Tag: healthcare providers

Between a rock and a hard place: medical-device stakeholders disappointed by cancelled CMS rulemaking

By Emmie Futrell, Class of 2018; Denise D. Burke, Partner at Waller

Another attempt at bridging the gaping lag between FDA approval for medical devices and CMS’s Medicare coverage determinations has been struck down, after a nine-month standstill.

CMS’s proposed rulemaking included a promising new program called EXCITE, or expedited coverage of innovative technology. The proposed rulemaking had not been made public in substance, and the reasons for its cancellation are still unclear.

CMS officials confirmed that EXCITE was intended to improve access to innovative medical-device technologies for Medicare patients.

Members of the medical-device industry, however, believe that EXCITE was patterned after a 2016 industry proposal that had been presented to CMS to correct the backlog.

The 2016 proposal, known as PACER, or the provisional accelerated coverage to encourage research initiative, suggested that CMS grant provisional coverage under Medicare for FDA-approved devices. This would ensure that patients could access innovative technology, while CMS could gather the information necessary for its own approval process.

The provisional coverage would also alleviate pressure on device sponsors, who would not suffer from having to bankroll expensive and highly specific clinical tests before devices are even on the market.

EXCITE is not CMS’s first attempt to reduce the backlog between FDA and Medicare approval for medical devices.

This backlog, which can sometimes last years, results from the independent statutory mandates that tie the hands of the respective agencies. FDA must ensure that the drugs and devices it approves are “safe and effective,” while CMS can only approve products for Medicare coverage if the products are “reasonable and necessary.” This coverage determination requires CMS to evaluate the necessity of devices for typical Medicare patients, which are generally more medically complex than those of patients in FDA clinical trials.

In 2011, the Department of Health and Human Services attempted to address the lag between FDA and Medicare approval by initiating a parallel review program. This program focused on increasing communication between CMS, the FDA and device manufacturers, including providing medical-device stakeholders and manufacturers with detailed information about the study data that each agency would require in the approval process.

It was believed that this would speed the review process by allowing manufacturers to tailor their studies to encapsulate necessary data for each agency.   Lack of resources, however, largely doomed this program before it was effectively launched. Critics have condemned the program, which only resulted in two approvals by CMS.

CMS’s cancellation of the EXCITE program is a strong indication that, for at least the immediate future, medical-device manufacturers will continue to suffer from the bottleneck between the FDA and CMS and experience lengthy delays between FDA approval and CMS reimbursement.

CMS unveils new bundled payment model

By Chase Doscher, Class of 2018; Elizabeth N. Pitman, Counsel at Waller; Zachary D. Trotter, Associate at Waller

Earlier this month, CMS announced the launch of the Bundled Payment for Care Improvement Advanced (BPCI Advanced) payment model.

This is the first Advanced Alternative Payment Model (Advanced APM) introduced under the Trump Administration and the start of the next generation of BPCI models offered through the Center for Medicare and Medicaid Innovation and authorized under the Affordable Care Act.  Under the MACRA Quality Payment Program, providers will be subject to Medicare payment adjustments through one of two tracks: Merit-based Incentive Payment System (MIPS) or Advanced APM.

Under MIPS, a provider may receive a negative, neutral or positive adjustment with the expectation that the majority of participants will experience either negative or neutral adjustments. The BPCI Advanced model, however, entices providers to participate in an Advanced APM by offering the potential for bonus payments under MACRA for those who meet or achieve certain benchmarks during a 90-day episode of care, including the all-cause hospital readmission measure and advance care plan measure.  As with other Advanced APMs, BPCI Advanced requires that participants assume some of the risk and ties payment to quality performance metrics and the required use of certified healthcare technology.

After cancelling an Obama-era proposal for converting certain of the BPCI episode models to mandatory bundled-payment models, the Trump Administration effort to maintain voluntary participation is an attempt to decrease the administrative burdens such models placed on providers. Voluntary participation in BPCI models, such as Comprehensive Care for Joint Replacement and the Cardiac Rehabilitation Incentive model, has been offered since 2016.

