ON-THE-RECORD PRESS CALL
BY SENIOR ADMINISTRATION OFFICIALS
ON NEW ACTIONS TO INCREASE HEALTHCARE PRICE TRANSPARENCY
Via Teleconference
9:03 A.M. EST
MR. DEERE: Thank you, Operator. Good morning, everyone. And thanks for joining today's briefing call on new actions the President will take to increase healthcare price transparency later this afternoon.
You will be hearing from, today, White House Domestic Policy Council Director Joe Grogan, as well as HHS Secretary Alex Azar, and CMS Administrator Seema Verma. All of them are on the record, including their opening remarks as well as Q&A when we get (inaudible). Anyone else you will hear from in the Q&A portion will be subject-matter experts on background as administration officials.
The contents of the call are embargoed until its conclusion. With that, I will turn it over to our Domestic Policy Council Director, Joe Grogan.
MR. GROGAN: Thanks, Judd. Today, the Trump administration is announcing groundbreaking action on healthcare transparency pricing. At 2:00 p.m., the President will be announcing two rules, one final and one proposed, to give the American people more insight into the prices that they are being charged for healthcare procedures, the result of an executive order signed June 24th.
Before we get into the details, I want to let you know how we got here with this President. President Trump is consistently non-ideological in confronting difficult problems and directing his team to make sure that the American people are not getting taken advantage of. While the last administration had a singular focus on the Affordable Care Act, this administration has a much wider aperture in confronting healthcare problems, many of which have been ignored by both Republican and Democrat administrations for decades.
We are focused on protecting the most vulnerable, including those with preexisting conditions, protecting and improving Medicare, modernizing this program for the 60 million seniors and Americans with disabilities who are so dependent on the program. And we're fighting to make healthcare more affordable, and we have lowered drug prices for the first time in 50 years, according to the consumer price index.
We're increasing choices and control for patients' own healthcare decisions, and putting the patient at the center of every decision of every policy choice that we make. The President has confronted numerous problems that are difficult and many administrations would have avoided tackling. The opioid crisis has seen us devote tremendous amount of resources in dollars and bandwidth and personnel to drive opioid morbidity rates down. We’re improving treatments for those with severe mental illness.
And recently, Administrator Verma approved the first IMD waiver for those with severe mental illness in the Medicaid program in Washington, D.C.
We’re advancing kidney health and improving that program for the first time since the Nixon administration. The President has targeted eliminating HIV transmissions over 10 years, finding cures for pediatric cancer, modernizing flu vaccine development, amending Stark and anti-kickback rules to allow for value-based care and creative contracting. And soon, in the next few months, we’ll be talking -- we’ll be unveiling and finalizing the interoperability rule for electronic health records, which has stymied the ability to share information among doctors.
This President is willing to be disruptive if it means doing the right thing for the American people. And make no mistake about it: This rule today will irritate many vested interests in Washington, D.C. who constantly lobby for more opacity in the healthcare system.
What he’s doing today on transparency is a perfect example of his willingness to tackle tough problems. What is more clear and more sensible than saying a patient should be able to know what their care is going to cost before they go to the doctor?
The President is not going to be dissuaded by the special interests who will try and fight this. And he’ll be announcing this action at 2:00 p.m. today.
The President wants to give Americans more information and more control over their healthcare decisions, improve the ability of patients to identify high-value care, and force providers to compete on price as well as quality.
In the long run, this will improve healthcare and make it much more affordable.
With that, I’ll turn it over to Secretary Azar.
SECRETARY AZAR: Great. Thank you, Joe. And good morning, everyone. Thank you for joining us on this call today. As Joe just mentioned, President Trump has a huge range of healthcare accomplishments, and we’re announcing new ways to improve the American people’s healthcare and their health just about every single week.
But our price transparency announcement may be a more significant improvement to American healthcare markets than any other single thing the Trump administration has done, and perhaps the most transformative shift toward patient control in healthcare that any President has ever enacted.
