Under the Trump administration’s new hospital price transparency rules, which was released Nov. 15, hospitals will have to make public the often secret rates they negotiate with insurance companies for all services, drugs, and supplies they provide to patients.
Starting Jan. 1, 2020, hospitals will be required to make public how much they charge for all items and services they provide. Hospitals that fail to disclose the information could face a $300 per day fine. The new rule would affect all hospitals across the country that accept Medicare.
The new rules also require hospitals to make public payer-specific negotiated charges, described in “plain language,” for 300 common “shoppable” services that patients can schedule in advance, such as x-rays, imaging, and laboratory tests.
The Trump administration states that exposing hospital pricing practices will force hospitals to compete on pricing in order to attract patients, eventually leading to a decrease in medical service prices.
“Kept secret, these prices are simply dollar amounts on a ledger; disclosed, they deliver fuel to the engines of competition among hospitals and insurers,” said Seema Verma, administrator of the Centers for Medicare & Medicaid Services. “This final rule and the proposed rule will bring forward the transparency we need to finally begin reducing the overall healthcare costs.”
The new rule was crafted based on an executive order signed by President Donald Trump in June. The executive order immediately drew sharp opposition from major health care providers, who argued that increased transparency could actually overwhelm patients with data and drive up prices. They vowed to push back the proposed regulations with lawsuits.
In fact, 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 anti-competitive behavior among health insurers and stymie innovations,” reads a joint statement signed by the American Hospital Association, the Association of American Medical Colleges, the Children’s Hospital Association, and the Federation of American Hospitals. “Our four organizations will soon join with member hospitals to file a legal challenge to the rule on grounds including that it exceeds the Administration’s authority.”
Nonetheless, Health and Human Services Secretary Alex Azar told the press that the administration is confident in overcoming any legal challenges.
“We may face litigation, but we feel we are on sound legal footing for what we are asking,” Azar said, reported Kaiser Health News. “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.”