This new model will give providers, “an incentive to deliver efficient care,” Seema Verma, CMS Administrator, said. “BPCI Advanced builds on the earlier success of bundled payment models and is an important step in the move away from fee-for-service and toward paying for value.”

Thirty-two clinical care episodes will initially be included in BPCI Advanced, 29 inpatient-setting episodes of care and three outpatient-setting episodes of care and the potential for episode revision for new and existing participants beginning January 1, 2020.   The clinical care episodes include services such as major joint replacement of a lower extremity, percutaneous coronary intervention and spinal fusion.

BPCI Advanced performance period is from October 1, 2018 through December 31, 2023.  Participants joining in the initial stage may not exit prior to January 1, 2020.

Providers interested in at least one of the 32 clinical episodes to apply to the model have until 11:59 pm EST on March 12, 2018 to apply via the application portal.

Back to the Future: CMS revives Obama-era proposed rule on critical access hospitals

By Emmie Futrell, Class of 2018; Kristen A. Larremore, Partner at Waller; Amber Green Arnold, Associate at Waller

Since the 1997 Balanced Budget Act, which created the designation for Critical Access Hospitals (CAH), the requirements for Medicare and Medicaid participation for these rural facilities have largely remained untouched.  But, a recent decision by CMS to revive and finalize an Obama-era proposed CAH rule will change certain Medicare participation requirements for CAHs.

According to a recent rulemaking notice, CMS intends to issue a final version of the proposed CAH rule sometime in the next 17 months.

The CAH designation was created to protect financially vulnerable rural hospitals that provide vital care to rural communities and combat a string of rural hospital closures. However, the intervening years since 1997 have brought many changes to healthcare in the United States, and in June 2016 CMS issued a proposed rule in an attempt to modernize Medicare participation requirements for CAHs and other hospitals.

Highlights of the wide-ranging proposed rule include a requirement that CAHs maintain an infection prevention program, as well as an antibiotic stewardship program to promote the appropriate use of antibiotics.  CAHs would also be required to designate leaders for each of these programs.

CMS hopes these programs will result in a reduction in hospital-acquired infections, including those that may be drug-resistant, which can lengthen inpatient stays and result in increased costs to the Medicare program. However, critics of these proposed requirements have noted that many drug-resistant organisms come into hospitals from other settings and have questioned whether these anti-infection requirements will improve patient care if care delivered outside of the hospital setting is not subject to similar requirements.

The proposed rule also establishes an explicit requirement that CAHs comply with federal anti-discrimination laws — – a requirement already applicable to Medicare providers.  The proposed rule would address this disparity and seek to address reports of discriminatory barriers to access by requiring CAH facilities to adopt and implement nondiscrimination policies.

In addition, the proposed rule would clarify that each patient’s medical records must contain adequate documentation justifying the patient’s admission and continued hospitalization, support the patient’s diagnoses, and describe the patient’s progress and response to medications and services.  The proposed rule also clarifies that patients should be able to access their medical records in form and format requested by the patient, including electronically, if readily producible in that form and format.

In light of recent findings in a Bipartisan Policy Center report that was published in January 2018, CMS may consider additional revisions to the proposed rule.

The report considered the rural communities of seven upper Midwest states and the relationship between local communities and CAHs. The report indicated that, while in many of the smaller localities studied, there were still barriers to access of critical primary care services, CAHs would not necessarily be helpful in addressing such access issues in each rural community.

The report found that, in some instances, CAHs are not financially sustainable due to low occupancy of patients requiring inpatient services. Proposals are wide-ranging to correct this issue, but many proposals include modifying the CAH designation to allow these facilities to include primary care and other outpatient services in addition to the inpatient care that they are already required to provide.

