck down.

Many Republicans were caught off guard by the administration’s legal brief, which was widely seen in GOP circles as a mistake.

Republicans in the Senate, rather than focusing upon repealing the health care law, have sought to work on bipartisan legislation to lower health care costs.

Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander (R-Tenn.) last month introduced a bill with Sen. Patty Murray (Wash.), the ranking Democrat on his committee, to address surprise medical billing and improve transparency for drug pricing.

In a statement last week, he emphasized the bipartisan nature of the proposal.

Separately, Senate Finance Committee Chairman Chuck Grassley (R-Iowa) is working with Sen. Ron Wyden (Ore.), the top-ranking Democrat on his panel, on legislation to cap seniors’ prescription drug expenses under Medicare.

Polls show why Republicans are nervous about ObamaCare.

A Wall Street Journal-NBC News poll published earlier this month showed that 24 percent of respondents nationwide think health care should be the federal government’s top priority, and Democrats lead Republicans on the issue by 8 points.

Democrats also won back the House majority last fall largely by talking about health care and the GOP’s failed effort to repeal ObamaCare.

“It’s been a loser of an issue for them,” said John Weaver, a GOP strategist who previously worked for former Ohio Gov. John Kasich (R) and the late Sen. John McCain (R-Ariz.). “In the last cycle it was one of the main causes for them losing the House.”

Some Republicans on Capitol Hill are skeptical about whether the White House will come out with a detailed health care plan and suspect that Trump’s latest comments may be more motivated by the desire to signal to his conservative base that he hasn’t given up on repealing ObamaCare.  

“The president and congressional Republicans have two fundamentally different political views on health care — not substantive views but political views. The president thinks any health care reform, repeal and replace, is a win and goes into his column and helps him and the Republicans,” said Vin Weber, a Republican strategist.

Weber said the GOP’s best strategy going into 2020 is “attacking the Democrats for being too far to the left, and the Democrats are giving them ammunition.”

McConnell in April said the key to GOP success in 2020 is to make the election “a referendum on socialism,” while Weaver on Monday said Republicans would like Trump to simply focus on the economy.

“You think he would be focused on the economy,” Weaver said. “Republicans have no credibility when it comes to health care.”

He called Trump’s renewed health care push “politically irresponsible.”

 

Wonky Supreme Court Ruling on Medicare DSH Formula to Affect More Than Money

Posted on by • Posted in Center for Medicare and Medicaid Services (CMS), Dept of Health and Human Services (HHS), Health Policy, Health System, Hospital, Medicare Disproportionate Share Reimbursement, Notice-and-Comment Rulemaking, Supreme Court, Transparency, Uncertainty • Leave a comment

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Moving forward, the government will have to complete notice-and-comment rulemaking for a broader set of its decisions.

KEY TAKEAWAYS

Monday’s decision by the Supreme Court kicks the dispute back to the District Court level. What happens next is unclear.

Beyond the money at stake, this case increases the rulemaking burden on HHS and CMS, though the extent of that burden is disputed.

Hospitals that treat high numbers of low-income patients secured a big win this week at the U.S. Supreme Court.

Seven of the justices agreed that officials in the U.S. Department of Health and Human Services stepped out of line when they rejiggered a Medicare reimbursement formula for disproportionate share hospitals (DSH) five years ago without a formal notice-and-comment process.

The decision carries implications well beyond the money hospitals say they are owed.

“It’s a big deal for the hospitals, obviously,” says Helen R. Pfister, JD, a New York–based partner with Manatt Health.

By the government’s estimates, the dispute implicates $3-4 billion in payments over nine years. That’s how much more the Centers for Medicare & Medicaid Services would have paid in DSH reimbursements, had the formula not been changed, according to court records.

“But I think it’s also a big deal in terms of the fact that the Supreme Court has clearly indicated that, going forward, CMS is going to have to do notice-and-comment rulemaking for a much more expansive set of agency decisions than they thought and argued in this case that they would need to do,” Pfister adds.

Precisely how much of the routine work completed by HHS and CMS will be affected by this broader take on notice-and-comment rulemaking remains to be seen. While some stakeholders have raised concerns the added burden could stifle the government’s work, others contend any inconvenience imposed will be both manageable and beneficial.

