President Donald Trump signed his highly anticipated executive order on hospital and insurer price transparency Monday afternoon, but the language leaves wiggle-room for the agencies to decide what insurers and hospitals will have to disclose.
A senior administration official told reporters Monday morning that the CMS will decide via rulemaking whether hospitals and insurers will need to publish individual rates or whether they can keep their pricing information more general and publish only aggregate rates.
"For too long, powerful interests have blocked patients from knowing the true price and quality of healthcare, denying them the information they need to make informed choices," the White House said in a press release.
Administration officials did not confirm when the rulemaking will take place, saying only that they will use "any and all regulatory vehicles" that can carry out its directives. That may include using the next outpatient hospital payment proposed rule, expected by late July.
HHS Secretary Alex Azar said the executive order would launch "what will go down as one of the most significant steps" in U.S. healthcare reform.
"What we're announcing today will put American patients in control, and address fundamental drivers of high healthcare costs," Azar said.
Yet the order does not go as far as originally expected, sources familiar with talks told Modern Healthcare.
One source familiar with the discussions said Azar and White House officials clashed over the level of detail hospitals and insurers should have to disclose about their negotiated rates. The White House wanted the language to be much more specific than the final result while Azar wanted to mitigate industry opposition.
Another source who has seen the executive order said the language leaves it up to HHS to decide whether insurers and hospitals would need to disclose average commercial rates or a range of rates.
An HHS representative described the characterization of discussions as false.
"At the direction of President Trump, Secretary Azar has been a champion of delivering transparency for American patients," the spokesperson said. "The information we're sharing today describe the outcomes we intend to deliver. The regulatory process will determine the details of how we achieve these outcomes."
Hospitals and insurers have lobbied hard in Washington against the mounting pressure to disclose what they say are proprietary contract negotiations.
One senior administration on Monday morning dismissed in part the industry argument about proprietary information, noting that the explanation of benefits from insurers that follows a hospital or doctor visit in effect discloses the same information, only after the fact.
"You have a right to know that information before you get a service," the official said.
The language of the executive order isn't public yet, but Azar laid out the five policies it's set to address in a Monday call with reporters.
HHS will need to issue the rule on hospital price disclosures, mandating that they disclose in an easy-to-read format the prices "to reflect what insurers and patients actually pay."
HHS would also, though rulemaking, require providers and insurers to tell patients their out-of-pocket costs before they go in for care. This is similar to a proposal from Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.), who introduced a sweeping package of healthcare reforms last week.
Per the executive order, the agencies would also need to propose a way to consolidate quality measures across all healthcare programs to simplify how it's done, and store de-identified healthcare claims data so researchers and others can analyze it to make improvements to the system.
Lastly, the Treasury Department is tasked with expanding uses for health savings accounts.
In the wake of the executive order, hospital and insurance groups warily weighed in.
"We appreciate the administration's executive order where it will meet consumer transparency needs," Federation of American Hospitals CEO Chip Kahn said. "If implementing regulations take the wrong course, however, it may undercut the way insurers pay for hospital services resulting in higher spending."
Kahn also flagged a past statement from the Federal Trade Commission that said spending "would likely increase if hospital-insurer payment arrangements were published."
The insurance trade group America's Health Insurance Plans framed any mandate on individual price disclosures as a boost to the fee-for-service system that the government and healthcare experts want to get away from.
"Requiring price disclosure for thousands of hospital items, services and procedures perpetuates the old days of the American healthcare system paying for volume over value," AHIP CEO Matt Eyles said in a statement. "We know that is a formula for higher costs and worse care for everyone. We should be accelerating our efforts to pay for healthcare based on value and quality."
Ceci Connolly, CEO of the Alliance of Community Health Plans, said her group cautioned "that one size does not fill all for transparency policies."
"Pricing information is most helpful when tied to an individual's circumstances, such as benefits, deductibles and copays," she said. "ACHP member plans are already significantly investing in and providing relevant, personalized price transparency beneficiary tools."
Meanwhile, hospitals and insurers are also fighting transparency measures on the legislative front this week, as the Senate health committee gears up for a Wednesday vote on the package from Alexander and Murray.
With the vote imminent, hospitals continue to urge the committee to remove certain hospital-insurer contract reforms, as illustrated in a Friday letter to the panel from the American Hospital Association Executive Vice President Tom Nickels.
In the letter, Nickels urged committee leaders to rethink their proposed requirement on hospitals to send their patients upfront estimates of their out-of-pocket costs.
"There are many services for which the services needed can change over the course of care, depending on how a particular patient responds to a treatment and the evolution of their disease or injury," Nickels wrote. "Therefore, it is not always possible to provide estimates."
