Trump rules hospital must provide price transparency

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Trump rules hospital must provide price transparency

Post by PainRack » 2019-11-18 11:09pm

https://khn.org/news/white-house-unveils-finalized-health-care-price-transparency-rule/



White House Unveils Finalized Health Care Price Transparency Rule

Hospitals will soon have to share price information they have long kept obscured — including how big a discount they offer cash-paying patients and rates negotiated with insurers — under a rule finalized Friday by the Trump administration.

In a companion proposal, the administration announced it is also planning to require health insurers to spell out beforehand for all services just how much patients may owe in out-of-pocket costs. That measure is now open for public comment.

“What is more clear and sensible than Americans knowing what their care is going to cost before going to the doctor?” said Joe Grogan, director of the White House Domestic Policy Council.

The hospital rule is slated to go into effect in January 2021. It is part of an effort by the Trump administration to increase price transparency in hopes of lowering health care costs on everything from hospital services to prescription drugs. But it is controversial and likely to face court challenges.



When that rule was first proposed in July, hospitals and insurers objected. They argued it would require them to disclose propriety information, could hamper negotiations and could backfire if some medical providers see they are underpriced compared with peers and raise their charges.

Shortly after the final rule’s release, four major hospital organizations said they would challenge it in court.

“This rule will introduce widespread confusion, accelerate anticompetitive behavior among health insurers and stymie innovations,” according a joint statement from these groups, which made clear their intent to soon “file a legal challenge to the rule on the grounds including that it exceeds the administration’s authority.” The statement was signed by the American Hospital Association, the Association of American Medical Colleges, the Children’s Hospital Association and the Federation of American Hospitals.

Insurers also pushed back. “The rules the administration released today will not help consumers better understand what health services will cost them and may not advance the broader goal of lowering health care costs,” said Scott Serota, president and CEO of the Blue Cross Blue Shield Association, in a statement.

Requiring disclosure of negotiated rates, he said, could lead to price increases “as clinicians and medical facilities could see in the negotiated payments a roadmap to bidding up prices rather than lowering rates.” The rule, he added, could confuse consumers.

It’s also a potentially crushing amount of data for a consumer to consider. However, the administration said it hopes the data will also spur researchers, employers or entrepreneurs to find additional ways of making the data accessible and useful.

The amount of information the rule requires to be disclosed will be massive — including gross charges, negotiated rates and cash prices — for every one of the thousands of services offered by every hospital, which they will be required to update annually.

In a nod to how hard it might be for a consumer to add up items from such an a la carte list of prices, the rule also requires each hospital to include a list of 300 “shoppable” services, described in plain language, with all the ancillary costs included. So, in effect, a patient could look up the total cost of a knee replacement, hernia repair or other treatment.

Insurers, under the proposed rule, would have to disclose the rates they negotiate with providers like hospitals. They would also be required to create online tools to calculate for individual consumers the amount of their estimated out-of-pocket costs for all services, including any deductible they may owe, and make that information available before the consumer heads to the hospital or doctor.

It would go into effect one year after it is finalized, although it is not known when that will occur.

Although consumer advocates say price information can help patients shop for lower-cost services, they also note that few consumers do, even when provided such information.

Earlier this year, the administration ordered drugmakers to include their prices in advertisements, but the industry sued and won a court ruling blocking the measure. The administration has appealed that ruling.

Nonetheless, Health and Human Services Secretary Alex Azar said the administration is confident.

“We may face litigation, but we feel we are on sound legal footing for what we are asking,” Azar said. “We hope hospitals respect patients’ right to know the prices of services and we’d hate to see them take a page out of Big Pharma’s playbook and oppose transparency.”

He and other officials on a call with reporters admitted they don’t have any estimates on how much the proposal would save in lowered costs because such a broad effort has never been tried in the U.S. before.

Still, “point me to one sector of the American economy where having pricing information actually leads to higher prices,” said Azar.

Azar cited some studies that show that when prices are disclosed, overall spending can go down because patients choose cheaper services. However, such efforts also generally require financial incentives for the patient, such as sharing in the cost savings.

The proposed rule for insurers urges them to create such incentives, said Seema Verma, who oversees the federal government’s Center for Medicare & Medicaid Services.

George Nation, a business professor at Lehigh University in Pennsylvania who studies hospital pricing, called the final rule and the insurer proposal “exactly a move in the right direction.”

Among other things, he said, the price information may prove useful to employers comparing whether their insurer or administrator is doing a good job in bargaining with local providers.

Today, “they just see a bill and a discount. But is it a good discount? This will now all be transparent,” said Nation.


Article by



https://khn.org/news/author/julie-appleby/

Article posted with citation to author as per KFF policy.



TLDR: Azfar wants hospital to provide the bills for major items, such as single scans and allied health services, as well as come up with a list of shoppables, where services bills like a knee replacement would be available.





On ONE hand, this isn't bad



The problem however is applying it to the US healthcare system. As detailed in the article, inverse incentives means prices may rise. the sheer confusion amongst having to track itemised bills means patients are also not likely to do price comparison.



Azfar brings up MRI and the seminal example is LASIK surgery where competition and price comparison works.



However, those are single item bills. Azar mentions that he's unable to provide any cost saving estimates because nothing like this has been tried in America before. He's right.

Singapore did something similar though



https://www.moh.gov.sg/cost-financing/fee-benchmarks-and-bill-amount-information



Instead of listing each item prize, although fee benchmarks exists and price comparison is potentially possible, what we did was collate ALL the bills and then post median size figures.



