Trump administration would force hospitals to disclose secret prices

Trump administration would force hospitals to disclose secret prices
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The Trump administration wants to force hospitals to disclose to patients how much they charge for all supplies, tests and procedures.

A new proposal released Monday aims to make it easier for patients to shop around for the best price by forcing hospitals to disclose what are often secret rates negotiated with insurance companies. 

Under the policy, hospitals would be required to post online all charges for all items and services provided by the hospital beginning Jan. 1, 2020. 

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The proposal would impact more than 6,000 hospitals across the country that accept Medicare. Comments on the proposal are due Sept. 27. 

Hospitals that fail to disclose that information could be fined, but the fines would be limited to only $300 a day. 

Hospitals are already required to publicly post their list prices for services, but in a call with reporters, Centers for Medicare and Medicaid Services Administrator Seema Verma said the proposal would expand that requirement to include gross charges before discounts as well as the insurer-specific negotiated charges for all items and services. 

The charges would be linked to the name of the insurance company and the insurance plan, Verma said.

The proposed rule implements an executive order signed by President TrumpDonald John TrumpO'Rourke: Trump driving global, U.S. economy into recession Manchin: Trump has 'golden opportunity' on gun reforms Objections to Trump's new immigration rule wildly exaggerated MORE earlier this year and is a key piece of the administration’s plan to force more price transparency from health providers and drug companies. 

If patients know the costs of health care services upfront, the White House argues, it could help prevent surprise medical bills, which are increasingly becoming a source of anxiety for Americans.

The administration is relying on consumer-friendly issues to position the president as a populist champion of transparency and reduced medical bills ahead of the 2020 election.

“This proposal is now the most significant step any President has ever taken to deliver transparency and put patients in control of their care,” Health and Human Services Secretary Alex Azar said in a statement. 

“All Americans have the right to know the price of their healthcare up front,” Verma said in a statement. “This rule will finally expose hospital pricing practices, let hospitals compete on price and is a first step toward ending surprise billing practices.”

The administration is also proposing to make public payer-specific negotiated charges for a limited set of 300 “shoppable” services that patients can schedule with a hospital in advance, such as an MRI, lab test or a hip replacement. 

“When [patients] start to see the amount of variation in prices, that will encourage more shopping of services,” Verma said. 

Different hospitals charge widely different amounts for the same services in part because of contracted discounts with insurers. Similar to prescription drugs, the patients who are usually subject to the full list price are the ones without insurance or who have high-deductible health plans.

The changes are likely to face significant pushback from the hospital and insurance industries, which started fighting the administration in June when Trump first signed the executive order on price transparency. 

“Multiple experts ... agree that disclosing privately negotiated rates will make it harder to bargain for lower rates, creating a floor – not a ceiling – for the prices that hospitals would be willing to accept. Publicly disclosing competitively negotiated, proprietary rates will push prices and premiums higher —not lower— for consumers, patients, and taxpayers," Matt Eyles, CEO of America's Health Insurance Plans, said in a statement Monday. 

The country's largest hospital group, the American Hospital Association (AHA), also slammed the proposal.

"While we support transparency, today’s proposal misses the mark, exceeds the Administration’s legal authority and should be abandoned," AHA President and CEO Rick Pollack said in a statement, noting the plan could "seriously limit the choices available to patients" and "fuel anticompetitive behavior among commercial health insurers."

Verma told reporters the administration is not afraid of the onslaught of negative press from insurers and providers, although previous controversial transparency proposals on prescription drugs have been pulled in the face of intensive industry pressure.