An executive order issued this week calls for the U.S. Department of Health and Human Services (HHS) to write the hospital requirements on price transparency in the next 60 days. This should mandate “standard charge information, including charges and information based on negotiated rates and for common or shoppable items.”
But what are common or shoppable items? These are treatments and procedures widely available from hospitals and doctors. According to HHS Secretary Alex Azar, “Seventy percent of inpatient hospital services are what one would call shoppable. Ninety-three percent of outpatient hospital services are shoppable.” This leaves a relatively broad range for patients to be able to research price and quality prior to treatment to ensure they are receiving the best care at the best cost.
The mandate itself is not as specific as originally expected, which leaves the HHS with more leeway to make the requirements easier for both patients and hospitals and insurers to stomach.
Commercial Insurers and hospitals fear that publishing contracted rates on shoppable services could lead to higher costs for services not considered shoppable or under such regulation and end up increasing costs for patients overall.
However, Loren Adler, associate director of the USC-Brooking Schaeffer Initiative for Health Policy, feels this order would only require the disclosure of average prices, or even a range of prices, rather than the precise contracted amount by commercial insurers.
The biggest concern from the mandate’s advocates is that the executive order itself is not specific enough in its wording and will leave too much room for safety nets for hospitals and insurers.
A secondary concern is the timeframe involved. Sixty days is not a lot of time to transition to transparency for such a large percentage of shoppable services.
Without a doubt, the hospital industry and commercial insurers will be fighting this mandate over the next sixty days. Until then, we will be waiting to see how specific the HHS will be with their regulations for hospital and insurance transparency.