In an effort to make sure patients are provided with accurate information concerning prices of their healthcare, the President has issued an Executive Order directing further enforcement of the Executive Order he signed in 2019 (EO 13877). This new order directs the Secretaries of the Departments of the Treasury, Labor, and Health and Human Services (the Departments) to enforce and expand existing transparency regulations that require hospitals and health plans to publish machine readable files with pricing and reimbursement data and also require hospitals and health plans to provide consumers with price comparison tools. Within a timeframe of 90 days from the date of the order, the Departments must act to:
For some time now, the argument has been that, with pricing negotiations and arrangements so veiled by corporate entities, any efforts to lower healthcare costs have proved futile. True price transparency can potentially help lower healthcare prices and help patients and employers. Analysts previously estimated a reduction of up to $80 billion in healthcare costs within 2 years of full implementation of the transparency requirements. Employers could see significant decreases in their spending, the majority of which would come from the most common healthcare services. For employees, real transparency may translate to a better understanding of how their healthcare works. Having clear visibility of prices will reduce surprise billing and hold providers and carriers more accountable.
Originally, efforts to expand transparency were fortified by the final rule released in 2021, which called for hospitals to publish the prices of certain services and for health plans to provide a listing of negotiated prices. Both of these endeavors have been excruciatingly slow in reaching any type of success due to numerous lawsuits. As one might suspect, many hospital groups have been and continue to be opposed to any attempts to alter their price negotiation process, claiming that this is a hindrance that violates free speech rights and can actually lead to higher healthcare costs. To date, the courts have not agreed with this position.
The new executive order does not initiate any new policy, but it does seek to expand and strengthen current initiatives. With the ambitious goal of lowering health care prices set as one of the new administration’s priorities, we could see a new round of regulation from the Departments or legislation from Congress. That, as we know, may take time to materialize.
As this process continues, employers may take a look at their healthcare spending and have more discussions with their benefits advisors to plan for the future. In the meantime, group health plan sponsors should ensure they’re complying with the current Transparency in Coverage (TiC) rules and be mindful that changes may be coming. For the most part, employers can rely heavily on their insurance carriers and third-party administrators for compliance with the TiC requirements. MZQ Consulting is happy to assist employers that are uncertain about how these existing rules impact them.
