WASHINGTON -- The Trump administration's recent efforts to make hospital prices more transparent are leaving hospitals and insurers cold.
"We share the Administration's commitment to empowering patients with better information about the costs of their care and lowering costs," Matt Eyles, president and CEO of America's Health Insurance Plans, a trade group for health insurers, said in a statement Monday. "However, multiple experts, including the Federal Trade Commission, 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."
The administration's proposal, released Monday in a , calls for each hospital operating within the U.S. "to establish (and update) and make public a yearly list of the hospital's standard charges for items and services provided by the hospital, including for diagnosis-related groups (DRGs)," according to a from the Centers for Medicare & Medicaid Services (CMS). In addition, the rule would require that hospitals make public their payer-specific negotiated charges for 300 services that are "shoppable" -- that is, services that patients can arrange for in advance. Of those services, 70 would be chosen by CMS and the other 230 would be picked by the hospital.
The list of 300 services would also have to include charges for services the hospital provides in conjunction with the primary service being listed, and all the charges would have to be displayed on a publicly available webpage that is searchable and is updated at least annually, CMS said.
The proposed rule comes about a month after President Trump requiring Health and Human Services Secretary Alex Azar to "propose a regulation, consistent with applicable law, to require hospitals to publicly post standard charge information, including charges and information based on negotiated rates and for common or shoppable items and services, in an easy-to-understand, consumer-friendly, and machine-readable format using consensus-based data standards that will meaningfully inform patients' decision making and allow patients to compare prices across hospitals."
Like the insurers, hospital groups also panned the proposal. "Hospitals and health systems want to ensure that patients have access to information they need to choose their health care, including their out-of-pocket obligations," began a joint statement from the American Hospital Association, America's Essential Hospitals, the Association of American Medical Colleges, the Children's Hospital Association, and the Federation of American Hospitals. "This rule, however, is a misguided attempt to improve price transparency for patients because it fails to give them the information they need. Disclosing the negotiated rate between insurers and hospitals will not help patients make decisions about their care. Instead, this disclosure could harm patients by reducing patient access to care. This is the wrong approach to price transparency, and the administration should reverse course on this provision."
The Medical Group Management Association, a trade organization for medical practices, was a little bit more cautious. "It's not clear if the administration has considered the full ramifications of interfering in provider payer contracts in the name of price transparency. Price transparency is a real concern in the U.S., but more often than not it's the insurance companies holding all the cards in provider negotiations," said Anders Gilberg, the association's senior vice president of government affairs, in an email to 鶹ý.
"We will examine these proposals, so they don't simply result in a massive government intervention in favor of insurance companies in the guise of patient-friendly public policy. The unintended consequences of the federal government overstepping into private sector negotiations could drive a new wave of provider consolidation that will have the exact opposite of the intended impact on healthcare costs."
Bob Laszewski, founder and president of Health Policy and Strategy Associates, a healthcare consulting firm in Alexandria, Virginia, said in an email that the proposed rule reminded him "of the administration's recent abandonment of their proposed regulations to get rid of drug rebates after a number of third-party reports that said doing so would actually increase costs. It is just as possible that the conclusions here could actually lead to higher prices as the most powerful buyers of health care services would no longer be able to get their deep discounts," because hospitals won't want to anger one payer by giving another payer a bigger discount.
"When everybody gets the 'best deal,' then everybody will only be getting the average discount," Laszewski said.
Not everyone was a critic, however. "This step by the administration to help patients know better what they are paying for health care services is complementary to several provisions in the Alexander-Murray Lower Health Care Costs Act of 2019 that was approved by a vote of 20-3 by the Senate health committee last month," said Sen. Lamar Alexander (R-Tenn.), chairman of the Senate Health, Education, Labor & Pensions (HELP) Committee, in a statement. "We will carefully review how the proposed rule and our legislation interact."
Ted Okon, executive director of the Community Oncology Alliance, which represents office-based oncologists, also praised the proposal. "There's so much opaqueness when you look at hospitals and pricing and 'chargemasters' [the hospital's official price list], versus what deals are really negotiated," he said in a phone interview. "Trying to create more transparency, especially on those types of procedures that a patient can look at and say, 'Instead of getting a [CT] scan here, if I get it over here in this practice I'm going to pay less' -- I think that's appropriate."