The President has made four healthcare promises: protecting vulnerable patients like those with preexisting conditions, and delivering the affordability you need, the options and control you want, and the quality you deserve. There’s only one way to deliver all of those outcomes at once, and that’s to drive better value from our system.
Driving toward value-based care has been a bipartisan priority for some time, but too often these efforts have left the patients out of the picture. American patients have been at the mercy of a shadowy system with little access to the information they need to make decisions about their own care.
From the beginning of President Trump’s term and my tenure as Secretary, we have been clear: This shadowy system has to change; the patient has to be in control. That requires giving the patient the right to know what they’re going to owe for a healthcare service before they ever get it.
The vast majority of patients don’t have easy access to this information today, but when they do, we see prices drop. In one study, when prices for imaging were made transparent, prices dropped almost 20 percent, while price disparities across providers also narrowed.
We know that 70 percent of the most common hospital services already are shoppable. We also know that in markets, it often takes only a minority of customers to be especially price-conscience consumers in order to drive price competition.
Shedding light on price information is absolutely vital not just to delivering better care at a lower price, but also to building the healthcare system the President has envisioned -- a system that's not only affordable, but also personalized, patient-centered, puts you in control, and treats you like a person, not a number.
That’s a stark contrast to the system we have today, which keeps patients in the dark about cost and quality information.
According to one poll, 93 percent of us have found ourselves surprised by a healthcare bill in 2018. Two-thirds of healthcare providers cite price transparency as a “limited or non-existent priority” within their organization.
If you’ve ever tried to find out the price of a healthcare service and what you’re going to owe for it out of pocket, you will not be surprised by those findings. I am the Health Secretary and I have found myself unable to get this information when I or a family member need care.
We know this information matters to patients. One poll found that almost two-thirds of patients now rate cost as “important or extremely important” when considering whether to follow a doctor’s recommendation.
President Trump has heard how frustrating it can be for patients to be kept in the dark about how much their healthcare is going to cost. The President has promised A-plus healthcare transparency. Right now, our system is not delivering the information patients need. President Trump is going to change that in what will be a transformative shift toward patient control of our healthcare system.
First, HHS, the Department of Labor, and the Department of the Treasury are proposing today to require that your insurer provide you with real-time access via an online tool to cost-sharing information, an estimate of what you would owe for all covered healthcare items and services. This is information patients typically receive after they actually get those services through an explanation of benefits.
We’re also proposing to require that insurers’ negotiated rates for in-network services and their historically paid amounts for out-of-network services be made publicly available to consumers, employers, researchers, and app developers.
Researchers and entrepreneurs would be able to use this data to deliver comprehensive information to consumers about cost information for the care they need.
When I first identified transparency as a key part of value-based transformation, I said, "You should have the right to know what a healthcare service is going to cost and what it's going to cost you out of pocket." That's what our proposed insurer rule will do.
Second, we're finalizing a rule to require that, starting January 2021, hospitals will have to disclose publicly their negotiated rates for services as well as the discounted cash price they're willing to pay. For the most common shoppable procedures, this information will have to be available in an easily accessible, patient-friendly format. For all procedures, this information will have to be posted online in a machine-readable format so that it can be incorporated into third-party tools, such as smartphone apps.
The top priority is making this information as accessible and usable for patients as possible. Hospitals will have to place the price information for common procedures in a prominent place online, in plain language, in a searchable format. A procedure's price will have to be grouped with the charges for any ancillary services the hospital customarily provides with that service.
Our two announcements today are historic changes to the power of American patients to take control of their care and get better value in healthcare. But there are more steps to come. We're also working to put patients in control of their own health data through interoperable health IT, as Joe mentioned, to provide more usable, quality information and to reform payments so we're paying for outcomes rather than procedures.
Putting all these efforts together, President Trump is delivering a new era of transparent, affordable healthcare with the American patient in control.
