- Trump administration officials put forward two rules on Friday to compel release of secret negotiated rates and other pricing information in one proposed and one final rule, building on an executive order released this summer. President Donald Trump will formally announce the details later this afternoon.
- The administration had previously proposed plans to force only hospitals to reveal that information. This goes one step further and requires the same information of insurers, CMS Administrator Seema Verma said Friday.
- The administration contends it has the authority to force the secret price negotiations for services out into the open. "We're on very sound legal footing," HHS Secretary Alex Azar said of the rules and possible litigation from industry.
The hospital and payer lobbies are sure to fight back against what would be a landmark shift in healthcare. Industry has argued the rule exceeds the government's authority and would actually increase prices.
The administration pushed back on the idea that forcing the release of negotiated rates would actually cause prices to rise.
"American patients have been at the mercy of a shadowy system with little access to the information they need to make decisions about their own care," HHS Secretary Alex Azar told reporters Friday.
The new proposed rule centers on insurers and would require them to publicly share negotiated rates for in-network providers and allowed amounts paid for out-of-network services. The proposed rule also requires insurers to make available, in real-time, personalized information to a member on what a service would cost them, taking into account where they are in their deductible. In other words, it allows patients accurate estimates on procedures before they're performed and allows patients to shop more effectively, according to the administration.
The administration is encouraging payers to craft plan designs that would encourage consumers to utilize the cost information and shop for lower-cost services. The administration said this could benefit insurers' medical loss ratio calculations.
Verma disputed the argument that negotiated rates are proprietary business information. She noted this information is already provided to patients in the 'explanation of benefits' but that document needs to come before a procedure, not after.
"Patients need to have the right information at the right time and at the right place," Verma said.
Patient advocacy groups came out in support of the proposal Friday. "Real price transparency and open competition will allow patient choice creating a functional healthcare marketplace," Cynthia Fisher, founder of Patient Rights Advocate, said in a statement praising the regulatory action, calling it a "momentous day" for consumers.
Releasing the information will also benefit researchers, employers and developers who may build new tools to help consumers, the administration said.
The final rule focuses on the hospital portion, which was previously proposed (then delayed) from the outpatient payment rule, which has since been finalized. Starting in 2021, hospitals would be required to release negotiated rates in a machine-readable format with accompanying CPT codes, while making a second version that's more consumer-friendly and includes data for 300 "shoppable" services, like X-rays and imaging and lab tests.
Hospitals would be required to share a slew of pricing information, including "gross charges, payer-specific negotiated charges, the amount the hospital is willing to accept in cash from a patient, and the minimum and maximum negotiated charges."
Trump is expected to formally announce the transparency plans at 2 p.m. Friday.