Healthcare price transparency legislation hits a roadblock in the Senate

Despite widespread, bipartisan support, legislation expanding price transparency remains in limbo in the Senate as Congress considers healthcare policies for inclusion in a year-end package.

The Senate seemed on track to pass the Patients Deserve Price Tags Act (S. 2355) on an accelerated basis Sept. 24. But Sen. Rand Paul (R-Ky.) blocked a motion that was required to expedite the vote, saying the bill would add burden to healthcare providers without meaningfully improving affordability.

Paul said any effort at price transparency likely will struggle to gain traction among healthcare consumers.

“Patients in general ignore prices,” he said on the Senate floor. “Why? Because they’re disconnected from the price. Someone else pays the bill.”

Among uninsured Americans who seek healthcare, “Transparency might make a difference, but it actually already does,” Paul said. “If you have to pay cash, everybody knows the price.”

Layering transparency on top of such a system “just adds one more government mandate, and it’s not a good idea,” Paul said.

Countered Sen. Roger Marshall (R-Kan.), who is a sponsor of Patients Deserve Price Tags, “My colleague says this won’t work, but transparency works in every other industry.”

Regarding the role of insurers as middlemen who pay for care, Marshall said widely documented divergence in negotiated rates makes transparency even more urgent.

“The patient deserves to see what that negotiated rate is, and then they can compare it,” said Marshall, who authored the bill with Sen. John Hickenlooper (D-Colo.).

Paul was the lone dissenting vote when the Senate Health, Labor, Education and Pensions (HELP) Committee advanced the bill by a 21-1 tally in July. His preferred approach is to tackle healthcare prices via legislation that would change ERISA law to allow for association health plans.

What the Senate price transparency bill would require

When compared with current price transparency regulations, Patients Deserve Price Tags would require hospitals and other healthcare providers to provide more specific costs upfront and itemized charges after care. Upfront disclosures would include negotiated rates, discounted cash prices and facility fees.

Provisions also would extend price transparency requirements to healthcare venues such as labs, imaging facilities and ambulatory surgical centers, allowing for price comparisons across settings.

Proponents of the bill say existing transparency rules have uneven compliance, along with enforcement loopholes. The pending bill includes penalties of up to $5 million for entities that fail to provide the required information, and noncompliant hospitals would face restrictions on debt collection activities.

The bill also has provisions for employers to see their healthcare pricing data and related contract methodologies, and for ownership disclosures that could shine a light on the impact of vertical integration (e.g., if an insurance company owns subsidiaries that provide care).

Especially in the hands of employers, transparency can drive cost reduction, said Sen. Bill Cassidy (R-La.), chair of the HELP Committee, who is trying to get the bill passed before he departs Congress at the end of the year.

“That transparency will allow, in a very powerful way, those large employers to push prices down,” Cassidy said at a news conference July 22.

Marshall said the average family would be projected to save $1,000 a month in healthcare costs.

“Our bill forces transparency. It forces competition,” he said at the news conference.

Regulatory efforts and presidential executive orders on transparency have not had the necessary impact, Cassidy added.

How two leading price transparency bills differ

While Paul blocked the expedited path for passage in the Senate, the bill’s authors can still bring it for a vote through the regular legislative process. If at least 60 senators support the measure, it can avoid a filibuster.

Even if the Senate passes Patients Deserve Price Tags, work will remain to get it through Congress. That’s in part because the House has its own bill, the Lower Costs, More Transparency Act (H.R. 9393), which advanced out of committee by a 45-0 vote. The two bills have many substantive differences, meaning the provisions would have to be reconciled unless one side chooses to yield to the other’s bill.

“In both [chambers], from across the political spectrum in both parties, we have people advocating for this,” Cassidy said in July. “So I’m very optimistic that it will pass.”

Of the two bills, posted prices are required to be more precise in the Senate’s bill, Cassidy said. Patients Deserve Price Tags would ban price-estimator tools as a transparency compliance measure, instead mandating disclosure of actual rates.

“Put simply, we require the actual price to be shown, not just how you get there — but, in the Senate bill, this is how much you pay,” Cassidy said.

Patients Deserve Price Tags also would require the issuance of advanced explanations of benefits to patients prior to a service, along with itemized billing post-service. Patients would be held harmless if the final bill exceeds the initial quote by a certain amount (the amount is not specified in the legislation).

Why hospitals are raising concerns about the Senate bill

All told, leaders of the Senate version think their bill is more robust, whereas the House bill is more of a codification of the status quo under current price transparency regulations.

“Our version is more comprehensive. Period. End of story,” Cassidy said.

For some healthcare stakeholders, that makes Patients Deserve Price Tags more concerning.

The American Hospital Association (AHA) sent a comment letter to Cassidy and Sen. Bernie Sanders (I-Vt.), ranking member of the HELP Committee, which drafted the bill. Among various issues cited in the comments were concerns over reporting burden, enforcement mechanisms, and holding providers responsible for preservice estimates.

The AHA is more supportive of Lower Costs, More Transparency, including because the bill allows for continued use of price-estimator tools as a way to fulfill the transparency requirements around shoppable services. In the prior Congress, the House passed a bill by the same name but did not include authorization of such tools.