TRUMP SIGNS EXECUTIVE ORDER INTENDED TO CREATE MORE TRANSPARENCY IN HEALTHCARE PRICING

On June 24, 2019, President Trump signed an Executive Order designed to create more transparency in healthcare pricing.

The Executive Order requires the Secretary of Health and Human Services days to publish a proposed regulation within 60 days requiring hospitals “to publicly post standard charge information, based on negotiated rates…in an easy-to-understand, consumer friendly…format…that will meaningfully inform patients’ decision making and allow patients to compare prices across hospitals.”  The Executive Order also requires the Secretary of HHS to issue an advance notice of proposed rulemaking within 90 days “to require healthcare providers, health insurance issuers, and self-insured group health plans to provide or facilitate access to information about expected out-of-pocket costs for items and services to patients before they receive care.”

In comments issued before signing the Executive Order, President Trump said that the requirement that hospitals publish prices was expected to increase competition and reduce prices. 

Although many trade and consumer groups generally welcomed increased transparency, hospital associations and other groups warned that the measures prescribed in the Executive Order would actually have the opposite effect.  For example American Hospital Association President and CEO Rick Pollack said in a statement that the “AHA appreciates the Administration’s efforts to promote health care transparency on price and quality…but publically posting privately negotiated rates could, in fact, undermine the competitive forces of private market dynamics, and result in increased prices.”  Similarly, Federation of American Hospitals President and CEO Chip Kahn welcomed increased transparency, but warned “if implementing regulations take the wrong course, however it may undercut the way insurers pay for hospital services resulting in higher spending.”

The reason for these concerns is that if hospitals and other providers are required to publish their negotiated prices, all other providers will seek to be paid at the highest negotiated rate in their area.

In addition to the provisions on price transparency, the Executive Order required HHS to issue a report describing how the federal government and the private sector impede healthcare price and quality transparency; required HHS and other agencies to develop a “Health Quality Roadmap” to align reporting on data and quality measures across all federal healthcare programs; required HHS to increase access to de-identified claims data to researchers and entrepreneurs; required the Secretary of the Treasury to issue guidance expanding the ability of patients to select high-deductible health plans in conjunction with health savings accounts; and required HHS to submit a report on additional steps that could be taken to address “surprise” medical billing.  

The attorneys at Whatley Kallas, LLP will continue to follow the issues addressed in the Executive Order and to post articles about the proposed rules when they are published.

The Executive Order is linked here.  For Whatley Kallas, LLP’s earlier post discussing a Health Affairs article demonstrating that health insurance companies are often at fault for the “surprise” medical billing issue, click here.