Nation/World

New Trump administration rule will make more health care rates public

WASHINGTON - The Trump administration on Friday issued controversial rules compelling hospitals and insurers to give consumers more information upfront about what their care will cost - requirements that officials say help Americans be better health-care shoppers.

Under one rule resisted for months by a broad swath of the health-care industry, hospitals must for the first time reveal in a consumer-friendly format the discounted rates they negotiate privately with insurers for a list of 300 services patients can schedule in advance, including X-rays and cesarean deliveries. The requirement takes effect in January 2021.

In 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.

Taken together, the pair of actions - one a final rule, the other in draft form - is part of President Donald Trump's 2020 electoral strategy to win favor with voters eager to choose more affordable health care.

The president is trying to capitalize on polling that shows health care ranks among Americans' leading domestic concerns, with consumers looking to government especially to ease the burden of escalating out-of-pocket costs.

The hospital industry has vowed for months to sue to try to block the requirements on them and administration officials sought preemptively to tarnish such opposition.

"Make no mistake about it, this rule today will irritate many vested interests in Washington, D.C.," Joe Grogan, director of the White House's domestic policy council, told reporters on a morning conference call.

ADVERTISEMENT

Health and Human Services Secretary Alex Azar called the rules "perhaps the most transformative shift to patient-controlled health care that any president" has undertaken. Consumers are now "at the mercy of a shadowy system" of pricing that "has to change," he said.

Other moves the administration has taken to reshape the U.S. health-care system have been challenged in court - and some have not fared well. Earlier this year, a Washington, D.C.-based federal judge ruled the administration did not have the authority to compel the drug industry to disclose drug prices in television advertisements

And the administration withdrew a major effort it had made to rein in drug prices by prohibiting rebates to insurance middlemen following criticism it could actually increase Medicare premiums before next year's election.

The issue of transparency in health-care pricing has been a drumbeat for the White House and Trump's top health advisers for much of this year. In May, administration officials made clear they were developing an executive order on the issue. In late June, the president held a signing ceremony in the White House's grand foyer to affix his signature to that order.

"We are fundamentally changing the nature of the health-care marketplace," Trump declared that day. "This is a truly big action. People have no idea how big it is. Some people say bigger than health care itself."

That executive order directed HHS and two other federal agencies to develop far-reaching regulations, the most controversial part of which is the disclosure of negotiated rates that always have been secret. Friday's pair of rules flow from that order.

The final hospital-rate rule requires the disclosure of all standard charges, which include the amount a hospital is willing to accept in cash from patients, as well as the negotiated rates. All the information must be included in a computerized data file listed by diagnostic codes. The 300 services that the administration is classifying as "shopping" must also be accessible in a format easy for consumers to read.

Months before the specifics materialized, the hospital and insurance industries have railed against the policy. A coalition of hospitals has vowed to sue in federal court to try to block the requirements, which they contend go beyond the executive branch's authority, violate the First Amendment and improperly compel the revelation of trade secrets.

Hospitals and insurers contend that disclosing their negotiations would be counterproductive and predict it would have the perverse effect of driving up prices.

Among a raft of negative comments submitted to health officials as part of the rulemaking process, America's Health Insurance Plans - the industry's main trade group - wrote that "forced disclosure of privately and competitively-negotiated rates … will not provide information that is actionable by, or helpful to, consumers. It will hamper competitive negotiations and push health care prices higher - not lower - for patients, consumers, and taxpayers."

During the reporters' briefing, Azar called such predictions "a canard."

He said the administration has not attempted to estimate the potential savings from requiring rate disclosures because "we've never experienced this level of transparency before." But he gave an anecdotal example, saying MRI prices decreased by about 20% in New Hampshire after more public information about their costs was provided.

Officials said that hospitals will be required to update their consumer-friendly list of rates for 300 services, as well as a computer data file for all services, at least every year. Asked how much the disclosure requirements are likely to cost hospitals, Seema Verma, administrator of HHS’ Centers for Medicare and Medicaid Services, said, “it’s a very tiny percentage of their overall revenue, less than 1%.”

ADVERTISEMENT