CMS, our Centers for Medicare and Medicaid Services, has been pursuing every avenue we have to put patients in control. So I'd now like to hand things over to Administrator Verma to explain more details on these two rules and also how they fit into all of CMS's comprehensive work on transparency.
Administrator Verma?
ADMINISTRATOR VERMA: Thank you. Well, first, I want to extend my gratitude to President Trump for leading with a bold vision to create a more competitive market and return patients to their rightful place at the center of American healthcare.
The President's executive order on price and quality transparency is transformative, and I deeply appreciate the President's personal commitment to this issue.
Our goal is straightforward: Patients need to have the right information at the right time and at the right place. The healthcare system has a duty to ensure patients know the cost of their care before they receive it.
Today's healthcare paradigm has too often catered to the demands of powerful special interests that profit from the status quo of hidden pricing. Some will complain that price information is proprietary to their business, but I will remind everyone that this information is already available to patients in their explanation of benefits. We are simply requiring that it be made available before they get their care, instead of after.
As healthcare costs skyrocket, we stand in desperate need of the sort of system-wide downward pressure on costs that can only come from empowering patients with access to price-transparent options.
The rules that we are announcing today represent the realization of that long-held objective. As you know, we delay the final rule impacting hospitals because it was important to see how these complementary rules -- one applying to hospitals, the other to insurers -- work together.
As I will explain, the hospital rule allows virtually every patient who receives care at the hospital, whether insured or uninsured, to know the price up front. But we heard that insured consumers, not just those who are treated at a hospital, also need to know their potential out-of-pocket costs. So our proposed rule, in turn, builds on that by requiring insurers to be transparent on out-of-pocket costs.
Taken together, virtually all Americans will feel the benefits because now, whether you're insured or not, whether you're at the hospital or just planning a routine checkup, all the information you need to know about the hit to your pocketbook will be only a few clicks away.
As you know, starting this year, CMS required hospitals to post all of their charge information online. In keeping with the President's executive order, the rule finalized today makes that information more (inaudible) patients.
Starting in 2021, hospitals across the country will be required to post publicly their standard charges for all hospital items and services, which include gross charges, the negotiated rates that insurers actually pay for services, the minimum and maximum negotiated charges, and the discounted cash price the hospital is willing to accept directly from a patient.
These prices must be posted online, in a single machine-readable file that also includes information such as common billing or accounting codes used by the hospital and a description of the item or service so that the public can make apples-to-apples comparisons.
Consumers will particularly benefit from the second requirement we are finalizing. Hospitals must share price information for at least 300 common shoppable services, which are services that can be scheduled in advance, including more complex bundled ones like joint replacements. This will allow patients to go online and search the name of a service like "MRI" or "C-section delivery" and see how much it will cost.
We heard concerns expressed by the hospital community about the tighter timeframe under the proposed rule and are responding by moving the effective date to January 1, 2021. We want hospitals to have the time they need to deliver the high-quality, consumer-friendly product patients deserve.
In short, under this rule, anyone walking into a hospital will be able to know the price up front. But as I've mentioned, this doesn't tell someone how much they should expect to pay out of their own pocket. And that's where the Transparency in Coverage proposed rule comes in. The proposal would require that group health plans and issuers operating in the individual and group markets make available to patients a tool that offers a personalized, out-of-pocket cost estimate for all healthcare items and services so patients can know the price to expect and plan accordingly based on their insurance plan and where they are in their deductible.
Additionally, plans and issuers would have to make public a regularly updated data file that provides allowed amounts and negotiated rates between payers and providers for all those covered items and services.
Price transparency would be extended to every healthcare item and service that is covered by a health plan. We recognize that the data made available under the final and proposed rules issued today is a large set for consumers. Unleashing this data will unleash innovation. Employers, researchers, and developers can use this information to develop tools that will drive down costs and improve quality.
And, finally, we are proposing to enable health plans to incentivize consumers to use this data to shop for low-cost, high-quality healthcare.