In any case, the impact of Monday’s decision will flow along two distinct paths, affecting not only hospital finances but also, for better or worse, the way HHS and CMS operate.

What’s Next, Procedurally?

In 2016, nine hospitals led by Allina Health Services lost their case against HHS at the U.S. District Court in D.C., where a judge ruled that notice-and-comment rulemaking wasn’t required. In 2017, however, three judges at the D.C. Circuit Court of Appeals reversed the lower court’s decision and sent the dispute back for further proceedings.

In 2018, attorneys for HHS asked the Supreme Court to review the appellate decision. Now that the justices have affirmed the Circuit Court’s decision, the parties have up to seven days to file a status report at the District Court level on where the case stands, according to court records. That filing, expected by early next week, could shed light on where things are headed procedurally.

Pfister says she doesn’t think anyone knows for the time being whether the government will automatically revise DSH payments for the affected fiscal years, pursue another round of notice-and-comment rulemaking, or take some other course of action in response to the Supreme Court ruling.

And the parties themselves aren’t saying much. When asked about the agency’s plans, a CMS spokesperson told HealthLeaders on Wednesday that the agency is still reviewing the decision. Allina referred questions to its law firm, which declined to comment.

Beyond the nine plaintiff hospitals involved in this week’s Supreme Court decision, there are hundreds of plaintiffs suing HHS on similar grounds. Dozens of follow-on lawsuits have been consolidated into a single docket pending before U.S. District Judge Amy Berman Jackson. Parties to that proceeding have up to 14 days to file a status report in light of the Supreme Court’s decision, according to court records.

An Overly Burdensome Decision?

The government’s attorneys had issued dire warnings about the potential consequences of the decision the Supreme Court ultimately reached.

The notion that CMS must go through a notice-and-comment process for the sort of routine process at issue in this case could “substantially undermine effective administration of the Medicare program” because it would apply not just to DSH formula calculations but to “nearly every instruction” the agency gives to its contractors as well, U.S. Solicitor General Noel J. Francisco argued on HHS’ behalf.

Pfister largely rejects the government’s dire take on the decision’s impact.

“I think that might have been a little bit hyperbolic,” she says.

But other stakeholders outside the government have taken the Supreme Court’s ruling as a troubling sign of uncertainty to come.

“This is a frightening decision, that throws a lot of doubt on the validity of thousands of pages of Medicare sub-regulatory guidance,” Adam Finkelstein, JD, MPH, counsel with Manatt Health and a former health insurance specialist with the CMS Innovation Center, wrote in a tweet.

Stephanie A. Kennan, senior vice president of federal public affairs for McGuire Woods Consulting in Washington, D.C., tells HealthLeaders that she thinks the government’s argument “is somewhat overblown.” Officials should be able to manage any added burden from this ruling, even if it slows them down a bit, she says.

“I think it may mean they cannot move as quickly on some policies as they would like to,” Kennan says.

A Boon to Public Input?

The benefits of a more-transparent process justify any added hassle that may stem from having to go through a mandatory comment process more often as a result of this decision, Kennan says.

“In this case, they have to do 60-day comment periods, which can seem like an eternity if you want to keep the process moving, regardless of whether you’re the agency or a stakeholder,” she says. “The transparency is probably worth the 60 days.”

But others reject the notion that this decision should be seen as balancing effective governance with transparency.

“Allina isn’t a vindication of the importance of public participation in agency decision-making. It’s a testimonial to the heedlessness of lawyers who impose silly procedural rules on an administrative state they only dimly understand,” Nicholas Bagley, JD, a law professor at the University of Michigan who teaches on administrative law and health law, wrote in a series of tweets.

“Bear in mind,” he added, “that CMS is a tiny, beleaguered agency … To further encumber it will make Medicare more capricious, not less, as staffers tend to senseless procedures instead of doing their jobs.”

Moving forward, HHS and CMS will continue to have discretion to determine whether to go through notice-and-comment with a given action, Pfister says. The difference now, she says, is that there’s a stronger incentive for government officials to cover themselves; otherwise, another case like Allina’s could pull them into another round of prolonged litigation.