Transparency rule could come this month, White House executive says

• The Trump administration is aiming to issue a new requirement this month for hospitals to disclose their health plan rates.
• A White House executive downplayed the rule’s unintended consequences.
• The administration expects Congress to enact legislation addressing surprise medical bills by the end of 2019.

The controversial regulatory requirement for hospitals to publicize rates privately negotiated with health plans will be released as soon as this month

Joseph Grogan, JD, assistant to the president and director of the Trump administration’s Domestic Policy Council, said Nov. 8 that the goal is to release in November a rule that hospitals make public a list of their standard charges, which the Centers for Medicare & Medicaid Services defined as both gross charges and payer-specific negotiated charges. The requirement was proposed this summer as part of a large hospital outpatient payment rule, but the administration stripped it out when the final rule was released Nov. 1.

The proposal was submitted Oct. 29 to the Office of Management and Budget (OMB), which is the last stage in the rule creation process, but some industry observers though OMB would take months to review it or even withdraw it over legal or policy concerns.

“Transparency would be revolutionary, and as with all disruptive innovations it is unclear where it would end, but it’s got to be better than the current system,” Grogan said at a media briefing.

Grogan downplayed concerns that the transparency requirement could have unintended consequences, such as allowing health plans to coordinate on provider negotiations or hospitals to identify health plan rates and demand higher rates. Both issues have arisen in state versions of the rule.

“It’ll go out as proposed and we may solicit comments, and we may make a change as the comments are made final,” Grogan said when asked about unintended consequences.

It appears the version under OMB review is a final rule, but sometimes regulators continue to accept comments after rules are finalized.

In comments submitted by the American Hospital Association when the rule was proposed, concerns included:

• The administration’s lack of legal authority to mandate the disclosure of negotiated prices
• The potential to disrupt private contract negotiations between providers and health plans
• The possibility of causing confusion for patients about their out-of-pocket costs

Factors driving the administration’s transparency push

Grogan said healthcare in recent decades has not achieved the same improvements in quality and cost reduction as, for example, the computer industry. Reasons include:

• Government subsidies
• Lack of transparency
• Misaligned incentives

He highlighted the example of a healthcare procedure — LASIK surgery — that has minimal government involvement and is a rare service for which prices are decreasing.

“We don’t have costs coming down as much as much as they should in healthcare with all of the innovation we’ve gotten,” Grogan said.

More transparency initiatives are coming

Grogan cited other healthcare transparency initiatives and said more will come.

“The transparency problem is not going to be solved in one step or one fell swoop,” Grogan said. “We’ll make a push on it on a number of different fronts.”

He cited the administration’s support for enacting legislation to prevent surprise healthcare bills as another way to bring transparency.

“Transparency should be first and foremost in everything we do on healthcare,” Grogan said.

Although surprise billing legislation a has become ensnared over the key issue of how provider payment rates will be determined in such situations, Grogan downplayed the impasse and predicted legislation will pass this year, immediately after or as part of legislation to tame high drug costs.

“It could come together with a bunch of healthcare legislation at the end of the year,” Grogan said.