Payers, employers protest price transparency rule as wrong-headed

By | February 1, 2020

Dive Brief:

  • The nation’s health insurance lobby pushed back against the Trump administration’s attempt to wrangle insurers into a broader effort to force the secret, negotiated rates with hospitals out into the open, according to comments submitted to the federal government on the proposed rule. 
  • Employer groups also expressed skepticism, worried the disclosure will clash with existing price transparency tools that are tailored to their specific employee population. Others are urging the administration should couple pricing transparency with quality data. 
  • Hospitals, which are opposing a parallel effort on prices, weighed in with their own opposition.

Dive Insight:

The Trump administration has tried to inject transparency into America’s notoriously opaque healthcare system, particularly when it comes to prices, drawing strong rebuke from within the industry.

The administration first targeted hospitals in forcing them to post the secret negotiated rates with insurers. Then in a subsequent proposed rule it roped in insurers, requiring similar pricing disclosures from them. 

The proposed rule targeting insurers generated 23,355 public comments, which were due Thursday.

The aim of the proposed rule is to give patients more information so they can choose lower-cost options and ultimately tamp down on healthcare spending. While that may be a noble goal, some caution that it requires a more nuanced approach, noting the need to couple the pricing data with quality metrics.

“A service offered at a low price is not a bargain when quality is poor; indeed poor quality can increase costs substantially,” said Leah Binder, CEO of the Leapfrog Group, an organization founded by healthcare purchasers that publishes hospital performance data.

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The Business Group on Health is worried about the practical implications if the proposed rule eventually becomes law. 

The group is concerned it will “result in a tool that provides cost information that conflicts with information from existing price transparency tools that are tailored to a specific employer population and its needs — thereby causing confusion for employees.”

BGH, which represents 441 large employers providing coverage to 55 million Americans, also expressed worry about whether the effort will provide meaningful information to patients in alternative payment arrangements instead of those based on a fee for every service provided.

The insurer lobby argued the rule will fail to meaningfully help consumers, called it overly broad and outside the government’s authority to implement.  

“It will undermine competitive negotiations and push health care prices higher — not lower — for patients, consumers, and taxpayers,” payer lobby America’s Health Insurance Plans said in its comments submitted to regulators. 

Along with AHIP, the Association for Community Affiliated Plans, which represents 67 nonprofit and community based health plans, echoed a similar sentiment about supporting overall transparency aims but disagreeing with the proposed policy. 

“ACAP members are concerned that the provisions in the rule will not achieve our mutual goals to reduce health care costs and engage consumers yet will necessitate administrative investments that burden our organizations,” ACAP said in comments it submitted to regulators. 

The American Hospital Association, which is suing the administration over pricing disclosures, said the policy misses the mark.

“That is because the information that is most meaningful to patients is their specific out-of-pocket costs for specific procedures,” AHA said in its comments.

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This is not the administration’s first foray into requiring greater transparency in healthcare. The administration first required hospitals to post chargemaster prices to its website for a number of services, though critics argued the figures were useless for patients who rarely pay those list prices as they are a starting price for negotiations between insurers and hospitals. 

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