Price transparency and the No Surprises Act are still in their infancy, but providers and health plans would be smart to comply now to avoid facing unnecessary penalties, warned President Trump’s former Health and Human Services Secretary Alex Azar in a recent virtual summit.
The former policymaker said the wheels set in motion during his term and continued by the Biden administration will continue rolling, one way or another.
“There is no way we’re going backwards on transparency of pricing information,” Azar said during the event. “You can resist this, you could not comply with it. Or you can embrace this and figure out how this can be a competitive advantage for you.”
Experts and federal officials who spoke during the four-day Health Care Transparency and No Surprises Act Summit were primarily positive on price transparency efforts so far, but outlined a host of ongoing issues and complaints as well.
Transparency shows promise
Of the landmark healthcare legislation put into law in recent years, Azar said his price transparency push will ultimately be more consequential than the Affordable Care Act and transform how patients seek care.
“We were, I hope people would say, quite revolutionary in what we tried to do in driving a revised healthcare vision,” he proclaimed.
In January 2021, the first of the price transparency rules took effect requiring hospitals to list their prices and negotiated discounts. It also mandated providers list the negotiated rates for 300 shoppable (or elective) services in a consumer-usable format.
Health plan transparency, along with the No Surprises Act, was enforceable beginning July 1, 2022, with plans needing to post a list of 500 shoppable services starting January 2023 and a larger dataset that needed to be published by January 2024. The No Surprises Act was created to eliminate surprise medical bills, where patients receive a good-faith estimate from hospitals that can be used to dispute excessive charges down the line.
Though the legislation has largely succeeded in opening up the gates of information, much of that data is unusable for the average consumer. Some non-emergency services are planned and can be of value in a hospital setting, but even in those cases the data are not always consumer-friendly. This leaves an opportunity for insurers and hospitals to create portals on their websites, or for large companies like Google to fill in the gaps to create tools that can be easily used.
Azar likened the legislation to “getting the data soup out there” so usable tools could be created to “slurp up that information.”
“Increasingly, we’ve seen that’s happening to a greater and greater extent,” said Douglas Jacobs, M.D., the current chief transformation officer for Centers for Medicare and Medicaid Services (CMS) overseeing value-based care, health equity and price transparency.
Jacobs said CMS has recently standardized new changes to make it easier for third parties and hospitals to comply to machine-readable format requirements, in turn making it easier to create these tools.
Companies like Handl Health have sprouted up to compare prices of providers and carrier networks. They work primarily with hospital and plan files, focusing on the employer-sponsored market by building a tool to target unit prices and setting up a cost comparison capability across networks.
Handl Health CEO Ahmed Marmoush foresees a world where, thanks to advances from artificial intelligence, normal people will able to ask trained models highly specific transparency-related questions.
“I believe we will soon be able to ask a trained model, ‘What is the most effective plan for me in California? or ‘Where should I go to get an MRI if I live in XYZ zip code?’” he said, noting that large language models enhance the company’s business model.
Jacobs echoed these use cases, saying AI has the unique ability to bring together data from machine-readable files for consumers and facilitating unprecedented level of price-conscious decisions in healthcare.
The Lower Prices, More Transparency Act received bipartisan support in the House in December, but the legislation has since stalled out. Negotiated in three separate House committees, the Pharmaceutical Care Management Association got its way in killing the bill, which went after PBM reform. It also codified certain price transparency protections, requiring insurers to disclose billing codes and hospitals to publish charges through machine-readable files.
“Something is going to happen there,” said Azar. “They’re fighting about the stuff that gets attached to it."
Compliance an issue, but less so
One of the major problems with price transparency regulations has been hospitals’ slow adaptation to the changes.
At least that was initially the case, but has since improved once the Biden administration agreed to hand out harsher penalties to providers that chose to ignore the requirements, said Azar.
As hospitals become more accustomed to the new normal, compliance is less of an issue. About seven in 10 hospitals are compliant with price transparency rules, according to the American Hospital Association.
“We’ve done a lot of education and outreach to hospitals as we’ve implemented these rules,” said Jacobson. “We also really ramped up enforcement and issue corrective action plans, warning notices and civil monetary penalties.”
Commercial payers comply at a rate of 94% to rules requiring cost estimates to be available to enrollees, a 2023 report from accounting and consulting firm EY found.
Still, price transparency has plenty of areas ripe for improvement.
A rise of disputes brought to arbitration as a result of the No Surprises Act has led to an “unexpectedly huge volume,” said Jeff Wu, deputy director for policy for the Center for Consumer Information and Insurance Oversight. He expects the number of disputes will level off as payers and providers better understand the new rules.
The No Surprises Act doesn’t cover ground ambulance services either, though 16 states do offer protections in these scenarios, said Patricia Kelmar, healthcare campaigns director for the Public Interest Research Group.
“Transparency is a first step but not a panacea,” added Elisabeth Rosenthal, M.D., editor-in-chief of KFF Health News.
She said it can’t be forgotten that people choose providers based on recommendation, and medical costs are far too high for most people, transparency or not. Patients are not typically choosing their anesthesiologist or radiologist when they need a procedure, so hospitals should have to guarantee that specialists assigned to patients are in-network.