Employers, hospitals and insurers butt heads over transparency proposals

Susanna Luthi | June 06, 2019 05:46 PM

For months, the White House and lawmakers have been urging more transparency for the healthcare system as they try to grapple with their $3.4 trillion cost problem.

But this week, insurers and hospitals drew their own lines in the sand for Congress. Their comments on the Senate health committee’s draft legislationthat aims to cut expenses across the system exposed the gulf between the financial interests of those industries and employer plans that pay for most Americans’ care.

One contentious provision is the proposed mandate on hospitals and insurers to give patients a cost estimate for any upcoming treatment within 48 hours of a request.

The measure has the support of the major insurance lobbying group America’s Health Insurance Plans (AHIP) as well as the Blue Cross and Blue Shield Association and the ERISA Industry Committee, which represents large employer plans.

“We believe that providers, in coordination with our (third-party administrators) can also provide this information to patients,” the ERISA group’s senior vice president of health policy James Gelfand wrote. “Indeed, access to this information should help patients to better navigate the healthcare system.”

Hospitals weren’t so happy.

Chip Kahn, CEO for the Federation of American Hospitals that represents investor-owned health systems, made it clear he doesn’t want hospitals to be on the hook to give out-of-pocket cost estimates on behalf of their contracted physicians.

He also stressed that a patient’s final cost could look significantly different than an initial estimate.

“These differences can be particularly marked where a patient suffers an unforeseen complication that necessitates additional services and increases the patient’s cost-sharing liability,” he said.

Moreover, he told the committee, patients’ insurers should be responsible for “good faith estimates” of prices.

“Placing the onus on hospitals to provide cost estimates for any service reasonably expected to be provided in conjunction with the specified service is inappropriate as the hospital cannot accurately know exactly what services would be provided in all instances and would not necessarily be privy to the patient’s cost-sharing amounts for services provided by other providers that are not employed by the hospital,” he said.

The American Hospital Association said hospitals generally can only provide accurate projections on “very discreet services and bundles of services,” like routine procedures and laboratory and diagnostic tests.

When it came to disclosing negotiated rates, insurers and hospitals both expressed deep reluctance because that would expose their agreements.

Under the proposal, insurers couldn’t agree to any gag clause that prohibits disclosure of a hospital’s pricing or quality information to certain parties including the patient. Kahn wants that provision removed from the legislation completely.

He argued that the proposal’s privacy safeguards aren’t sufficient and could lead to hospital’s price data being shared with competitors and affecting their business.

AHA also opposed that provision among other proposed contracting overhauls and said they would interfere with insurer relationships.

The Blue Cross and Blue Shield Association said it could only support the measure if it is amended.

“As discussed in our feedback on other sections, we are supportive of disclosure of out-of-pocket costs to our members but broad public disclosure of negotiated rates will lead to healthcare cost increases and distortions of market competition,” the group said.

But employer groups like the ERISA Industry Committee supported the proposal and asked the committee to go further.

“It is our understanding that there could also be additional payments made pursuant to bonus agreements, sometimes on a quarterly or year-end basis—and those payments should be included in this section,” Gelfand wrote.

Source: Modern Healthcare