If consumers or business departments received a major charge on their monthly statements with no pricing breakdown or itemized receipts, many would demand more information if not outright refuse to pay.
But that’s not the case in healthcare, where unexpected fees billed from insurers and hospitals and multiplicative markups are delivered after the fact and with little explanation.
That was the message senators heard loud and clear during a Thursday morning hearing of policy researchers and purchasers of commercial insurance for employees and union members.
The invited witnesses acknowledged the healthcare transparency policies rolled out by the Trump and Biden administrations as a win for consumers—despite some bumps during implementation and remaining opportunities to clean up payers’ messy claims data.
Individual consumers hit with unexpected inpatient care often don't get a chance to see the prices. But, employers can reference the numbers while shopping, and startup entrepreneurs have been developing programs that steer patients toward lower-cost providers, Brown University School of Public Health researcher Chris Whaley, Ph.D., told the Senate’s Special Committee on Aging.
Yet Whaley and other invited witnesses agreed there’s still an imbalance of pricing information that carriers and others wield to carve out profits. They maintain that black box via a combination of “draconian" NDA provisions, proprietary data formats, limited data sharing provisions, prohibitive cybersecurity policies and other tactics, Chris Deacon, an employer-sponsored health benefits consultant and formerly assistant director of New Jersey’s Division of Pensions and Benefits, told senators.
“That is the ultimate behavior of a monopoly,” responded Senator and Special Committee Ranking Member Mike Braun, R-Indiana. “Remember, they are the suppliers, and this is going against their own customers."
Braun’s office released a report (PDF) concurrent with the hearing that outlined “skyrocketing healthcare prices” and included recommendations to expand or adopt new transparency measures across the industry.
During questioning, Cora Opsahl, director of the health fund for members of the 32BJ SEIU union, confirmed that her team is constantly “wrestling” for access to comprehensive claims data and was only able to make gains by walking away during negotiations with a major payer.
Deacon said recent legislation, which prohibit claims data restrictions in new contracts, has provided a crack in the ice. Employers have been able to litigate for access to the data when restricted—though none of these cases have yet reached their conclusion or have been settled out of court.
Hospitals and health systems weren’t off the hook, either. Braun’s opening comments included a video in which a patient was assured by hospitals that her service was covered by insurance, but then received major unexpected bills for facility fees. In later questioning, Families USA Senior Director for Health Policy Sophia Tripoli noted that such practices and a lack of site-neutral payment policy have incentivized health systems to acquire more practices and, subsequently, raise costs.
The issue of provider consolidation was key for Committee Chairman Robert Casey Jr., D-Pennsylvania, who sought confirmation from Brown University’s Whaley of the link between consolidation and higher prices—in response to which Whaley noted that no research shows a correlation between higher hospital prices and improved care quality.
Casey and fellow Democrats like Elizabeth Warren, D-Massachusetts, also took time to highlight the difficulty consumers, purchasers and even regulators face uncovering the ownership interests of some practices or hospitals. They, with backing from witnesses, suggested that increasing ownership transparency would increase accountability and help reduce prices.
Replete through the hearing were calls to rally around legislation targeting healthcare costs.
Casey and Raphael Warnock, D-Georgia, both highlighted legislation they introduced Thursday that would tackle the adjacent issue of high out-of-pocket costs for prescription drugs. The Capping Prescription Costs Act, framed as an extension of the Inflation Reduction Act, would apply to both group health plans and marketplace health plans.
Braun kept the legislative focus squarely on price transparency, highlighting a bipartisan package he brought with Sens. John Hickenlooper, D-Colorado; Bernie Sanders, I-Vermont; Chuck Grassley, R-Iowa; and Tina Smith, D-Minnesota, earlier this year.
That bill, the Health Care PRICE Transparency Act 2.0, received the explicit support of multiple witnesses and other price transparency advocacy groups whose written comments were entered into the hearing’s record. It would impose data sharing standards, require negotiated rates and cash prices on machine-readable files rather than estimates, increase maximum annual noncompliance penalties and give group health plans the right to audit and review claims data.
“I don’t know of one other industry where we’ve had to bring, at the federal government level, a transparency bill. Every other industry out there engages with an informed consumer,” Braun said. “The industry better take note that it isn’t normal to operate the way they do.”
In a statement submitted to the special committee for the hearing, the American Hospital Association (AHA) tied providers' need to raise prices to commercial insurer practices such as "improper" prior authorization denials. It also pointed to gaps in Americans' health insurance coverage that leave many in debt while forcing hospitals to eat the cost of charity care.
In regard to price transparency, the lobby said its members have "invested considerable time and resources" toward compliance, and 93% are meeting the requirements to post a machine-readable file, per data from Turquoise Health.
Still, AHA said it is "concerned" by legislators' calls to disqualify price estimator tools from qualifying for the Hospital Price Transparency Rule's shoppable services requirement and argued that the Centers for Medicare & Medicaid Services "clearly" has enough authority to update and enforce price transparency without additional laws.
AHA's submitted statement did not directly address issues lawmakers raised around unexpected facility fees or provider consolidation.