Ultimately, it's no secret that the foremost issue facing our healthcare system is cost. Anti-competitive policies that concentrate control over the system with the big players -- whether it be powerful private interests or Washington, D.C. itself -- have already failed. Doubling down will only make it worse.
This administration is reversing course. Instead of concentrating control, these rules disperse it to the people who should have had it all along: patients. Unlike the many failed big-government experiments of the past and the ones looming on the horizon, these transformational price transparency rules get at the root of the problem of cost. They empower consumers to seek higher value at more affordable prices. The long-overdue result will be a vigorous, vibrant market that improves healthcare for all Americans.
And before opening up for questions, I want to be sure to thank all of my CMS staff, our partner agencies, the White House team, the Departments of Labor and Treasury, and everyone who contributed for all the incredible work they did to make these rules a reality.
MR. DEERE: Thank you, Administrator. Operator, we will now begin the Q&A portion.
Q Good morning. This is Toby Capion calling from EWTN. It seems like most of the savings from prescription drugs come from generics, which were already relatively cheap. What are you doing to bring down the price of the brand-name drugs?
MR. GROGAN: This is Joe. I think it's important to -- two points are important on that, and then if the Secretary wants to say something.
One, it is a management achievement to have cleared out the generic backlog that existed at FDA. And that's a testament to the Secretary's leadership and the leadership at FDA to get more competition into the drug market. That is not to be minimized. This is an administration that believes in choice and competition.
The other important point is, the President's megaphone and focus on drug pricing has interjected more vigorous negotiations into the private chain. And we've heard this from both payers and drug companies how much more difficult the price negotiations are. And that is driving down prices as well.
But we can get back to the subject of the call, on transparency.
Q Hi. It's John Tozzi from Bloomberg News. Thanks so much for taking the question. Do you have an estimate or some kind of model that shows how much prices or how much total healthcare spending you project will decline once these transparency reforms are in place?
SECRETARY AZAR: We don't have that modeling of impact because, of course, we've never experienced this level of transparency that's being either implemented with regard to the hospital prices or proposed with regard to insurance disclosure across the whole healthcare system.
We have examples, of course, such as the case I mentioned in my opening remarks out of New Hampshire, when transparent information around, say, MRI procedures was made available on prices and you saw a 20 percent price decrease and price compression among various providers reducing disparities.
So that would certainly be, directionally, an example.
ADMINISTRATOR VERMA: (Inaudible), also the state of Kentucky, their public employee benefit program, they have price transparency, and their shared savings show that it saves state taxpayers about $13 million since they created that in 2015. And almost $2 million in cash benefits have been shared with the state employees because of their transparency efforts.
Q Hi, this is Chelsea Cirruzzo from Inside Health Policy. Thank you so much for having this call. My question is: In comments on the proposed hospital price transparency rules, hospitals said CMS lacks the authority to implement the rule. Are you expecting any litigation?
SECRETARY AZAR: We may face litigation, but we feel we’re on a very sound legal footing for what we’re asking. And we certainly hope that America’s hospitals will want to respect their patients’ right to know what the price of the service is before they’re asked to purchase it. I would certainly hate to see the hospitals take a play out of big pharma’s playbook and oppose transparent pricing information for the American patient.
Q Thank you. This is Susannah Luthi with Politico. My question has to do -- obviously, there is surprise billing legislation kind of stalling in Congress. Do you see that these transparency rules -- especially like the cash price being required to be posted by the hospitals -- do you see that as eliminating the need for surprise billing legislation?
And then, second part of the question, which part of ERISA law are you using to kind of secure the insurance rules against legal challenge? Thank you.
MR. GROGAN: This is Joe. On the first point on surprise billing: We don’t agree with the assessment that it's stalled. We’ve actually been in very fruitful discussions with both the House and the Senate this week on surprise billing.
And I think it is a great example of why we need to move in this space. It’s outrageous that somebody would be going into an emergency room thinking they're covered, expecting some predictability in their price, and then they get walloped with a huge bill because somebody was out of network and they had no ability to bargain when they had to go into an emergency room and couldn’t sit there and try and figure out who’s in network and out of network.
