The White House's newest requirement for hospitals to publicly report billing quality metrics was inspired by Johns Hopkins University researchers who received funding from billionaire philanthropists looking to influence healthcare policy.
The billing quality measures were announced in an executive order President Donald Trump signed on Sept. 24. Dr. Marty Makary, a Johns Hopkins professor, laid out similar metrics in academic literature that were designed to help foster accountability for some hospitals' predatory billing practices.
"I think this is a big deal," Makary said. "Most hospitals perform well, and should be rewarded."
Makary's research was funded by Arnold Ventures, a philanthropic entity founded by billionaire couple Laura and John Arnold to affect evidence-based change in several policy areas including healthcare.
Arnold Ventures Executive Vice President of Health Care Mark Miller said the group is pleased with the new White House billing transparency requirements, but is still pushing for more aggressive action to curb surprise medical bills.
"In a landscape where there is so much resistance to change on the part of drug manufacturers and hospital systems, it is a success," Miller said.
A spokesman for the American Hospital Association declined to comment on the new billing quality measures and reiterated the group's opposition to the Trump administration's hospital price transparency rule. AHA has so far been unsuccessful in a legal bid to stop the rule, but another hearing before the full U.S. Court of Appeals for the D.C. Circuit is scheduled for Oct. 15.
In an effort to bolster his healthcare record ahead of the November election, Trump signed an executive order in September with a laundry list of healthcare priorities and policies. Buried amid other policies on preexisting conditions and surprise billing were new billing quality reporting requirements for hospitals that are supposed to go into effect six months from the order's signing.
The required information would include whether a hospital follows price transparency rules and gives patients an itemized list of the services they received at discharge. It would also tell consumers how often a hospital sues its patients over billing issues, including whether a hospital tries to garnish a patient's wages, places a lien on their home or withdraws money from a patient's income taxes.
The order text hewed closely to billing quality metrics laid out in a February article written by Makary and Dr. Simon Mathews, who leads clinical innovation efforts at the Johns Hopkins Armstrong Institute for Patient Safety and Quality, published in the Journal of the American Medical Association. Makary had participated in a White House roundtable on surprise billing in January 2019, and White House officials said they reached out after seeing the JAMA article. The quality measures fit well with other administration efforts to force price transparency for hospitals and insurers and push surprise billing reform.
"We were on the lookout for complementary efforts that we could pursue to protect patients further," a White House official knowledgeable about the issue said.
The first billing quality measure in Trump's executive order would create public accountability for compliance with the administration's hospital price transparency rule, which is set to go into effect Jan. 1.
The official said the White House is confident hospitals will comply with the new transparency rule, but the public reporting creates accountability.
"After hearing some of the feedback from industry, we definitely have contemplated there may be a situation where some do not comply, and we make sure that information is available to consumers," the official said.
Experts have voiced some skepticism as to whether the billing quality metrics could be implemented in a six-month time frame. CMS is still working out the technical details of integrating the new quality measures into its Hospital Compare tool, the White House official said.
Makary has investigated and written about predatory billing by hospitals for years, and he said implementing public billing quality metrics could help hospitals rebuild trust with patients and identify actors taking advantage of low-income people.
"This next step of creating transparency in a standardized fashion is a natural response to public demand for accountability," Makary said.
Makary's work on predatory billing practices caught the attention of Arnold Ventures' healthcare policy team, and the group's not-for-profit arm gave Makary's team a $696,583 grant over a 2019-2021 term to analyze the frequency of predatory billing and "inform policy changes that protect patients," according to the Arnold Ventures website.
Arnold Ventures has also been involved in funding other Johns Hopkins researchers who helped create Colorado's provider payment formula for its public option proposal and funding a brain trust that developed template state legislation to contain hospital costs.
Miller said Makary's transparency and predatory billing work fit into Arnold Ventures' mission to correct market failures and inequalities.
"As much as hospital executives don't want to hear it, the prices hospitals are charging in the commercial market are driven by market concentration, not differences in quality," Miller said.
Beyond healthcare consumers, the new quality measures could be used by proxy healthcare shoppers such as employers, policymakers, researchers and journalists. ERISA Industry Committee Senior Vice President of Health Policy James Gelfand said his group supports the new transparency measures and wants them implemented immediately.
"Hospitals should be doing this on their own, not suing to prevent transparency and issuing excuses related to staffing or technology challenges," Gelfand said.
Miller said it is still important to pursue more aggressive hospital contracting and surprise billing reforms because some medical services aren't shoppable in advance, like emergency care, and some markets don't have sufficient competition.
"We think this is good policy, necessary policy, but not sufficient. There is more to be done here," Miller said.
