US to force hospitals to reveal rates

Grant Boone
November 18, 2019

"I don't know if the hospitals are going to like me too much anymore with this", Trump said in a White House news conference Friday afternoon.

In hopes of bringing some transparency and openness to a pathologically opaque industry, one which many have blamed for being behind the explosion in U.S. underfunded liabilities to more than $100 trillion, administration officials said the final rule will compel hospitals in 2021 to publicize the rates they negotiate with individual insurers for all services, including drugs, supplies, facility fees and care by doctors who work for the facility.

In a new twist, the administration is also proposing to require most health plans that Americans get through their jobs to disclose the rates they negotiate with hospitals and doctors in their insurance networks, as well as the amounts they pay to doctors out-of-network.

Other moves the administration has taken to reshape the US health-care system have been challenged in court - and some have not fared well.

"We may face litigation, but we feel we are on a sound legal footing for what we are asking", Azar said, reported Kaiser Health News. "And within about 12 months I think it will be fully implemented, and we can even say probably a shorter period of time than that". Those requirements would take effect January 1, 2021.

The rule is the latest in a series of steps the administration has taken to show what Trump is doing to lower health care costs - a key concern among Americans and one of his main promises as he heads into the 2020 campaign.

For instance, the price for an MRI scan could vary by hundreds of dollars, depending on where the scan is done.

"American patients have been at the mercy of a shadowy system with little access to the information they need to make decisions about their own care", said Health and Human Services Secretary Alex Azar, pointing out that many hospital procedures are scheduled in advance, and that gives patients a chance to shop around. The second would require insurers to provide an online tool where people could compare their out-of-pocket costs with different medical providers beforehand. Most people now see such information after the fact, when their "explanation of benefits" form arrives in the mail. Insurers and hospitals say the government would force them to publicly disclose rates they negotiate and are considered part of private contracts.

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"This rule will introduce widespread confusion, accelerate anticompetitive behavior among health insurers and stymie innovations", according a joint statement from these groups, which made clear their intent to soon "file a legal challenge to the rule on the grounds including that it exceeds the administration's authority".

Insurers also contend the plan could backfire, prompting providers that are accepting a bargain price to try to bid up what they charge if others are getting more. America's Health Insurance Plans, an industry group, criticized the rules in a statement Friday and four major hospital organizations - the American Hospital Association (AHA), Association of American Medical Colleges (AAMC), Children's Hospital Association (CHA) and Federation of American Hospitals (FAH) - quickly promised to challenge the administration in court.

Azar dismissed such criticism. Another attempt to create transparency - a requirement that pharmaceutical companies disclose the list price of their drugs in their television ads - has been put on hold by the courts.

A hospital network with a monopoly in a particular city can fix higher prices than in cities where there is more competition.

The administration stressed, in a press release and on the call, that such information would have to be accessible, "updated machine-readable files" for ease of comparison.

- Publication of all their charges in a format that can be read on the internet by other computer systems.

Levitt added that the proposal requiring insurers to disclose how much their enrollees would owe for medical services may be much more meaningful to patients.

June 24, 2019: President Donald Trump issues executive order to direct federal agencies to push for greater price transparency among providers and insurers.

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