HHS responds to arguments against hospital price transparency
Wednesday, February 12, 2020
Regarding healthcare pricing transparency, the Trump administration says patients should have the right to know how much care will cost before they receive it. The argument seems to hold water, because in all other transactions where are wallets are concerned, consumers know the price of the products and services before they buy.
These are the points continually made by leaders at the Department of Health and Human Services (HHS). Specifically, these are the arguments made in a brief filed last week in response to a lawsuit challenging the price transparency rule. HHS also argues that Congress meant for hospital pricing be made public. It references the Public Health Service Act passed in 2010, calling for hospitals to share their standard charges.
The rule even defines that the standard charges must be made public, the agency said.
Price transparency is designed to enable patients to shop for “the most effective, lowest-cost healthcare available,” The Commonwealth Fund stated in early 2019.
Additionally, transparency drives down prices as providers and health systems compete for market share. “This promise of cost control through consumer empowerment has made transparency a popular goal among policymakers on the right and left,” the Commonwealth Fund continued, even though the organization didn’t offer full endorsement of transparency in its breakdown of the operation.
More recently and in a continuation of his full-court press, President Donald Trump cheer-led his administration's price transparency rule ins his 2020 State of the Union address.
The pricing transparency rule, which is slated to go into effect in 2021, Trump said, will save people “massive amounts of money for substantially better care.” He also added that experts believe the rule, which is being challenged in a lawsuit by provider organizations, "will be even bigger than healthcare reform."
He added patients should never be "blindsided" by medical bills.
In the suit against the rule, the HHS brief said First Amendment rights are not violated. Instead, the rule advances the government's interest in providing consumers with better information and does not curb protected speech.
The rule, as designed, is meant to reduce healthcare costs for consumers as deductibles rise, and more costs are pushed to patients. More transparency into pricing, therefore, helps the patient reduce his or her expenses related to care.
For now, the current and historical model of pricing has been a secretive process. The rule would force negotiated rates between hospitals and payers be made public. Healthcare industry insiders had been cold to the rule, going so far as to sue HHS in December. These groups say the rule exceeds the government's authority. They say it violates the First Amendment by forcing hospitals to reveal confidential and proprietary information.
HHS claims transparency will lower prices, even saying: “If patients pay less for healthcare, however, someone else receives less. Therein lies the genesis of this suit.”
Hospital groups says that releasing the negotiated rates will confuse consumers.
HHS counters that claim by saying the information is already available to anyone willing to sift through reams of explanation of benefits, which often arrive to the patient after care is provided and care decisions have been made. No matter, that information is available for sharing publicly. Thus, HHS contends, why not merely make the information readily available at the front-end of the process?
"They do not dispute that consumers are casting about for accurate information about prices in a complex healthcare system, yet they rely on that same complexity as an affirmative reason to deprive patients of pricing information they need to figure out their out-of-pocket expenses," HHS said in its brief.
The hospital groups say doing so would be overly cumbersome to patients and costly to health systems. HHS says not so much: The rule would "impose manageable administrative costs on hospitals."
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