As the Trump administration pushes for price transparency in the hospital industry, executives from hospital operators HCA Healthcare Inc. and Universal Health Services Inc. said a new policy proposal that aims to force them to reveal the cost of certain services will have limited impact on their operations.
The Centers for Medicare and Medicaid Services proposed a rule July 29 that, among other requirements, would force hospitals and other healthcare providers to make rates privately negotiated with insurance companies public. The rule also defines what pricing information hospitals will be required to make public and proposes financial penalties for facilities that do not comply.
The proposal follows an executive order signed by President Donald Trump in June.
CMS Administrator Seema Verma told reporters July 29 that increased price transparency will help curb rising healthcare costs. Source: Associated Press |
CFO William Rutherford said the company "will stand up well on a price transparency view." He even hinted that the new regulations might provide the Nashville, Tenn.-based hospital giant with some business opportunities.
Rival hospital company Universal, whose earnings call occurred before the proposal was officially released, had stronger words for the administration's effort to make hospital rates public.
Universal CFO Steve Filton said July 26 that the company supports efforts to increase price transparency for patients, but would not give smaller insurers the same, lower rates given to larger providers if rates were publicly known.
"We're just not going to do it and no one is going to be able to force us to do that unless the government decides that they're just going to set prices all around, and I don't think [that's] going to be the case," Filton said.
The CFO said the regulation would not "change our everyday business practices by a great deal."
Filton added that forcing hospitals to make rates public may not even "prove to be legal," a position that has been taken by other members of the hospital industry including the American Hospital Association.
"Mandating the disclosure of negotiated rates between insurers and hospitals is the wrong approach," said Rick Pollack, president and CEO of the American Hospital Association, in a July 29 statement. "While we support transparency, today's proposal misses the mark, exceeds the administration's legal authority and should be abandoned."
Tenet Healthcare Corp., a Dallas-based healthcare facilities owner and operator, had little to say about price transparency on its Aug. 6 second quarter earnings call. CFO and Executive Vice President Daniel Cancelmi said that the company supports providing patients with more transparency, but did not speak in detail about the rule's impact on the company.
CMS Administrator Seema Verma told reporters on a July 29 call that increasing price transparency in the hospital industry will help curb rising healthcare costs and surprise medical bills. Verma dismissed concerns about a lawsuit from the hospital industry.
"This administration is not afraid of those things," she said.
Public comment for the proposed rule ends Sept. 27. If the rule is finalized, hospitals would be required to comply with the new regulations as of Jan. 1, 2020.
However, Verma told reporters Aug. 15 that CMS is going to review the public comments, and the agency might consider delaying implementation to give healthcare providers more time to comply.

