White House seeks disclosure of actual health care prices

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.

Posted: Nov 15, 2019 1:48 PM

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 and a coalition of major hospital groups quickly announced that hospitals will sue to block the changes.

Even in an ideal world where information flows freely, patients and their families would have to deal with a learning curve to become comfortable with the intricacies of health care billing.

“This shadowy system has to change,” Health and Human Services Secretary Alex Azar said. “The patient has to be in control.”

A final rule 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.

Insurers would have to create individualized estimates of what patients would owe out-of-pocket due to deductibles and copayments.

Insurers and hospitals 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 normally 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.

Azar called such criticism “a canard,” saying transparency does not lead to higher prices in any other area of the economy.

With the 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 President Donald Trump signed this summer.

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