So, surprise billing is a great example of something that needs to be confronted, and this administration has been leaning in.
This is a complement to our efforts in that area, and I think it’s important to realize that we are going to be pushing on transparency in all facets of healthcare. There will be more -- whether it’s in the drug pricing chain, in some of the stuff that we’re working on, on the Hill, on the drug pricing legislation to improve transparency there, and other things that we’ll be doing in various roles. But transparency is not a one and done for us. It’s a charge in all the things that we’re pursuing.
ADMINISTRATOR VERMA: And also, speaking to the legal authority, we’re relying on Public Health Services Act 2715(a), not ERISA.
Q Hi. Thanks. This is Julie Appleby at Kaiser Health News. So you mentioned that hospitals, starting in 2021, need to post all these different prices, including the gross charges, the negotiated charges, et cetera, et cetera. Will those be -- how often will those be updated? How current will they be, I guess, is my question.
And then the second part of that question is: The industries have argued that this type of transparency may actually lead to higher prices in some cases, and I wondered if you would address that as well.
So again, the questions are: How current will these numbers be? And then, how do you address the concern from the industry that will actually cause prices to go up, in some cases?
SECRETARY AZAR: So the hospitals will need to update their information at least annually. But, of course, they can do so more frequently, especially if they decide to move towards competing on price with each other for patient access.
In terms of this argument that somehow disclosing prices leads to higher prices, this is a canard. Point me to one sector of the American economy where having price information in a competitive marketplace actually leads to higher prices as opposed to lower prices. When you have opaque pricing, when you have backdoor rebates and discounts, that’s what leads to higher list prices. That’s, for instance, the example we see in the drug industry with their pricing practices.
When we have transparent pricing information, we actually enable a marketplace. We empower patients as consumers. We create shopping, and prices go down. Every example points to prices doing down in these instances.
And this information -- you know, right now, this information is available. This is important for everyone to realize: This is not secret information. It is available. This information is provided every time you go to the hospital and you get an explanation of benefits 30 days later in your mailbox. It shows you the list price, the negotiated discount under your health plan, and what you would owe out of pocket.
There actually are vendors who collect that information to provide competitive market intel among hospitals and insurance companies. The only people who don’t know what the negotiated rates are and what they will owe out of pocket is the patient in our system. And that’s what President Trump is working to deliver today.
Q Hi, this is Bertha Coombs from CNBC. I’m just wondering whether you all have a cost estimate as to how much it will cost for hospitals and insurers to do this kind of overhaul for this.
ADMINISTRATOR VERMA: Yes, there is, in our rule, a regulatory impact analysis. It’s a very tiny, you know, percentage of their overall revenue -- less than 1 percent.
And I also will add that there are many hospitals out there and insurance companies that are already providing this type of price information. They’ve already done it voluntarily. And the impact analysis shows this is a very tiny list for hospitals.
Q Hi. Thanks for taking my question. This is Robert King with Fierce Healthcare. I wanted to piggyback on that last question a little bit. Is there going to be any consideration or exemptions for rural and smaller facilities, which might have a harder time complying with this rule compared to larger systems?
ADMINISTRATOR VERMA: So we did the regulatory impact analysis and we did look at the impact on rural areas as well. And it was literally 0.03 percent of their revenues. So it’s, again, a very, very tiny impact and effort required.
I will also add that the administration has been very focused on regulatory burden at large. Our Patients over Paperwork initiative has saved the healthcare system almost $8 billion, and so we are very conscious of this and did an extensive analysis, and the data show that this is a very tiny impact.
Q Hi, thank you for holding this call. Two questions. One is: Will these estimates be in any way binding? Because there have been complaints from people that they get an estimate -- you know, if they're having an elective procedure, they get an estimate from the hospital and sometimes open their -- I guess they get it from the hospital -- and sometimes what they actually get charged is wildly different, even though they didn’t have any consultations or any additional procedures done.
