Negotiated hospital rates in crosshairs of Trump administration

If the Trump administration has its way, hospitals will have to disclose how much they charge for all supplies, tests and procedures to their patients.

The Hill reports that the secret rates often negotiated by hospitals with insurers are among the elements the White House seeks to include in its efforts to make it easier for patients to price-shop for hospitals—something both hospitals and insurers are firmly opposed to.

Related: Health providers balk at new proposal to disclose prices

While hospitals are already obligated to publicly post list prices for services, this proposal would go further. In a call with reporters, Centers for Medicare and Medicaid Services Administrator Seema Verma said the proposal would expand the requirement to be more meaningful by including base charges before discounts as well as the insurer-specific negotiated charges. Both the insurance company and the insurance plan would be named in connection with the charges.

According to Modern Healthcare, all “shoppable” services that can be scheduled in advance, such as MRIs and hip replacements, would be included in the requirement. Says Verma, “Hospitals would be required to post all of their payer-specific negotiated rates, which are the prices actually paid by insurers” so that consumers would be able to conduct “apples-to-apples comparison” on pricing.

Hospitals failing at the transparency requirements will pay for it, too, with civil monetary penalties of more than $100,000 per year. And they’ll be monitored and audited to make sure they comply.

According to Verma, it shouldn’t be a huge burden for hospitals since they already have the information and some providers have already posted negotiated rates online. She is cited in the report pointing out that a regulatory impact analysis found that complying with the proposed rule would cost the 6,000 hospitals affected by the rule about $6 million, or about $1,000 each.

In a statement, Rick Pollack, CEO of the American Hospital Association, was highly critical of the CMS move and said that compelling hospitals to post negotiated rates “could seriously limit the choices available to patients in the private market and fuel anticompetitive behavior among commercial health insurers in an already highly concentrated insurance industry.” The association also said that the proposal is beyond the legal authority of CMS.

Read more:

• A new way to promote health care price transparency: T-shirts
• How to improve transparency and take control over health care costs
• 10 states where hospital inpatient stays are most expensive