Although the extent to which the Trump administration will finalize the rule as initially proposed remains unclear, CAHs should closely monitor developments for any new CMS proposals addressing CAHs and a final rule implementing changes, because CAHs continue to be a focus of lawmakers and healthcare policy advisors.

OIG Gives Green Light to Gainsharing Arrangement

By Brandon Huber, Class of 2019; Kim Harvey Looney, Partner at Waller; Justin Hickerson, Associate at Waller

A gainsharing arrangement between a non-profit hospital and members of a multi-specialty physician group has been authorized by the Office of Inspector General for the first time since the 2015 enactment of MACRA removed certain roadblocks from the expanded use of gainsharing in the healthcare industry.

An OIG advisory opinion issued earlier this month involves a proposed arrangement in which a non-profit medical center will pay certain neurosurgeons a share of cost savings realized by the selection and use of certain products during spinal fusion surgeries. Thirty-four cost-reduction measures were identified by the medical center based upon considerations of costs, quality of patient care, and utilization on a national level. Thirty-one recommendations involved standardizing certain devices and supplies used in spinal fusion surgeries. The remaining three suggested that the neurosurgeons use Bone Morphogenetic Protein for spine surgeries only on an as-needed basis.

The proposed arrangement established a three-year term, whereby the neurosurgeons would receive 50 percent of the annual cost savings, paid each year over the term of the arrangement. The compensation paid to the neurosurgeons would then be divided on a per capita basis, with the remainder being allocated towards paying the practice group’s administrative expenses. Other safeguards implemented under the arrangement included an oversight committee and a requirement that all patients be given written notice of the arrangement and an ability to review the details prior to the performance of their procedure.

In assessing the legality of the arrangement, the OIG examined the application of both the CMP and the Anti-kickback Statute. Regarding the CMP, although the OIG could not opine as to whether the arrangement would reduce medically necessary services, it found that, based on the methodology for development and payment of the cost savings, along with the monitoring and safeguards put in place, it would not impose sanctions.

Likewise, the OIG concluded that it would not impose sanctions under the Anti-kickback Statute because the arrangement presented a sufficiently low risk of fraud and abuse. The OIG based its decision on several factors:

  • the majority of the money received pursuant to the cost-sharing arrangement would be divided per capita amongst the four neurosurgeons, thereby reducing the risk that any particular physician would be incentivized to generate disproportionate cost savings;
  • there was no prohibition on using nonstandardized products, despite the product standardization recommendations; and
  • no other neurosurgeons from outside groups were allowed to participate, reducing the likelihood that the medical center would use the arrangement to attract neurosurgeons from competing hospitals to perform surgeries at its facility.

Although the opinion only applies to the parties who requested it, the opinion can serve as a valuable reference tool for those wanting to ensure future gainsharing arrangements are legally appropriate. Furthermore, this opinion highlights the OIG’s willingness to support gainsharing arrangements as the healthcare industry transitions from a fee-for-service model of care to a system which emphasizes value-based payments.

Veterans Choice Health Care Program Could Run Out of Funding

By William Dodd, Class of 2019

The Veterans’ Access to Care through Choice, Accountability, and Transparency Act of 2014, more commonly known as the Veterans Choice Program, is a U.S. public law that works to expand the number of healthcare options available for eligible veterans. Among many provocations leading up to the creation of the Program, one of the primary driving forces behind enacting the law was the Veterans Health Administration Scandal of 2014, which uncovered years of lies regarding the true wait times for veterans seeking medical care. Along with expanding medical staff and the number of VA facilities, one of the primary provisions of the Choice Program allows veterans living 40 miles or more from a VA clinic, or who are unable to get an appointment within 30 days, to seek treatment from a non-VA facility. In order to accomplish this, the 2014 Choice Program set forth $2 billion altogether, with $500 million specifically intended to increase the number of medical personnel in the VA system. The result of increased healthcare options after years of systematic failure led to an immediate increase in demand for healthcare services. Ultimately, the initial $2 billion proved insufficient to carry the program through to a long-term legislative remedy.

