Transparency Rule Impacts Hospitals and Insurers, Not Prices

With healthcare an increasing focus of the 2020 presidential race, the Trump administration this month released a new healthcare transparency rule. 

This rule is said to impact hospitals and insurance carriers. 

But the rule focuses more on disclosing negotiations between hospitals and insurers, rather than providing price information to make the public better informed consumers. 

The hospital-rate rule was originally scheduled to take effect in January, but was postponed.

The proposal’s newest part includes an insurance carrier price-disclosure initiative affecting the private-employer market, which covers nearly 55% of Connecticut residents.

Consumer Tools

Under the rule, insurers must create a web-based tool for consumers and publicize the list price, the negotiated rate, cost sharing, and the amount left on a plan deductible, as well as allowable out-of-network rates.

Hospitals must provide insurer-specific negotiated rates in a computer-readable file and post negotiated charges online for 300 specific services. 

These services were based on procedures for which patients typically price shop. 

Industry representatives believe patients would be better served by having a deeper understanding of their out-of-pocket costs.

The administration stipulated to 70 of those services, including vaginal birth, colonoscopy, and joint-replacement surgery, allowing the hospital to choose the other 230 services they are required to post online.

Insurers have denounced the rule on the premise that competitive negotiations lower consumer costs and premiums. 

Industry representatives also believe that patients would be better served by having a deeper understanding of their out-of-pocket costs.

Legal Challenge

The American Hospital Association announced it will legally challenge the rule, claiming that negotiated rates are proprietary, confidential, contractual agreements. 

Other groups have also posed a First Amendment challenge.

As employer health-plan deductibles outpace wage growth, businesses continue to search for cost relief. 

But while the Trump administration’s proposed rule outlines stringent transparency requirements, it fails to address the underlying factors that drive healthcare costs. 

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For more information, contact CBIA’s Michelle Rakebrand (860.244.1921) | @MRakebrand