WASHINGTON -- For decades, hospitals, insurers, and other special interests have intentionally hidden their prices in order to drive up costs, argued President Trump in announcing the release of two new regulations aimed at increasing price transparency, on Friday.
"We're stopping American patients from getting ripped off, because they've been ripped off for years," said Trump during a press conference Friday afternoon.
The new rules would also help reduce overall costs to the healthcare system, he said.
In June, President Trump signed an executive order pledging to make healthcare prices more transparent.
The core purpose of the two regulations, developed in response to the president's executive order, is to give patients the information they need to make more informed healthcare decisions, Trump said.
"They'll be able to check 'em, compare 'em, go to different locations. So, they can shop for the highest quality care at the lowest cost," he said.
The publicly online -- "everything from individual medical supplies to the total cost of common procedures," Trump said.
He cited research suggesting that hospitals have charged patients anywhere from $248 to $2,500 for the same MRI at the same hospital.
And the , would require health insurers to reveal their pricing information.
"This will allow you to see your out-of-pocket costs and other vital price information before you go in for treatment," he said.
The president said the changes would give American families more freedom over their healthcare decisions and would also force companies to compete for patients' business.
The rules were developed by the Department of Health and Human Services (HHS), the Department of Labor, and the Department of the Treasury. The hospital price transparency rule, which is final, is not slated to take effect until Jan. 1, 2021. HHS officials said they delayed the start of the rule to give hospitals more time to prepare for its implementation.
For the second proposed rule, health insurers and other stakeholders will have 60 days to provide comment.
In a press call Friday morning, HHS Secretary Alex Azar said the changes being announced would give patients more control over their healthcare.
"Right now our system is not delivering the information patients need. President Trump is going to change that in what will be a transformative shift toward patient control of our healthcare system," he said.
He noted that 70% of healthcare services are in fact "shoppable."
Under the hospital-focused rule, the most common of these shoppable services, the information would need to be available in an "easily accessible patient-friendly format."
"For all procedures," however, Azar stressed that the information would need to be available online in a "machine-readable format."
Centers for Medicare & Medicaid Services administrator Seema Verma pointed out that the information the rules are requiring to be made public is already available to patients in their "explanation of benefits."
"We're simply requiring that it be made available before they get their care instead of after," she said.
The final rule on hospital price transparency would take the following actions, as outlined in :
- Clarify the definitions for the terms "hospital," "standard charges," and "items and services"
- Make clear the requirements for making public a "machine-readable file" (to include gross charges, discounted cash prices, payer-specific negotiated charges, and de-identified maximum and minimum negotiated charges)
- Establish the criteria required for making public the cash prices, payer-specific negotiated charges, and the minimum and maximum de-identified charges for 300 or more "shoppable services"
- Track hospital compliance and explain enforcement measures for noncompliance to include "civil monetary penalties"
Under the second rule, most group health plans would be required to give patients real-time information including the estimated out-of-pocket costs for "all covered health care items and services" using online tools that the health plans and insurers would be required to furnish, and to give the same information in paper form, when requested, noted a .
Such information would allow patients to weigh the costs of different providers before making a decision about their care.
In addition, the proposed rule would require plans to share negotiated rates for in-network providers and historically "allowed amounts paid" for those providers who are out-of-network.
The administration stressed, in a press release and on the call, that such information would have to be accessible, "updated machine-readable files" for ease of comparison.
The proposed rule also invites health insurers to develop plans that would incentivize patients to choose services from lower-cost, higher-value providers, allowing patients to share in the savings garnered from those decisions and rewarding insurers by freeing them from paying medical loss ratio rebates, because such a plan design provides benefits that aren't currently defined in the medical loss ratio program.
Asked on the press call whether the administration expected hospitals, which have criticized the rule, to sue the administration, Azar said he believed the administration was on "sound legal footing."
Asked whether the new regulations eliminated the need for legislation on "surprise billing" -- often expensive medical bills charged to patients by out-of-network providers -- administration officials said they did not think so.
Joe Grogan, assistant to the president, said the administration has been in "fruitful discussion" with the House and the Senate.
The administration invited stakeholder feedback regarding how to incorporate healthcare quality information into the price transparency proposals and whether health plans, in addition to providing information on out-of-pocket costs through internet-based tools, should also require insurers to make such information available through a standards-based application programming interface, which would make it easier for external software developers to develop applications that would leverage such information.
In a press statement, Matt Eyles, president and CEO of America's Health Insurance Plans (AHIP), suggested that the new rules would not lower patient and consumer costs.
"Transparency should aid and support patient decision-making, should not undermine competitive negotiations that lower patients' health care costs, and should put downward pressure on premiums for consumers and employers," he said. "Health insurance providers unequivocally want to empower patients and consumers with health care cost and quality information that is simple, clear, and personally relevant. That is why health insurance providers encourage all of their consumers to use the secure, personalized cost estimator tools they provide today."
Eyles said that AHIP would work in collaboration with the Administration and other healthcare groups to find ways to achieve lower healthcare costs.