To combat the lack of funding for the popular program, as well as Congress’s failure to enact a timely and suitable long-term remedy, the Trump administration provided $2.1 billion in emergency funding to keep the Choice program alive. However, only weeks after the emergency funding was provided, it became clear that the program may require additional funding to avoid disruption of care for hundreds of thousands of vets. Based on estimates from David Shulkin, VA Secretary, the $2.1 billion in emergency funds will likely run out by mid-December of this year. In addition, Shulkin stated that any additional funding received would be used to bring facilities closer to where veterans live, which would continue to increase access to care for eligible veterans.

While pouring money into the Program may serve as the best option to temporarily meet the immediate demand – generated by years of lack of access to quality care – a long-term legislative fix is the best step to moving forward. As policy director for Concerned Veterans for America, Dan Caldwell, stated, “while Congress must quickly move forward on a temporary fix for the VCP budget shortfall, the Choice Program must ultimately be overhauled, expanded, and permanently reformed.” A long-term plan would likely save money through the creation of a sustainable, organized system to increase access for veterans across the board; however, before any such plan can be enacted, the immediate goal for lawmakers and the Trump administration is to meet to immediate demands of the current crisis.

After speaking with the Trump administration to address the issue of moving forward, Mr. Shulkin has promised to expand the Program during the 2018 year. Pursuant to Mr. Shulkin’s promise, President Trump has proposed an additional $2.9 billion increase in Program funding for the 2018 year, as well as another $3.5 billion in 2019. Along with increased funding projected over the next two years, proposed revisions in the Choice Program seek to eliminate the 30-day or 40-mile eligibility requirements to receive care from non-VA providers. Namely, this process would be done pursuant to the Veterans Coordinated Access and Rewarding Experiences (CARE) Act, a recent proposal from Shulkin. Along with eliminating the aforementioned eligibility requirements, the CARE Act would also include a “health risk assessment,” to be performed by VA personnel, in order to determine which provider – VA or private – will better meet the needs of the veteran-patient. The results of this assessment, as Mr. Caldwell stated, “will incentivize VHA facilities to become higher-performing health care providers through competition.” In Mr. Shulkin’s words, “at minimum, where the VA does not offer a service, veterans will have the choice to receive care in their communities.”

However, the CARE Act has experienced strong pushback from organizations, such as the American Federation of Government Employees (AFGE), on the basis that the CARE Act and similar proposals would “voucherize” VA in favor of private care. In response to this, House VA Committee Chairman, Phil Roe, stated that “this effort is in no way, shape or form intended to create a pipeline to privatize the VA health care system.” Moreover, in Shulkin’s words, “this is about building a VA that veterans choose for their care . . . We want veterans to choose VA.”

Other parties, such as director of the Schaeffer Center for Health Policy and Economics at USC, Dana Goldman, hold the exact opposite view. Goldman advocates for the VA’s complete integration into mainstream private healthcare through the provision of Platinum Plans under the ACA, which are required to cover 90% of the cost of all essential health benefits, and often include no co-payments or deductibles. According the Goldman’s estimates, the average annual cost of a Platinum Plan is around $5,000. If such plans were offered to every veteran under the age of 65, based on the $5,000 annual estimate, this plan would drastically reduce the amount paid annually for coverage of individual vets, which is currently around $7,700. Pursuant to Goldman’s reasoning, the cost savings could be directed towards specialized care for individuals with unique health needs, such as those who suffer from traumatic brain injuries, PTSD, and infectious diseases.

Currently, due to the organizational, administrative failure within the VA system, in regards to reimbursement within the private sector, many private providers have expressed a lack of interest in treating veteran-patients due to the lack of response, administrative hassle, and delayed payments in dealing with the VA. If Goldman’s plan caught on, the impact on private providers would be substantial. Already, more than 30% of VA appointments are made in the private sector. If complete integration were to ever take place, private providers would receive higher volume and guaranteed federal reimbursement for treating veteran-patients, and the VA could focus its efforts solely on administration and the provision of non-healthcare services. This plan would also eliminate the perpetual conflict in regards to whether veterans are receiving quality care, as well as the shortage of health professionals within the current VA system, as complete integration into private healthcare would offer all veterans an opportunity to seek out the best providers to meet their healthcare needs.  

