Blog | Transparency

Executive orders on price transparency

Blog | Transparency

Executive orders on price transparency

HFMA’s Chad Mulvany provides insight on the Trump Administration’s June 24 executive order aimed at improving price and quality transparency.

  • On Monday, the Trump Administration released its long-anticipated executive order aimed at improving price and quality transparency.
  •  Within 60 days, HHS is instructed to publish a rule requiring hospitals to publicly post information based on negotiated rates and for common or shoppable items and services.
  • Within 90 days, the departments of HHS, Labor and Treasury are instructed to issue an advance notice of proposed rulemaking requiring healthcare providers, health-insurance issuers and self-insured group health plans to provide or facilitate access to information about expected out-of-pocket costs for items or services to patients before they receive care.

On Monday, the Trump Administration released its long-anticipated executive order aimed at improving price and quality transparency and empowering patients to make better decisions about where to receive care. Among other things, the executive order requires various cabinet secretaries to draft proposed rules (or advanced notices of proposed rulemaking) that will:

  1. Provide Price Data for Shoppable Hospital Services: Within 60 days, the U.S. Department of Health and Human Services (HHS) is instructed to publish a rule requiring hospitals to publicly post information based on negotiated rates and for common or shoppable items and services, in an easy-to-understand, machine-readable format. It also requires the posting of standard charge information for services, supplies or fees billed by the hospital or provided by employees of the hospital. The executive order instructs HHS to establish a monitoring mechanism to “ensure compliance” with the posting requirements.

    Commentary
    : The wording of this section is worth noting given that it specifies “information based on negotiated rates.” That may indicate the proposed rule will, instead of posting the negotiated rate, use some type of “amounts generally negotiated” (an average payment rate) concept or relative grouping based on price (some plans use a number of stars) to indicate affordability.

    Further, when describing what hospitals must post, it uses “negotiated rates.” However, when discussing requirements for items provided by employees of the hospital (physicians and clinicians), it refers to “charge information…or fees bill.” This is pure speculation, but by specifically not stating rates for hospital employees, the requirement may only be limited to professional charges.

    Other key things to watch include how broadly HHS defines “shoppable services” and the contexts in which any requirement applies to employed physicians and clinicians.

  2. Out-of-Pocket Cost Estimates: Within 90 days, the departments of HHS, Labor and Treasury are instructed to issue an advance notice of proposed rulemaking requiring healthcare providers, health-insurance issuers and self-insured group health plans to provide or facilitate access to information about expected out-of-pocket costs for items or services to patients before they receive care.

    Commentary
    : While the devil is clearly in the detail, HFMA has long been a strong advocate of providing out-of-pocket estimates for services coupled with quality data to help patients and beneficiaries make a value-based decision about where to receive care for elective services. Its “Price Transparency in Health Care Taskforce Report,” the product of a cross-industry workgroup that included organizations representing health plans, hospitals, physicians and patients, defines roles and responsibilities for all stakeholders to help provide patients with the necessary data to make an informed-care decision.

    It will also be crucial that price estimates be communicated to patients in a compassionate, effective manner. HFMA’s Patient Financial Communications Taskforce’s best practices provide guidance in how to engage patients in the emergency department (ED), at the time of service  outside of the ED and in advance of service.

  3. Surprise Bills: Despite various bills working their way through Congress to address surprise bills the executive order requires HHS to submit a report to the president within 180 days defining additional steps the administration may take to implement its principles on surprise bills.  

  4. Finally, there are several additional items in the executive order that are not covered in this post. Members are encouraged to read it.

Takeaway

The executive order leaves considerable discretion to the agencies to develop the Administration’s policies. This should be viewed as a positive given the widely reported rumors that Secretary Alex Azar is less supportive of full disclosure of negotiated rates than the White House Health Policy staff.

HFMA will provide its members with summaries of the proposed and final rules as they are published and will be providing HHS with detailed comments. We would encourage members to comment on the rule as well.

About the Author

Chad Mulvany, FHFMA,

is director, healthcare finance policy, strategy and development, HFMA’s Washington, D.C., office, and a member of HFMA’s Virginia-Washington, D.C., Chapter.

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