In one of his biggest moves towards health care reform, President Donald Trump has announced that hospitals will soon be required to disclose the rates they privately negotiate with insurers. Both hospitals and insurers have fought hard in the past to keep these negotiations secret, often claiming that they amounted to proprietary information. Now, they have until 2021 to come up with an acceptable way to make this information available to the public.
Under the new rules, hospitals would be required to make a range of prices easily available. They are expected to include the rates they negotiate with insurers and the amounts they are willing to accept in cash for a list of about 300 common services. The rates must be displayed online in an easily searchable format. Hospitals that don’t comply will face a civil penalty of up to $300 a day.
The new rules also call for insurers to create an online tool that would provide consumers with estimates of their out-of-pocket costs for all health care services. The tool would provide both in-network rates as well as the allowed amounts paid for out-of-network providers. This information is already revealed to patients when they receive an explanations of benefits from their insurers after they receive care. The administration says this information should be made available beforehand.
Health and Human Services Secretary Alex Azar said this announcement may be “a more significant improvement to American health care markets than any other single thing the Trump administration has done.” However, the hospital industry is expected to challenge the new rules in court. It has claimed in past legal skirmishes that the government doesn’t have the authority to force it to disclose the results of secret negotiations. Four hospital groups have already promised to file a legal challenge. They are sure to be joined by others.