FinancialHospitals

Trump transparency order puts ‘shoppable’ healthcare in HHS hands

June 25, 2019 / Susannah Luthi and Tara Bannow

Hospital and insurer trade groups have allied to bash President Donald Trump’s latest executive order on rate disclosures.

The groups and consumer advocates are closely watching how far HHS will decide to go with its price transparency requirements, since the order itself left the details vague. In the executive order signed Monday, Trump gave the agency 60 days to write the hospital requirements on publishing “standard charge information, including charges and information based on negotiated rates and for common or shoppable items.”

“We’ll know a lot more in 60 days, but it certainly sounds a lot less expansive than they were making it out to be,” said Loren Adler, associate director of the USC-Brookings Schaeffer Initiative for Health Policy.

Trump issued a general mandate for insurers and hospitals to disclose rates they have negotiated for “shoppable” services. These are common procedures and treatments that are widely available from hospitals and doctors. The intent of this rule is to give patients the chance to compare costs “before making informed choices based on price and quality.”

That’s vague enough to give HHS plenty of room to add its own interpretations, Adler said. He read the order as requiring insurers and hospitals to disclose only average prices, or a range of prices, rather than specific rates negotiated by individual insurance companies.

A source familiar with discussions around the executive order said that the final version was watered down from what was originally expected, and that HHS Secretary Alex Azar wanted to mollify industry—a characterization HHS denied.

Still, major trade groups showed they hope for a light touch.

“Publicly posting privately negotiated rates could, in fact, undermine the competitive forces of private market dynamics, and result in increased prices,” said Rick Pollack, CEO of the American Hospital Association.

Both the Blue Cross and Blue Shield Association and America’s Health Insurance Plans echoed Pollack’s views.

“We need to ensure consumers have information that is relevant to their decision-making, while ensuring disclosure of information does not raise costs or jeopardize the privacy and security of consumers’ personal health information,” said Justine Handelman, a senior vice president at the Blue Cross and Blue Shield Association.

The similar positions from hospital and insurance groups, which have conflicting interests on the matter of costs, have raised some eyebrows.

“It’s inconsistent that they read it the same way and oppose the rule coming to same conclusion,” said Shawn Gremminger of the consumer advocacy group Families USA.

Gremminger, like other consumer advocates, is hoping the regulations will lead to aggressive transparency reforms, but conceded that rules coming out of executive orders are much weaker than the original mandate.

“The threat of watering down is a real one, but not unique to this administration,” he said. “We will be pushing hard to make sure this has teeth.”

On the hospital side, Mayo Clinic Chief Financial Officer Dennis Dahlen said he hasn’t figured out what precisely will shift on the business or patient side. He noted that like other hospitals, Mayo Clinic already offers a cost estimator tool for patients. Mayo’s has drawn praise from CMS Administrator Seema Verma.

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Chris J. Stewart

Chris currently serves as Chief Operating Officer at Ortho Spine Partners. Prior to that, he was the assistant vice president and business unit leader of Medical Device Management for HealthTrust.

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