The Trump administration unveiled a wide-ranging proposal on Friday requiring hospitals and insurers to give consumers more information about what their health care will cost — a rule intended to increase price transparency for patients shopping for coverage.
Under the rule, hospitals will have to report the rates they strike with individual insurers for all services, including drugs, supplies, facility fees and care by doctors who work for the facility. If the hospitals fail to comply, they could be forced to pay a $300 per day fine.
By making those prices public, the Trump administration argues that hospitals will face pressure to compete for patients, eventually causing prices to drop.
"Our goal was to give patients the knowledge they need about the real price of health care services, so they can shop for the highest quality care at the lowest cost," President Trump said at the White House while introducing the proposal.
The rule is set to go into effect on Jan. 1, 2020, so hospitals have time to comply with the new policy. However, it will likely face a legal challenge from hospitals and insurers, which have previously warned that increased transparency could actually confuse consumers and drive up prices.
“Unfortunately, the rules the administration released today will not help consumers better understand what health services will cost them and may not advance the broader goal of lowering health care costs,” Blue Cross Blue Shield Association President and CEO Scott Serota said in a statement.
And in July, four of the country's biggest hospital systems said they'd challenge the law in court. A similar health care transparency law in Ohio remains tangled in the legal web.
Still, 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, 70 of which -- including vaginal birth, colonoscopy and joint-replacement surgery, are mandated in the rule. Hospitals can select the other 230 services they post online.
Prices charged for health care vary dramatically depending on several factors, including whether a patient is in or out of the patient's insurance network and what price the hospital negotiated with the insurance company. For instance, the cost of a mammogram ranges from $50 at a hospital in New Orleans, to $86,000 at a hospital in Massachusetts, according to Clear Health Costs, which publishes information on health costs.
“This final rule and the proposed rule will bring forward the transparency we need to finally begin reducing the overall healthcare costs," Centers for Medicare and Medicaid Services Administrator Seema Verma said in a statement. "Today's rules usher in a new era that upends the status quo to empower patients and put them first."