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Issue Brief: Health Care Transparency Executive Order

What Does This Mean?

On June 24, President Trump signed an executive order (EO) aimed at increasing transparency of pricing for hospital services, addressing “surprise billing,” improving healthcare data transparency, and expanding access to high-deductible health care plans in conjunction with health savings accounts. The EO does not trigger any immediate policy changes – instead it directs the Secretary of the U.S. Department of Health & Human Services (HHS) and other agency heads to undertake certain rulemaking procedures and to produce reports within specified timeframes.

What Will the EO Do?

The EO aims to increase transparency in healthcare prices by requiring hospitals to make charges for certain “shoppable services” available to patients and by addressing “surprise billing.”

  • Public Posting of Hospital Charges for Shoppable/Common Services: The EO focuses on price comparisons for “shoppable” services, which the EO defines as “common services offered by multiple providers through the market, which patients can research and compare before making informed choices based on price and quality.” According to the EO, the 73% of the 100 highest-spending categories were shoppable, and 90% of the 300 highest-spending categories were shoppable. The EO cites studies indicating a per-service savings of up to 19% for services that are shoppable.

    Pursuant to the EO, HHS will draft regulations requiring hospitals to publicly post charges (including those based on negotiated rates) for “shoppable” or common services. The EO further notes that hospitals will need to make pricing information for “services, supplies, or fees billed by the hospital or provided by employees of the hospital” available to patients in an “easy-to-understand, consumer-friendly, and machine-readable format using consensus-based data standards.” The Administration anticipates that this information will empower patients to comparison shop and to exercise greater control over their healthcare costs.
  • Surprise Billing: The EO also requires the HHS Secretary to provide a report on the implementation of the Administration’s efforts to reduce surprise billing (e.g., when patients receive large bills from out-of-network providers they could not select in advance) through improved cost transparency.

The EO also focuses on healthcare data transparency more generally. It requires the creation of Health Quality Roadmap, which will “align and improve” data and quality reporting across public programs by streamlining and standardizing quality measures, and increases access for researchers, innovators, providers and entrepreneurs to “de-identified claims data from taxpayer-funded healthcare programs and group health plans.”

Finally, the EO requires that HHS produce guidance that increases patient access to high-deductible health plans that cover “low-cost preventive services” before the deductible and can be used in conjunction with health savings accounts.

What’s Next?

The EO does not provide detail on how the new policies will be implemented. Instead, those decisions will be left to HHS and other regulators. There are number of questions the HHS will need to address, including:

  • Which services will be considered shoppable?
  • Will both inpatient and outpatient procedures be included?
  • Will hospital-affiliated or owned sites of care be included?
  • Will medication costs be included?
  • How will hospitals be required to report and update charge information?

The timelines for agency action vary by policy proposal – for instance, HHS has 60 days to propose a regulation requiring hospitals to post charges for shoppable procedures, but 180 days to produce a report on surprise billing. Thus, it will be months before any policies are formally implemented. ASHP will review the proposed transparency rules as they are published and update members accordingly.