Trump Administration Tackles Hospital Pricing Transparency

The Trump administration has announced a new rule that would require hospitals to publicly disclose the discounted prices they negotiate with insurance companies. Under the final rule, hospitals will have to make public the negotiated rates, as well as the amounts they are willing to accept in cash for an item or service. The federal rule would take effect in 2021.

President Trump made the announcement during a speech in the White House’s Roosevelt Room. He has made price transparency a centerpiece of his health care agenda. He commented as part of his remarks, “For decades, hospitals, insurance companies, lobbyists and special interests have hidden prices from consumers, so they could drive up costs for you, and you had no idea what was happening,” “You’d get bills that were unbelievable and you’d have no idea why.”

The hospital industry has long kept its negotiations with insurers secret, making it challenging for patients to seek less expensive care. Both the hospitals and health insurers say the negotiations are proprietary information, even though the prices are eventually disclosed to the patient in an explanations of benefits from their insurers – typically sent after they have received care. Administration officials say that information should be available before the person receives care.

The new rule requires hospitals to make prices easily available on a range of medical services, such as X-rays, outpatient visits, Cesarean deliveries and lab tests. They must provide this information in an online, searchable way. Hospitals that don’t comply will face a civil penalty of up to $300 a day. Another proposed rule would require insurers to allow patients to get advanced estimates of their out-of-pocket costs before they see a doctor or go to the hospital.

Four hospital groups quickly promised to file a legal challenge to the rule. They say the administration does not have the authority to compel them to disclose their private negotiations. Health insurers reached for comment on the matter said they were evaluating the rules.