House Members Disagree on Health Care Transparency

WASHINGTON — Is it a “win for patients” or legislation that just doesn’t go far enough to ensure true transparency around drug and other health care related pricing?

That, in essence, was the question that divided members along party lines as the House Ways and Means Committee met to mark up the Health Care Price Transparency Act on Wednesday.

According to Rep. Jason Smith, R-Mo., the committee chairman, the proposed legislation will bring “honesty and clarity” to conversations about the cost of health care.

It does so, he says, by improving on a Trump administration rule requiring roughly 6,000 hospitals across the U.S. to disclose the rates they privately negotiate with insurers, and to publish prices online for about 300 common medical services they provide.

These services include outpatient visits, X-rays, lab tests and even baby deliveries. At the same time, the Trump rule mandated that hospitals must disclose the amount they are willing to accept in cash.

Smith said the new bill will extend this “transparency” to other health care service providers including ambulatory surgical centers and providers of imaging and laboratory services.

Hospitals that don’t comply with the rule’s mandates were subject to a civil penalty of up to $300 a day.

At the time, the Trump administration was trying to “fix” an unintended consequence of the wording of the Affordable Care Act.

The ACA required hospitals to “make public a list of the hospital’s standard charges.” 

In practice, the Department of Health and Human Services said hospitals could comply simply by posting their so-called “chargemaster” or price list.

However, when the hospitals actually did so, a fierce backlash broke out over the steep prices represented in the lists.

The American Hospital Association, the industry group representing the hospitals, attempted to silence the storm by arguing the price lists were “confusing” because they were both highly variable and not representative of what a consumer would actually pay.”

In sum, the association and patient advocates said, the information being reported was useless.

Whatever good intentions Trump had in trying to finally put the matter to rest, his policy was controversial from the start.

To begin with, it was imposed at a time when hospitals were deep into fighting the COVID-19 pandemic and already significantly over burdened.

In addition, the hospitals and several other health care entities would argue in court, the Trump rule exceeded the Centers for Medicare and Medicaid Services’ statutory authority to enforce it, that it forced hospitals to disclose “trade secrets,” and that it ran afoul of the First Amendment because it mandates speech in a manner that failed to directly advance a substantial government interest.

Others simply scratched their heads: Here, they said, the Trump White House was using the ACA to achieve a major health care priority at the same time that it was trying to convince the courts that the whole thing should be thrown out.

The Trump rule was eventually upheld in both the federal district and appellate courts, but by then, the White House had changed hands, and in the early months of the Biden administration, enforcement of the rule was lacking.

In fact, according to a study conducted by Milliman, a management consulting firm working in the health care space, as of April 2021, 32% of hospitals had not posted any of the data required by the rule, and scores more did not post everything that was expected.

In addition, a March 2021 study published in Health Affairs found that 65 of the nation’s largest 100 hospitals were “unambiguously” not in compliance with the rule.

In response, in July 2021, President Joe Biden signed an executive order directing HHS to continue enforcing the price transparency initiatives.

But Smith said Wednesday that those efforts have not gone far enough. He said though 75% of the nation’s 6,000 hospitals are not compliant with the rule, only four have been fined.

“Clearly, Congress needs to do more to ensure meaningful price transparency reaches patients,” Smith said.

But Rep. Richard Neal, D-Mass., the ranking member of the committee, argued the bill before the panel came nowhere near matching the goals set for it.

“We came to the table in hopes of a deal with one basic request, improve on what the Energy and Commerce Committee produced and fill in the gaps where they left critical pieces out,” he said. 

“Unfortunately, the legislation here today does neither,” he added.

Neal continued, “It’s impossible to talk about transparency in the health care system without talking about private equity, which isn’t addressed in this legislation. Its unchecked expansion across the industry has been tied to poor patient outcomes, higher mortality rates in nursing homes, hospital bankruptcies and closures, surprise medical billing and Medicare fraud. 

“Patients have no indication of how PE ownership affects their care, nor can regulators conduct proper oversight. Congress must find ways to ensure greater accountability of private equity owners to protect patients and make certain they receive the quality, affordable care that they deserve,” he said.

Neal said he and his fellow Democrats on the committee also disagreed with their Republican colleague’s insistence that transparency standards be based on age.             

“One of the key gaps in this product is the failure to apply the same standards to Medicare Advantage, which covers over 30 million Americans and will spend more than $9 trillion over the next decade,” he said. “So, while it is laudable that my colleagues want to give my 64-year-old constituents more information on their plan, once they turn 65, they no longer deserve this same background on their Medicare Advantage plan? This omission is concerning. It shouldn’t matter your age, consumers deserve the same transparent information from their health plans.”

Before the panel had even voted, Neal predicted that several other “opportunities for stronger health care industry oversight” would be “left on the table today.”

“Workers and families must be able to understand the health insurance options available to them and rely on robust oversight that prevents anti-competitive tactics and protects consumers,” he said. “Unfortunately, the legislation before us today misses opportunities to strengthen these safeguards.”

Dan can be reached at [email protected] and @DanMcCue