Concerning where to go from here, for current VA attorneys, staff, and providers in the private sector, much will be determined in the coming months as proposals and reform measures continue to be set forth. With the VA system in its current state, proposed remedies range all the way from complete reform to complete integration. Unfortunately, little can be determined as of the current moment, and a wait and see approach is all anyone can do for the time being. As for the veterans in need of care, change cannot wait, and Congress needs to act quickly in order to ensure proper treatment and quality care for those who served and continue to serve our country valiantly.

CVS and Aetna Merger

By Brandon Huber, Class of 2019

According to the Wall Street Journal, CVS and Aetna are reportedly in serious talks over a potential merger between the two healthcare giants. With the potential buyout price in the ballpark of $70 billion, the deal would not only set the record for the largest merger of any two companies in 2017, it would easily be considered the largest health provider merger of all time, shattering Express Scripts’ $29 billion merger with Medco back in 2012.

The deal would combine CVS, currently the largest pharmacy retail chain, with Aetna, the third largest health insurer provider in the United States. Although both companies have declined to comment on the negotiations of the deal, there have been reports that a deal could be reached by the two companies as soon as December. Despite the growing pressure over the last few years on healthcare providers to consolidate, due in large part to soaring medical costs, a merger of this size promises to send a shockwave across the entire healthcare industry.

The merger comes on the heels of news that Amazon, the online retail giant, almost certainly will enter the prescription-drug market as soon as 2019. Although Amazon has not yet announced any official plans to enter the pharmacy retail business, there can be little doubt that even rumors of such plans would be enough to motivate CVS, and other pharmacy retail chains, to find creative ways to expand and grow.

CVS’ buyout of Aetna, at least from the outset, seems to present the perfect opportunity for both companies to benefit from the deal. On the other hand, however, whether consumers stand to gain any benefit from the merger remains to be seen. From Aetna’s perspective, the merger affords the opportunity to provide better care management. Insurers have long believed that the best way to control rising healthcare costs is to ensure they have more access into the lives of their beneficiaries. The deal would help Aetna ensure its beneficiaries were staying on their medicines, getting the care they need at more cost-effective locations—like a CVS health clinic—as opposed to a more expensive and perhaps unnecessary hospital visit.

Conversely, not only would CVS be able to expand its reach within the healthcare market, the deal would drive more traffic to its stores as more of Aetna’s insured beneficiaries would seek preventive care and treatment for less serious medical issues at the clinics located within CVS stores. Additionally, CVS could expect an influx of customers because Aetna’s beneficiaries would likely use CVS to get their prescriptions filled.

With that said, however, despite the near guarantee that both parties would benefit significantly from such a deal, there are some who remain skeptical as to whether the deal will benefit consumers. According to Amanda Starc, associate professor of strategy at Northwestern’s Kellogg School of Management, CVS’ position as a pharmacy benefit manager would allow the merged companies to negotiate lower drug prices with pharmaceutical manufacturers. It is unlikely, however, that these newly acquired drug-rates, now available to Aetna as a result of its newly acquired market power, would translate into lower prices for customers and not into profits for the company.

