Blog | Transparency

Possible compromise in hospital price disclosure fight

Blog | Transparency

Possible compromise in hospital price disclosure fight

  • While the administration prevailed in the first round of the lawsuit challenging its price transparency policy, the AHA has indicated it will appeal the ruling.
  • It’s uncertain how the court will rule on appeal, however the Trump administration has already come up with a compromise in the legal battle over its signature push to shine a light on hospital pricing, and it’s buried in a similar proposal for insurers, industry groups say, according to a June 11 Bloomberg Law article.
  • This provision could give a federal district judge in the District of Columbia a way to rule narrowly in favor of four healthcare industry groups and three hospitals in their fight to dismantle a rule that requires some 6,000 hospitals to publicly list the prices they negotiate with insurers by January 2021, according to the same article.

A federal judge in Washington, D.C., on Tuesday dismissed the AHA's legal challenge to the Centers for Medicare & Medicaid Services' final rule mandating that hospitals disclose their privately negotiated charges with commercial health insurers. It is anticipated the AHA will file an appeal on an expedited basis.

While it’s uncertain how the appeals court will rule, in thinking about an endgame, a recent Bloomberg Law article observes, “The Trump administration has already come up with a compromise in the legal battle over its signature push to shine a light on hospital pricing, and it’s buried in a similar proposal for insurers, industry groups say. The provision they’ve zeroed in on could give a federal district judge in the District of Columbia a way to rule narrowly in favor of four health-care industry groups and three hospitals in their fight to dismantle a rule that requires some 6,000 hospitals to publicly list the prices they negotiate with insurers by January 2021. It could also give hospitals an end run around a major policy initiative of the Trump administration that’s aimed at lowering health-care costs, one legal scholar said. When the Centers for Medicare & Medicaid Services finalized the price transparency rule for hospitals, it proposed a similar rule that requires health insurance companies to tell participants, beneficiaries, and enrollees who ask how much they’re going to have to pay out of pocket for health services. That breakdown would include the insurer’s negotiated rate with the hospital, but only if it’s relevant to how much the participant has to pay, the proposed rule says."

Takeaway

If the appeals court crafted a narrow ruling like what is described above it would be a reasonable compromise. Such a ruling would provide consumers who want to shop the meaningful information that they need and care about while protecting proprietary prices, which are negotiated between health plans and hospitals.

The solution is, for the most part, aligned with HFMA’s Price Transparency Taskforce recommendations. The taskforce believes that health plans are in the best position to help their members find out the total estimated price of the service. They should help members estimate their expected out-of-pocket costs, based on their current deductible status along with copayment and coinsurance information. Further, plans should be the primary purveyor of this information to their members as they often have access to price information for many providers in a given region, which they can use to help members factor price into their decision-making process – in essence allowing members to shop for non-emergent services without having visit multiple hospital websites.

For uninsured individuals, our taskforce believes that hospitals should serve as the resource for price estimates. They are well positioned to help uninsured patients identify alternatives for sharing their healthcare costs, including insurance options they may not be aware of. Further, hospitals should proactively communicate to all patients and community members —  including the uninsured — that they may be eligible for financial assistance provided directly by the hospital. This financial assistance could mean that care is available for free or at a discount. Taking insurance eligibility and financial assistance into account, hospitals should offer uninsured people clear information on how to receive price estimates.

Not only is this a logical compromise, but it’s more consumer friendly than the policies currently pursued by the administration. Unfortunately, the administration is doubling down on its current approach. Beyond proposing that hospitals report median rates by MS-DRG for Medicare Advantage and commercial payers as part of the cost report in the 2021 proposed IPPS rule, we’re hearing rumors the administration is encouraging Congress to include language in the next COVID-19 provider relief bill that would mandate the price transparency provisions finalized in last fall’s rule. Lending credence to this, former special assistant to President Trump at the National Economic Council Brian Blase — who is credited by many as the architect of the President’s transparency policies – advocates for Congress to include a price transparency provision in his most recent Health Affairs blog.

About the Author

Chad Mulvany, FHFMA,

is director, healthcare finance policy, strategy and development, HFMA’s Washington, D.C., office.

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