Administration and Leadership, AP News, Documentation & Patient Care Reporting, News

New Rules Would Require Disclosure of Health Care Prices

Above photo: National Highway Traffic Safety Administration

WASHINGTON (AP) — New rules from the Trump administration on Friday would require insurers and hospitals to disclose upfront the actual prices for common tests and procedures to promote competition and push down costs.

But the sweeping changes face stiff pushback from the health care industry. A coalition of major hospital groups quickly announced that hospitals will sue to block key provisions, which in any case don’t take effect immediately.

Even in an ideal world where information flows freely, patients and their families would have to deal with a learning curve to get comfortable with the byzantine world of health care billing. What sounds like the same procedure can have different billing codes depending on factors that may not be apparent to an untrained person.

Speaking at a White House event, President Donald Trump skipped over potential difficulties, at times making it sound like openness in health care is a done deal.

“After many, many years, we finally have transparency,” Trump said. “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.”

A final rule issued Friday would apply to hospitals and a proposed regulation would apply to insurance plans. Disclosure requirements for hospitals would not take effect until 2021; for insurers, the timing is unclear. The requirements do not directly affect doctors.

Officials say the rules would shine a spotlight on the confusing maze of health care prices, allowing informed patients to find quality services at the lowest cost. Prices for an MRI scan for example can vary by hundreds of dollars depending on where it’s 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.

Under the administration rules, insurers would have to provide patients with online access to individualized estimates, in advance, for what they would owe out-of-pocket for covered services. Most people now see such information after the fact, when their “explanation of benefits” form arrives in the mail.

Hospitals and insurers say the push for disclosure goes too far. They say the government would force them to publicly disclose rates they negotiate as part of private contracts that normally are beyond the purview of authorities.

“This rule will introduce widespread confusion, accelerate anticompetitive behavior among health insurers, and stymie innovations,” the American Hospital Association and three other major hospital groups said in a statement. “Our four organizations will soon join with member hospitals to file a legal challenge to the rule on 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. “Transparency should be achieved in a way that encourages — not undermines — competitive negotiations,” Matt Eyles, head of the industry trade group America’s Health Insurance Plans, said in a statement.

Azar dismissed such criticism. “Point me to one sector of the American economy where having price information in a competitive marketplace actually leads to higher prices,” he said.

With the hospital industry going to court, it could be a long time before the complex litigation is resolved and consumers might see changes.

For hospitals, the rule would require:

—publication in a consumer-friendly manner of negotiated rates for the 300 most common services that can be scheduled in advance, such as a knee replacement, a Cesarean-section delivery or an MRI scan. Hospitals would have to disclose what they’d be willing to accept if the patient pays cash. The information would be updated every year.

—publication of all their charges in a format that can be read on the internet by other computer systems. This would allow web developers and consumer groups to come up with tools that patients and their families can use.

For insurers, the rule would require:

—creating an online tool that policyholders can use to get a real-time personalized estimate of their out-of-pocket costs for all covered health care services and items, from hospitalization, to doctor visits, lab tests and medicines.

—disclosure on a public website of negotiated rates for their in-network providers, as well as the maximum amounts they would pay to an out-of-network doctor or hospital.

The disclosure requirements would carry out an executive order Trump signed this summer.