Regulatory efforts to help consumers know the cost of their health care up front may be a lasting legacy of the Trump administration.
The Health and Human Services Department Thursday finalized the second of two rules that force hospitals and insurers to publicly disclose the prices they privately negotiate. The regulations have broad support among patient rights advocates and employers, signaling there’s a chance they could stick around regardless of who wins the presidential election and as long as courts continue to uphold them.
It would be tremendously foolish to reverse a rule that the majority of Americans want, said Cynthia Fisher, founder and chairman of PatientRightsAdvocate.org, a nonprofit that’s fighting for transparency in health-care pricing.
“We’re going to be able as the American consumers to know what we’re going to get for the first time in advance of getting care and at what price,” she said. “We have the power now in the coming year to be in charge of our own health decisions, saving and spending.”
PatientRightsAdocates.org developed a poll with former House Speaker Newt Gingrich’s (R) consulting firm, Gingrich 360, that found 87% of Americans believe insurers, hospitals, and doctors should disclose all of their prices, including the prices providers negotiate with health plans, in an easily accessible place online.
Under the pricing rule finalized Thursday, insurers have to make both their in-network negotiated rates with health-care providers and allowable out-of-network rates available to the public. The Trump administration’s goal in issuing this rule and a similar rule for hospitals that’s set to take effect Jan.1 is to create greater openness and transparency in the U.S. health-care system, and in the process drive down the cost of care.
The insurance rule overlaps to some degree with the hospital transparency rule, but “What we’re doing today is more expansive, and it really does cover the entire health-care industry, not just hospitals,” Centers for Medicare & Medicaid Services Administrator Seema Verma said in a press call Thursday.
There’s a chance the rules could be durable, said Nicole Huberfeld, a professor at Boston University School of Law and School of Public Health.
“The Affordable Care Act makes it so insurers are supposed to be more transparent about how they set their pricing,” she said. “This is one of the ironies of the rule. It’s one of the few parts of the ACA this administration is attempting to implement.”
The regulations come while the Justice Department and a group of Republican states are asking the U.S. Supreme Court to strike down the ACA as unconstitutional. If the administration is successful, the rules will fall with the law.
If the Supreme Court says the ACA can survive, the rules will live on with it, and a “Biden administration plans to not only keep the ACA but shore it up,” Huberfeld said.
Whether support for the regulations would carry over to a new administration depends largely “on how willing they are to sort of stick their finger in the eye of insurance and health care,” said George Nation, a professor of law and business at Lehigh University’s College of Business. “Those are two big lobbies, especially the hospitals, and they’re really not caring for this.”
The American Hospital Association led an industry group challenge to the hospital pricing rule, arguing the administration unlawfully expanded the definition of “standard charges” that a hospital must disclose under the ACA to include negotiated rates. However, a federal district court judge in the District of Columbia upheld the rule.
The case has been appealed to the U.S. Court of Appeals for the District of Columbia Circuit.
Insurers See a Flawed Rule
Groups that represent the insurance industry haven’t said if they will challenge the pricing rule for insurers. America’s Health Insurance Plans (AHIP) called the rule a flawed attempt to make health care more affordable.
“Disclosing privately negotiated rates will reduce incentives to offer lower rates, creating a floor—not a ceiling—for the prices that drug makers, providers, and device makers would be willing to accept,” Matt Eyles, AHIP’s president and CEO, said in a statement.
The Blue Cross Blue Shield Association (BCBSA) said the rule will have the unintended consequences of confusing consumers and increasing prices—something no one wants, the group said.
“Making negotiated rates public will not provide consumers with the clear, easily understandable information that they are looking for,” Justine Handelman, senior vice president of the Office of Policy and Representation for the BCBSA, said in a statement.
Praise From Employer Groups
However, employer groups have generally praised the regulation for providing information that helps employers design health plans that steer workers to higher-value, lower-cost providers.
But employers have to act on the information, said Bill Kramer, executive director for health policy with the Pacific Business Group on Health, which represents 41 companies that spend about $100 billion a year covering approximately 15 million people.
“Contracting with those high-performing providers, and providing incentives for patients to use those high-performing providers, is a way to drive improved quality and lower prices,” he said.
Mark Wilson, vice president of health and employment policy for the HR Policy Association, warned employers may bear much of the cost of implementing the insurance pricing rule. His organization represents more than 380 of the country’s largest employers.
Insurers and plan administrators will charge employers for the cost of compiling the information, but setting up the databases will be a one-time cost, he said.
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