Hospitals and insurers insist they support healthcare price transparency—just not to the extent the Trump administration envisions.
A CMS proposed rule to force employer health plans and insurance companies to post in-network and out-of-network rates they negotiate with providers would confuse patients and do little to lower costs, insurer and hospital groups argued in comments published this week.
The proposal, which would also require insurers to develop online price transparency tools to give patients cost-sharing information, would hamper competition and lead to higher premiums, they said. Moreover, they claimed it would also violate the Constitution.
"Forced disclosure of privately and competitively negotiated rates, as proposed in this rule, will not provide information that is actionable by, or helpful to, consumers and exceeds the departments' statutory authority," insurer lobbying group America's Health Insurance Plans said in a written comment to the CMS.
The industry's objections to the proposed rule, "Transparency in Coverage," are similar to those of a complementary rule that forces hospitals to publicly publish the rates they negotiate with payers for specific health care services.
The administration finalized that rule in November despite the backlash and hospitals responded by suing the HHS. Undeterred, the CMS pitched similar requirements for insurance companies, aiming to empower customers with price information that is often hard to come by.
Unanimously, insurer and hospital groups said in their comments that they support arming patients with cost and quality information to help them make smarter decisions. But they argued that patients want personalized information about their out-of-pocket costs and not negotiated rates.
"We have long supported efforts to make quality and pricing information more accessible, understandable and actionable for consumers. But they need real-time, patient-specific information tied to individual coverage benefits — not a massive published list of prices that may only frustrate consumers and likely increase costs over time," wrote the Alliance of Community Health Plans, which represents regional, often provider-owned plans.
Some urged the government to limit the requirements of the transparency tool to cost-sharing information for a set of common, "shoppable" services.
"The proposed rule would require health plans to provide information on all covered items and services. No existing transparency technology solution we are aware of supports this level of information — nor would they want to, since much of the required information could confuse and mislead consumers and the costs to implement would be enormous," the Blue Cross and Blue Shield Association wrote.
A study by the economic consultant Bates White, commissioned by AHIP and the Blues Association, found that complying with the rule would cost insurers $13.6 million each — more than 26 times what the CMS estimated.
The cost is a heavy lift for some insurers, said the Association for Community Affiliated Plans, which represents safety net plans.
"Many ACAP plans with predominantly Medicaid populations are critical providers of marketplace coverage but lack the scale to make these investments without significant administrative burden," the group said.
Several healthcare industry stakeholders said they worried that publishing negotiating rates would cause healthcare costs to soar as hospitals with lower reimbursement demanded higher rates to match their competitors.
"If providers know the contractual arrangements health plans make with competitors, they need not bid lower, or have an incentive to prove themselves the higher quality clinicians," the ACHP said.
Most industry commenters questioned the CMS' authority to force disclosure of what they called "trade secrets."
"The proposed disclosure requirement does not further the statutory objective of promoting transparency in coverage," the American Hospital Association wrote. "The departments, therefore, lack the legal authority to compel the public disclosure of such highly sensitive and confidential pricing information."
Employers also found issue with the rule. The Business Group on Health, representing large U.S. employers that offer health benefits to their workers, asked the administration to avoid requiring employers to develop their own cost-estimate tools, as many are already available from insurers. In its comment, the Blues Association said 94% of health plans already offer price transparency tools.
The Business Group on Health also worried such tools would focus on the fee-for-service billing system when employers have adopted value-based payment arrangements, and urged the administration to consider the need for more data on healthcare quality.
The American Benefits Council, which supported the proposed requirement for cost-estimate tools, urged the administration to provide a safe harbor for employers to guard against increased litigation.
"The council is deeply concerned that even with good faith efforts, plans may be unable to obtain some of the information needed to complete the required disclosures," it wrote. "The council strongly urges that final regulations include a safe harbor to address this issue."
Still, even as the industry panned the proposed rule, a slew of anonymous comments cheered it.
"I expect the same right to options and prices that I have in other consumer-based purchases," read one. "I got extremely frustrated with my recent surgery—not because of a surgical problem, but rather no information given on costs prior to it taking place … This is a crazy system and it would never fly in any other business model."
Correction: This story initially attributed quotes to incorrect organizations. It has been updated to correctly attribute the quotes to the Alliance of Community Health Plans and the Association for Community Affiliated Plans.
