Trump admin floats publicizing provider-payer negotiated rates
The Trump administration is considering publicizing the negotiated rates payers make with providers for healthcare services, drugs and medical devices, according to a request for comment tucked in the middle of a 700-page ONC interoperability rule released last month.
The request could lead to subsequent HHS rulemaking to mandate price information transparency to help consumers make decisions between hospitals, doctors and other sites of care. It would also eviscerate traditional industry control of price negotiations.
The American Hospital Association pushed back, arguing it could limit choices in the private market. "Price is not the only factor that patients weigh when deciding where to receive care. Physician recommendation, quality and location play a significant role," the group said.
These prices have always been hidden from patients, and releasing them to the public would be a big move. Contracts between payers and health systems usually stop either party from disclosing ‘confidential’ prices for medical services negotiated between the two. The Wall Street Journal first reported the proposal.
HHS is "considering subsequent rulemaking to expand access to price information for the public, prospective patients, plan sponsors, and health care providers," the HHS rule reads. But major roadblocks such as the need for congressional action and court battles would likely get in the way of such mandated disclosure, several analysts noted.
"The lobby groups for the hospitals (AHA, FAH) and physicians (AMA) are powerful, especially given the large employment bases that these groups represent, and will likely be effective in impairing any efforts in Congress to mandate price transparency," Jefferies wrote in an investor note.
The AHA said the approach "misses the mark," and sought to push the onus on insurers.
"What patients really want to know is what their out of pocket costs will be. Insurers are the only ones that have this information. Insurers need to make this information available to hospitals so they can share it with their patients," it said in a statement.
CMS took a small step toward more price transparency last year when it issued a final rule requiring hospitals to post standard charges online in a machine-readable format. Hospitals were already required to make this information public, however, just not necessarily online.
And since the rule went into effect at the beginning of this year, some hospitals have been criticized for lackluster adherence. CMS Administrator Seema Verma has acknowledged the agency has no way to fully enforce the requirements, but launched a Twitter campaign to call out spotty compliance with the hashtag #WheresThePrice.
Larry Levitt, senior vice president of the Kaiser Family Foundation, said on Twitter requiring disclosure of actual prices would "bring light into this black box," but it’s unclear what the long-term repercussions would be.
There is an enormous level of secrecy surrounding the prices we pay for health care, including hospitals and prescription drugs. Requiring the disclosure of actual hospital prices would bring light into this black box. Whether it would lead to lower prices overall is less clear. https://t.co/xlLULhyzZt— Larry Levitt (@larry_levitt) March 7, 2019
Unlike posting of the online chargemasters, where CMS has no way to ensure compliance, the administration could potentially levy financial penalties on any companies that don’t play ball under the new ONC data-blocking provisions.
An HHS representative was noncommittal about the likelihood this results in any concrete rulemaking, saying "it's a request for information included in the proposed rule. We are interested in seeing what comments and information is submitted."
The comment period closes May 3.
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