Consumers have an important role to play in controlling healthcare costs. However, they must also have helpful and accurate information in order to create the market forces necessary to actively insist on lower healthcare costs.
Consumers rely on their health insurance company to pay healthcare providers for a large portion of their medical costs. PHP (like all other third party payers) negotiate prices for services with healthcare providers on behalf of the member. This long-held industry process doesn’t allow consumers to actually see the true market price of the care they receive. And, when consumers seek services they do not typically know how competitive the costs for services actually were.
Historically, there has been little or no incentive for consumers to consider price and seek out lower-cost care as a large portion of their out-of-pocket financial liability has been dependent on the provider's negotiated rates with the third-party payer.
As healthcare spending continues to rise, consumers are shouldering a greater portion of the cost. And, it’s clear, consumers are tired of “surprise” billing and lack of transparency, and want more accurate information earlier in the process.
Executive Order 13877
On June 24, 2019 President Trump signed Executive Order 13877, Improving Price and Quality Transparency in American Health to Put Patients First. Executive Order 13877 aims to assist patients in making informed decisions about their healthcare by dismantling "opaque pricing structures." The Order emphasizes the important role that access to information plays in encouraging competition and equipping patients with enough information to make informed choices based on cost and quality.
The Provisions of the Order include:
Informing patients about actual prices
The Order instructs the Departments of Health and Human Services (HHS), Treasury, and Labor to inform consumers and requires hospitals to publicly post and regularly update charges for services, supplies, and fees in a consumer-friendly format.
Establishing a health quality roadmap
The Order also tasks the Departments of HHS, Defense, and Veterans Affairs with developing a Health Quality Roadmap to improve reporting of data and quality measures across various government health programs, as well as the Health Insurance Marketplace.
Increasing access to data to make healthcare information more transparent and useful
The Order directs the Departments of HHS, Treasury, Labor, Defense, and Veterans Affairs to increase access to de-identified health claims data—health information stripped of direct personal identifiers to preserve privacy.
Expanding health benefit options
The Order expands the availability of two types of consumer-directed healthcare accounts. First, the Order requires the Treasury Department to issue guidance that will provide greater flexibility to individuals with chronic conditions to qualify for contributions to a health savings account—which are available only if the individual has coverage under a high deductible health plan (HDHP).
Second, the Order directs the Treasury Department to issue guidance that increases the amount that individuals may carry over from the unused balance of a health flexible spending arrangement from one year to the next. That amount is currently limited to $500.
Addressing Surprise Medical Billing
The Order requires HHS to submit to the President a report on steps the Administration can take to implement measures to reduce surprise medical billing. This issue is already the subject of potential federal legislation in Congress and is a topic that state legislatures have been addressing as well.
The “No Surprise Act”, part of H.R. 133, Omnibus Appropriations and Emergency Coronavirus Relief Act slated to take effect on January 1, 2022 further strengthens legislation regarding transparency in pricing and billing. The Act also introduces requirements for providers to notify patients about services from a non-contracted provider to avoid “surprise” balance billing and guidance on billing dispute resolution.
America’s Health Insurance Plans keeps a watchful eye
America’s Health Insurance Plans (AHIP) reminds us that the first regulatory enforcement for Executive Order 13877 went into effect in July 2021. Health insurance companies, including PHP, are addressing significant changes to comply with regulations and make information more accessible. Immediate efforts include:
- Ensuring data accuracy and completeness is constantly available to members
- Verifying the highest level of health information security
- Making sure all technological systems are interconnected so that reports and reporting are accurate and information is cross-referenced
Additional price transparency and information availability to come
The Consolidated Appropriations Act of 2021, or “No Surprises Act", signed into law on December 27, 2020, includes a number of provisions that continue to solidify and build upon commercial health plan requirements aimed at improved transparency to help patients better understand their potential out-of-pocket cost sharing before receiving healthcare services. The Act includes requirements aimed at protecting patients from surprise medical bills, including those from out-of-network providers the patient may not have had a choice in due to an emergency.
Limitless transparency means opportunity for consumers
Ultimately, what lies beyond the regulatory hurdles are limitless opportunities for consumers to take control of their health spending and make meaningful decisions about where, and with whom, they seek care. These efforts will enhance each of our healthcare journeys, improve our care coordination and drive improved health outcomes at lower costs.
For more information about healthcare transparency or PHP products and services, please contact Jen Mitchen at:
Jen Mitchen
Regional Director
jmitchen@phpni.com
1-800-982-6257, ext. 373
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