And second of all, will this estimate for people who have co-insurance rather than co-pays, will the insurers be required to base these estimates specifically per hospital or per facility? Because if you're trying to have consumers shop around, they need not only to be personalized to them, but personalized to the facility.
ADMINISTRATOR VERMA: So the rules work together in that, on that on the hospital side, they’re posting their standard charges in a variety of different ways, as we specified in the rule. And then, the rule that applies to insurance companies is personalized for that person depending on their plan, depending on where they are with the deductible. These are not binding, but they are required to be the best estimates, given the appropriate information at that time.
Q Hi, this is Samantha Liss with Healthcare Dive. I just had a question. For the insurers that are going to have to disclose publicly the negotiated rates, is that for every service or -- because I know for hospitals, it's the 300 shoppable services. So I was just trying compare the two. What will the insurers have to provide?
SECRETARY AZAR: Yes. So, actually, just to correct on that: For both hospitals and insurance companies, it would be all services. For hospitals, it would be the three hun- -- they also -- so there's a single data file with all services, negotiated prices, et cetera, that needs to be provided. But in addition, for the 300 most shoppable services, those need to be provided in a consumer-acceptable format, not just in a single machine-readable data file.
And the same with insurance companies -- that there needs to be disclosure of all their rates and negotiated information available so that consumers, data analytics, app developers, et cetera, have access, but also that they provide their information in a consumer-accessible format, as the Administrator was just discussing, for the patient to be able to go in an Internet-based approach to find out what a service -- the estimate of what a service should cost, what it should cost them in terms of where they are in their deductible period during the year, and depending on which facility your providers are going to.
ADMINISTRATOR VERMA: And the other thing I would just build on that is that, on the hospital side, all of these charges and services are going to be organized by CPT code. And we recognize that not every consumer will know the CPT code, which is why we also have that separate list, which is shoppable services, so people can just put in the item -- like an MRI or a C-section, or you know, hip replacement surgery -- things like that, that are more, I would say, consumer-friendly terms.
So that’s why we divided it in both. I will also add that the list does include pharmacy services as well.
Q Hi, this is Shannon Firth from Medpage Today. Can you talk a little bit about what new responsibilities, if any, doctors will have specifically while you're -- when hospitals are providing these services? What duty will they have to explain all this to their patients?
And also, can you explain -- I think someone mentioned that employers might be incentivized -- or employees might be incentivized by their employers after this information has disclosed to -- in a way that would drive down prices. Can you expand on that piece of the rule? Thank you.
ADMINISTRATOR VERMA: So to the first question, this administration wants doctors to be able to spend as much time with patients as possible, and their time shouldn’t be spent at a computer screen, but face to face with their patients. So this does not impact doctors directly.
For those hospitals that have employed physicians, those services would be required. That information, in terms of the services that the doctor is providing, will be required to be posted online. But this doesn’t impact doctors in any way. So, I think that was the first question that you had.
The other piece that we talked about in terms of the incentives is that we're allowing health plans to create the types of plans that would create incentives for people to (inaudible) this information. So, for example, they could have a plan that says if you seek out the lowest-cost provider -- the high-quality, low-cost provider -- they could potentially reduce co-pays. And as part of that reduction, they could include those costs in their medical loss ratio calculation.
So I think one of the things that we said is we want to make sure people have the right -- you know, the information at the right place, at the right time. But we also recognize that we want to give them incentives to use this type of information to make the best decisions that work best for them and to allow the insurance companies to actually create those incentives.
MR. DEERE: Thank you, Administrator. Operator, with that, we will conclude today's call.
Just a reminder to all those listening that it was all on the record, including the opening remarks, as well as the question-and-answer portion. I do want to thank Secretary Azar, Administrator Verma, and Director Grogan for participating today. And the information is embargoed until this conclusion. So, thank you very much.
END 9:38 A.M. EST
|
No comments:
Post a Comment