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President Trump signs executive order requiring hospitals and insurers to reveal their negotiated prices

American Hospital Association, America's Health Insurance Plans say order will raise prices.

Susan Morse, Senior Editor

President Trump on Monday signed an executive order mandating hospitals to give patients prices for services based on their negotiated rates with insurers.

Provider and payer groups came out against the order, saying it could have the effect of raising prices.

"Publicly posting privately negotiated rates could, in fact, undermine the competitive forces of private market dynamics, and result in increased prices," said American Hospital Association President and CEO Rick Pollack.

Matt Eyles, president and CEO of America's Health Insurance Plans, said, "Publicly disclosing competitively negotiated, proprietary rates will reduce competition and push prices higher - not lower - for consumers, patients and taxpayers."

AARP said it supported the president's efforts to create transparency and lower healthcare costs.

IMPACT

President Trump said he was signing the order to create price transparency, which will lower prices and create more competition.

Hospitals are already required, as of January 1, to post their chargemaster prices online. But providers have said these prices do not determine what the patient can expect to pay, as that is based on the patient's insurance coverage and the contracted price negotiated between provider and payer.

The order goes a step further from the chargemaster mandate, in requiring transparency for these negotiated rates.

REACTION

American Hospital Association President and CEO Rick Pollack said, "At the same time, consumers base their healthcare decisions not only on cost and quality but also on recommendations from their physicians, availability of specialized services and reputation, among others. Moreover, consumers say they are most interested in what their out-of-pocket costs for care will be, what is covered by their health plan, which providers are in their networks and what their health plan's cost-sharing obligations are in terms of their deductible and coinsurance."

Matt Eyles, president and CEO of America's Health Insurance Plans said,
"Competition experts, including the bipartisan Federal Trade Commission, agree that disclosing privately negotiated rates will reduce incentives to offer lower rates, creating a floor – not a ceiling – for the prices that hospitals would be willing to accept.

"Requiring price disclosure for thousands of hospital items, services and procedures perpetuates the old days of the American healthcare system paying for volume over value," Eyles said. "We know that is a formula for higher costs and worse care for everyone. We should be accelerating our efforts to pay for healthcare based on value and quality."

AARP Executive Vice President and Chief Advocacy and Engagement Officer Nancy LeaMond said, "AARP has been calling for policies that create greater transparency as one of several measures needed to help lower prescription drug and other healthcare prices. We stand with the president, Congress, and the states as they work to lower healthcare costs – especially high drug prices, which disproportionately hurt older Americans."

THE ORDER

The order instructs the Department of Health and Human Services to issue a proposed regulation within 60 days requiring 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."

In addition, the executive order requires HHS and the departments of the Treasury and Labor to issue within 90 days an advance notice of proposed rulemaking soliciting feedback on a proposal to require providers, insurers and self-insured group health plans to "provide or facilitate access to information about expected out-of-pocket costs for items and services to patients before they receive care."

The order also instructs HHS and the departments of Veterans Affairs and Defense to create within 180 days a roadmap to align quality metrics across federal healthcare programs.

It instructs federal agencies to expand access for researchers to de-identified healthcare claims data from federal programs and directs the Department of the Treasury to issue guidance to expand the availability of health savings accounts to pay for more healthcare services.
 
TREND

The cost of healthcare is an election issue heading into 2020.

Legislative committees have tackled healthcare costs.

The Senate HELP committee recently released the Lower Health Care Costs Act.  The Senate Finance Committee grilled both pharmaceutical executives and pharmacy benefit managers.

President Trump on Monday outlined steps taken by his administration, such as: allowing association health plans, short term plans and health reimbursement arrangements; working with Congress to stop surprise medical billing; expanding access to tax free savings accounts; allowing for faster approval time for drugs to help the terminally ill through Right to Try; and the end of the individual mandate.

In May, the Trump administration released a blueprint to lower drug prices and recently required pharmaceutical companies to disclose the list price for prescription drugs in TV ads.

ON THE RECORD

"For decades powerful insurance companies, lobbyists and special interests have denied the public access to the real cost of the healthcare services they provide. It's that simple," Trump said. "This lack of price transparency has enriched industry giants greatly, costing Americans hundreds of billions of dollars a year."

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com