Price Transparency: The View from Washington

A new federal report on the future of our healthcare system focuses on price transparency—and signals that big changes may be ahead.

Among the most encouraging signs in Reforming America’s Healthcare System Through Choice and Competition is recognition of a key tenet of HFMA’s price transparency work: Personalized out-of-pocket prices are much more useful to patients than “relatively meaningless charges,” as the report characterizes chargemaster prices. However, there is no indication in the report, which was prepared by HHS in collaboration with other federal agencies, that CMS plans to drop the new requirement for hospitals to publish chargemaster prices online in machine readable format. This is unfortunate, because publishing these data does little or nothing to help patients understand their financial responsibility or manage their out-of-pocket expenses.

The report also recommends that the administration encourage the private sector and states to build consumer-friendly websites capable of displaying price information for the most common transactions. HFMA has long recommended that providers focus on the services they deliver most often rather than trying to price out the entire repertoire of procedures they perform. State websites like Maryland’s “Wear the Cost” embody this approach by focusing on common, shoppable services such as childbirth, hysterectomies, and joint replacements. The administration is likely to release more pricing tools for Medicare patients, like the one it released for outpatient surgeries. Moreover, CMS likely will see voluntary efforts to create consumer-friendly price and quality transparency websites as contributing to improved price transparency in the industry, another tenet of HFMA’s Patient Financial Communications Best Practices.

The report also states that Congress should seek to empower patients as they shop for health care by making it easier for them to pay for it directly. For example, all Americans—not just those enrolled in high-deductible health plans—could potentially be allowed to maintain health savings accounts. The report goes on to recommend that federal agencies eliminate any federal rules or policies that create unnecessary barriers to state, federal, or private sector initiatives that provide price transparency. It’s easy to agree, in principle, with that recommendation.

But the Trump administration may have bigger things in mind. For example, citing places where consumers can get lower cash prices for select services than third-party payers can, the report suggests that “further development of a consumer market for health care, anchored around readily available healthcare prices, will likely require reforms to the third party payment system.”

Bottom line: This administration supports price transparency and consumer empowerment—and they are not ruling out a legislative or regulatory approach to achieving those goals. The implications for providers are straightforward. First, make improving price transparency a priority for your organization. Recent remarks by both HHS Secretary Azar and CMS Administrator Verma have made it clear that price transparency is a priority for this administration. Second, monitor consumer-focused developments in Washington closely. An easy way to do that is to follow HFMA’s news coverage. In an era of uncertainty, you can be sure that consumerism will continue to be a priority for HFMA.