The Trump administration proposed a new rule on Monday that would require hospitals to publicly disclose the discounted prices they offer to insurance companies — a change intended to increase price transparency for patients shopping for care.
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If the 6,000 hospitals that accept Medicare do not comply with the proposed requirement, they’ll be slapped with a $300 fine each day, according to the Centers for Medicare & Medicaid Services.
The proposal builds on a June executive order by President Trump — who made reducing health care costs a principle of his 2016 campaign — that would force hospitals to disclose prices that reflect what insurers and patients pay for common services. At the time, the rule did not specify that hospitals must release the privately negotiated price they offered insurers.
The public comment period will be open until the end of September, and the plan would take effect in January; however, it would likely face a legal challenge from hospitals and insurers, which have previously said transparency could actually force prices to rise because they would know the price that competitors offer, and therefore be unwilling to settle.
“Publicly disclosing competitively negotiated, proprietary rates will push prices and premiums higher — not lower — for consumers, patients and taxpayers,” Matt Eyles, president and CEO of America’s Health Insurance Plans, said in a statement.
A similar health care transparency law in Ohio remains tangled in the legal web.
But the Trump administration contends that requiring hospitals to release the negotiated price is intrinsic to lowering costs. For instance, hospitals would need to disclose payer-specific charges for at least 300 shoppable services, like CT scans or X-rays. By making those prices available to consumers, the Trump administration argues that hospitals will be under more pressure to compete, eventually causing prices to fall.
“For certain types of services, MRIs, certain scheduled services, people can shop around,” Centers for Medicare & Medicaid Services Administrator Seema Verma said on a call with reporters, according to multiple media outlets. “I think when they see the varying prices for services, they will start to shop around for services.”
Meanwhile, an earlier proposal by the White House requiring drugmakers to disclose their prices in direct-to-consumer TV advertising is still in the courts, after a federal judge in early July blocked the government from implementing the new rule.