It’s no secret that the U.S. Department of Health and Human Services (HHS) recently launched a number of efforts aimed at enhancing transparency in the U.S. health care system. These efforts include better access to one’s own medical record information and various drug pricing disclosure initiatives. But...
Within a recent (and lengthy) proposed rule, HHS asked for comments on the possibility of requiring public disclosure of providers’ negotiated payment amounts from insurers – such as the amount Blue Cross pays a particular hospital for performing a knee replacement surgery.
That “trial balloon” has ignited a fair amount of discussion and debate. The matter itself demonstrates the tug between patients having the right to know the real cost of their health care versus providers and insurers being able to conduct their business in the same manner as other buyers and sellers.
Under federal antitrust laws, competitors are prohibited from acting in a manner that restrains trade. To that end, antitrust laws rather zealously guard knowledge of an insurer’s payment information. For example, competitors are prohibited from sharing non-public pricing information if done in order to fix prices or where the sharing may facilitate price collusion. Antitrust regulators only allow competitors to use surveys of pricing and payment information that give general “benchmarking” data but that do not disclose any actual amounts paid by insurers.
While anyone can go into a store and see what it charges for a bottle of milk, we don’t usually know what the store itself paid for that bottle. But HHS goes so far as to propose the possibility of a “provider’s negotiated rates for all plans” being posted on a public website. Disclosure of such information, therefore, would constitute a radical departure from what is allowed under current antitrust laws.
Perhaps not surprisingly, the provider community is opposed. One executive from the American Hospital Association reportedly stated, “This isn’t really what consumers need or want. What consumers need and want is, ‘What are their out-of-pocket costs?’” At the same time, many consumers are applauding the proposal as another step toward demystifying the financial aspects of health care delivery.
But the legal issues raised by HHS’s proposal have received little attention thus far. In addition to concerns about price fixing, agencies like the Federal Trade Commission have long indicated that knowledge of insurer payment information may lead to “tacit collusion” among providers. That means, even if providers do not directly coordinate their negotiations with insurers, they may do so tacitly based on their knowledge of what other providers are being paid for the same services or care.
At a minimum, HHS’s initiative may require new regulations or agency guidelines allowing for such disclosures. There is a track record of agencies issuing guidelines that permit certain activities between providers, in certain circumstances, which the agencies have indicated they will not pursue as legal violations. This has occurred, for example, with regard to some value-based payment initiatives within the Medicare program.
But such sharing of insurer payment information is unprecedented in the health care arena, and it raises a number of difficult questions. One concern is the extent to which an agency may issue rules in direct contrast to long-held statutory standards and judicial precedent. To that end, any such rule may quickly find itself subject to a lawsuit challenging its validity.
HHS’s proposal is further evidence of its efforts to increase consumer knowledge and awareness of our health care system – and usually, more knowledge is a good thing. However, this particular HHS initiative may prove to be uniquely challenging in light of long-standing antitrust principals.