Hospitals May Have to Disclose Discount Rates Negotiated with Insurers

Under a newly proposed Trump administration rule, hospitals would have to disclose the discounted prices they negotiate with insurance companies. The objective of the new rule is to increase transparency and reveal how much health care costs vary across the U.S.

This new rule would require that hospitals disclose insurer-specific negotiated charges for all items and services. All charges would have to be linked to the name of the insurer and updated annually, and all data must be machine-readable to enable comparisons among hospitals. Specifically, hospitals must list the prices of nearly 300 popular patient services, including x-rays, outpatient visits, and lab tests.

The pricing information would need to be publicly available either online or in written form on request. Hospitals that fail to comply with these mandates could be fined up to $300 per day, according to the new rule.

The proposal is already facing pushback from industry groups who argue that the requirement goes beyond the authority of the executive branch. They have also warned that the new rule could backfire by causing competitors to raise their prices if they see others are getting higher insurance payments.

“Publicly disclosing competitively negotiated, proprietary rates will push prices and premiums higher – not lower – for consumers, patients and taxpayers,” said Matt Eyles, president and CEO of America’s Health Insurance Plans, an industry trade group.

The Trump administration is also working on new rules that would force insurers to disclose their rates, another facet of the plan to publicize insurance costs.

Source: The Wall Street Journal, July 29, 2019.