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November 21, 2019

Trump Administration Releases Far-Reaching Price Transparency Regs

If you didn’t know the Trump Administration was serious about promoting price transparency in health care, you do now! Last week, it issued two regs that will have major implications for hospitals, health plans, patients, and you as emergency physicians. During an announcement at the White House, President Trump said the goal of the regs is to “give patients the knowledge they need about the real price of healthcare services…so they can shop for the highest-quality care at the lowest cost.”

So, what’s in these monumental regs? One reg finalizes previously-proposed requirements for hospitals, and the other proposes new requirements for health plans.

With respect to the hospital price transparency reg, the administration is finalizing two new requirements that become effective in 2021. One of these requirements, which does not apply to emergency services, would require hospitals to post payer-specific negotiated rates for 300 “shoppable” services in a consumer-friendly way. As for the other requirement, hospitals must post available payer-specific negotiated rates for all services (including emergency services) in a “machine-readable format.” This means the information will most-likely only be used by researchers and other stakeholders who have the capability of analyzing thousands of lines of data. Hospitals will be required to post facility fees and the professional fees for physicians employed by the hospital. Thus, if you are employed by your hospital, it will be required to post rates for your services.

Also of note, CMS established an effective date of 2021 for this reg in order to provide enough time for hospitals to implement the new requirements. However, hospitals are attempting to block the reg from taking effect. Major hospital associations have indicated their intention to sue the administration, claiming the requirement to disclose payer-specific negotiated rates would add to confusion over prices, promote anti-competitive behavior, and stifle innovation.

Now let’s move on to the other major reg. The administration is proposing new requirements for most health plans (including self-insured plans) that are aimed at helping patients better understand the true cost of a service before they receive it. Specifically, the reg would require health plans to create an internet-based tool where patients could find out their cost-sharing responsibility for specific services, including in-network vs. out-of-network care. This tool would also let patients know where they stand in terms of meeting their deductible and out-of-pocket limit—information that is critical for patients to understand, especially for the millions of people with a high-deductible plan.

The reg also proposes to require health plans to disclose on a public website their negotiated rates for in-network “providers” and allowed amounts paid for out-of-network providers. As part of this requirement, the administration is considering requiring health plans to disclose the amounts out-of-network physicians and other practitioners charge for covered services.

Finally, the reg would allow health insurers to include policies in their plans that encourage consumers to shop for services from lower-cost, higher-value clinicians and share in the resulting savings with the plans.

While the proposals in this reg targeted at health plans seem beneficial to patients, ACEP is doing a deep dive to understand its full implications. One area of immediate concern is that the reg doesn’t mention how the proposed requirements would apply in emergencies situations or in other cases where patients receive unscheduled care. In fact, the only reference to emergencies in the entire reg is the following language around the proposed requirement for health plans to publicly post in-network and out-of-network rates: “While…consumers would benefit from the requirements of this proposal…utilizing the required information would not be appropriate or reasonable in an emergency situation.”

Comments on the health plan proposed reg are due on January 27, 2020, and we will keep you updated as we continue to dive into the details.

So, to wrap up, the administration is making its mark on price transparency by finalizing significant reporting requirements for hospitals and proposing new requirements for health plans. Going forward, it will be interesting to see whether these regs actually wind up improving price transparency in health care. Only time (and a lawsuit or two) will tell!

Until next week, this is Jeffrey saying, enjoy reading regs with your eggs!

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