Medical Tuesday Blog

Patients have “been ripped off for years.”

Dec 17

Written by: Del Meyer
12/17/2019 2:40 AM 

Hospitals Sue Trump to Keep Negotiated Prices Secret

The administration wants to require hospitals to reveal the rates they privately negotiate with insurers for all sorts of procedures, amid the public outcry over surprise medical bills.

By Reed Abelson

Alex M. Azar II, the secretary of health and human services. . .  said, “American patients
have been at the mercy of a shadowy system.”
Credit…Tom Brenner/The New York Times

The federal rule, which would not take effect until 2021, is part of a broader push by Trump officials to make health care markets more transparent to patients. The administration also unveiled a proposed rule to 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.

Mr. Trump rolled out the initiative personally, providing some counterprogramming to the second day of impeachment hearings while showing his willingness to take on powerful interest groups like hospitals and insurers.

Mr. Trump was “taking historic action to make health care prices transparent for consumers, yet the coverage on all the cables remains on the impeachment inquiry charade,” his press secretary, Stephanie Grisham, tweeted. “Dems should get back to work — just like our” president.

The hospital industry, which has long kept its negotiations with insurers secret, said it would challenge the rule in federal court. “This is a very radical proposal,” said Tom Nickels, an executive vice president with the American Hospital Association, a trade group.

Hospitals say the administration does not have the authority to compel them to disclose their private negotiations and compared the order to forcing private parties to reveal trade secrets.

But if the rule survives, “it’s a game changer,” said John Barkett, a former Obama administration official who is now a health policy expert at Willis Towers Watson. Knowing the price of a colonoscopy or knee surgery before it takes place “would be hugely helpful,” he said.

The administration’s decision to aggressively tackle the secrecy surrounding hospital prices came amid widespread concern about rising costs for medical care. Democrats have also been campaigning on soaring health care costs, and both parties fear entering the 2020 campaign season with unfulfilled promises to gain control of out-of-pocket health spending. . .

People “are increasingly exposed to the crazy pricing of health care,” said Chas Roades, one of the founders of Gist Healthcare, a consulting firm in Washington. “We are overdue for a public airing of how all of this works.”

While the hospitals’ legal challenge may succeed, they are vulnerable to the increasing public outcry over high prices, Mr. Roades said. “It’s not a good look for the industry to push back on transparency on prices.” . . .

The rule has the potential to roil the health care industry, which critics argue use the secrecy of their negotiations to keep prices high. A recent study showed that private insurers pay some hospitals two to three times more than the federal Medicare program pays for the same care. Even employers say they have little visibility into the prices being paid by the insurers on behalf of their workers. . .

Reed Abelson has been a reporter for The New York Times since 1995. She currently covers the business of health care, focusing on health insurance and how financial incentives affect the delivery of medical care. She witnessed the Affordable Care Act become law and is actively keeping an eye on what happens next.

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