So, you know the median price for each hospital and how they compare.



However. There is .minimal evidence to suggest that price comparison happens in Singapore. Rather, other factors such as convienence, reputation is a larger factor.
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Re: Trump rules hospital must provide price transparency

Post by bilateralrope » 2019-11-18 11:28pm

I need an app to see which petrol stations are cheapest along my commute, and they have a big sign announcing the current price to anyone driving past. The typical consumer doesn't have a chance of being able to figure out which hospital is cheapest for whatever treatment they need.

Now insurance companies might be able to use this data to negotiate better prices for themselves, by dropping hospitals other than whoever is cheapest in the area. Getting them to pass those savings on is going to be the difficulty.

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Re: Trump rules hospital must provide price transparency

Post by Lost Soal » 2019-11-19 04:23am

What use is seeing a cheaper hospital when your insurance company says its not in network and they will not pay for anything.
Also:
“This rule will introduce widespread confusion, accelerate anticompetitive behavior among health insurers and stymie innovations,”
There it is. Every industry which says some new rule or regulation will stifle innovation, almost without exception, means they won't be able to gouge customers for as much money as before.
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Re: Trump rules hospital must provide price transparency

Post by PainRack » 2019-11-19 04:40am

bilateralrope wrote:
2019-11-18 11:28pm
I need an app to see which petrol stations are cheapest along my commute, and they have a big sign announcing the current price to anyone driving past. The typical consumer doesn't have a chance of being able to figure out which hospital is cheapest for whatever treatment they need.

Now insurance companies might be able to use this data to negotiate better prices for themselves, by dropping hospitals other than whoever is cheapest in the area. Getting them to pass those savings on is going to be the difficulty.
One other example shared was how other providers would jack up their prices when seeing how much others are getting.

Essemtially, Aetna would ask why am i paying more than Cross for example, so, the hospital judt jacks up both prices.

Consumwr wise ? Its not "impossible" but once you calculate in network va out of network insurance, the premiums difference between Aetna which cover hospital A and Cross which cover B, you need to be promoted to an economics prof for your sheer genius.
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Re: Trump rules hospital must provide price transparency

Post by aerius » 2019-11-19 10:46am

Did anyone dig into the proposal and find the fun stuff? Cause there's a hell of a nice gem in there.
https://www.hhs.gov/sites/default/files/cms-1717-f2.pdf

Let's go to page 249
CMS-1717-F2249
4. Civil Monetary Penalties

We proposed that we may impose a CMP on a hospital that we identify as noncompliant with the requirements of proposed 45 CFR part 180, and that fails to respond to CMS’ request to submit a CAP or comply with the requirements of a CAP as we describe earlier.We proposed that we may impose a CMP upon a hospital for a violation of each requirement of proposed 45 CFR part 180. The maximum daily dollar amount for a CMP to which a hospital may be subject would be $300. We proposed that even if a hospital is in violation of multiple discrete requirements of proposed 45 CFR part 180, the maximum total sum that a single hospital may be assessed per day is $300.
That'll show them! $300 a day for as many violations as they want. It'll literally cost hospitals more to comply with the regulations than it would to just eat the fines. Guess what's gonna happen?
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Re: Trump rules hospital must provide price transparency

Post by PainRack » 2019-11-19 09:39pm

aerius wrote:
2019-11-19 10:46am
Did anyone dig into the proposal and find the fun stuff? Cause there's a hell of a nice gem in there.
https://www.hhs.gov/sites/default/files/cms-1717-f2.pdf

Let's go to page 249
CMS-1717-F2249
4. Civil Monetary Penalties

We proposed that we may impose a CMP on a hospital that we identify as noncompliant with the requirements of proposed 45 CFR part 180, and that fails to respond to CMS’ request to submit a CAP or comply with the requirements of a CAP as we describe earlier.We proposed that we may impose a CMP upon a hospital for a violation of each requirement of proposed 45 CFR part 180. The maximum daily dollar amount for a CMP to which a hospital may be subject would be $300. We proposed that even if a hospital is in violation of multiple discrete requirements of proposed 45 CFR part 180, the maximum total sum that a single hospital may be assessed per day is $300.
That'll show them! $300 a day for as many violations as they want. It'll literally cost hospitals more to comply with the regulations than it would to just eat the fines. Guess what's gonna happen?
Oh yes. Its mentioned by Vox that hospitals might just verg well eat the daily fine rather than work through it.

Its why this propoaal is deemed political theatre.


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Re: Trump rules hospital must provide price transparency

Post by madd0ct0r » 2019-11-22 03:22pm

is it easier to increase the fine then get a entire bill added?
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Re: Trump rules hospital must provide price transparency

Post by Steel » 2019-11-22 05:41pm

madd0ct0r wrote:
2019-11-22 03:22pm
is it easier to increase the fine then get a entire bill added?
I mean, if they have made specific provisions in the bill that they deliberately won't fine multiple infractions more harshly than a single infraction, and the fine amount is absurdly low, that should tell you their appetite to increase the fines.

Additionally, I would guess that unless the bill explicitly says that the fine levels are at the discretion of some other body then it would require a change of legislation to increase them (or to give that power to some other body). This may be easier to pass than the original legislation, but if the whole reason for passing this bill was to appear to have done something without actually doing anything, then giving it teeth would run into just as much republican opposition as an actual solution.
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Re: Trump rules hospital must provide price transparency

Post by PainRack » 2019-11-25 07:00pm

I need to make a correction. The changes come online in 2021, not 2020
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