Combatting the Opioid Crisis

By Andy Cole, Class of 2018

Florida Governor Rick Scott announced on September 26, 2017, plans to introduce legislation that would limit opioid prescriptions to only three days unless a set of very strict standards are met. If the standards are met, then a seven day supply would be permitted. Currently, this bill has not been filed in the House or Senate, but a similar seven day limit bill has been filed.
This legislation follows President Donald Trump declaring the opioid epidemic as a national emergency and many other states and pharmaceutical retailers taking similar stances. Less than a week before Gov. Scott’s announcement, pharmaceutical retailer CVS announced that beginning next February it will limit opioid prescriptions to seven days for patients who are new to pain therapy. Additionally, the Pharmaceutical Research and Manufacturers of America has announced its support for a seven day limit on opioid prescriptions with exceptions for certain conditions such as cancer.
It is unclear if this legislation will pass as it is currently planned. If so, it will be the strictest opioid limitations in the country. Many states have passed seven day limits for first time opioid patients.
In Massachusetts, Governor Charlie Baker proposed a similar 72 hour limit on opioids for first time users. This proposal was met with much criticism from many doctors and advocacy groups who called the proposal “draconian.” The final product of the bill had overwhelming support from both parties. Baker, a Republican, signed the final bill after it passed unanimously through the Democrat controlled legislature.
Many state legislatures have found it hard to balance the need for doctors to maintain discretion and to curb a national crisis. Many doctors and organizations are calling for tighter restrictions that prevent overprescribing of opioids to patients who do not need the medication.
Dr. Steven Stanos, president of American Academy of Pain Medicine, said the academy “supports any initiative that would help limit the effects of over prescribing medications or leading to excessive unused medicines that could lead to harm to a patient or family members or their community.”
The trend of states seeking to regulate the amounts of opioids doctors are allowed to prescribe will continue to grow until the epidemic can be helmed. As many states look to begin drafting their legislative initiatives for 2018 and many politicians prepare for midterm elections, combating opioid addictions will undoubtedly be a bipartisan effort.
There is a possibility that many states will push for law similar to the law enacted in Massachusetts, which requires practitioners to take more steps to combat opioid misuse. The first point of the law is to limit opioid prescriptions to seven days for any new opioid prescription. This applies to all opiates Schedule II through Schedule VI. There are exceptions to this limit. Physicians can prescribe for more than seven days if the prescription is designed for the treatment of substance use disorder or opioid dependence, for inpatient prescriptions, for pain related to an acute medical condition, for chronic pain management, for pain associated with a cancer diagnoses, or for palliative care.
If a first time opiate prescription is being written for greater than a seven-day supply pursuant to an exception, the prescriber must document in the medical record the specific exception for which the opiate is being prescribed; and provide brief information about the actual condition or treatment that necessitates more than seven days; and indicate whether there were known and available non-opiate alternatives. The state has added an additional requirement for prescribing opioids to minors under the age of eighteen. For minors, the prescriber must also document that there was a discussion with the parent/guardian of the known risks with the specific prescription and why it is necessary for that condition/treatment. Additionally, prescribers must document in the medical record each and every time an outpatient opioid prescription is being issued to anyone.
This law moves beyond the prescription limit and also requires prescribers to check the Prescription Monitoring Program every time he or she schedules a Schedule II or III narcotic. The law also requires prescribers to complete training in pain management and addiction. In addition, it requires prescribers and patients to enter into a written pain management treatment agreement for prescriptions for extended-release long-acting opioids.
Finally, this law also places a new burden on pharmacists. If a patient requests a partially filled opioid prescription, the pharmacist must notify the prescriber within seven days. Then the prescriber is responsible for discussing with the patient the quantity of the prescription and the option to partial fill.
From an attorney’s point of view, it is important to make sure your client is aware of all of these changes and their new obligations under the law. While Tennessee has not enacted this type of law yet, combatting the opioid crisis in the state will be high on the legislative agenda for the next few years. A piece of legislation similar to this is bound to be at least be discussed by lawmakers as a potential route to take. At the moment it is difficult to tell how difficult it will be to monitor providers who may abuse the system.

CMS Proposes Change to Joint, Episodic, and Cardiac Rehabilitation Payment Models

By Emmie Futrell, Class of 2018; Patsy Powers, Partner at Waller; Daniel Patten, Associate at Waller

On August 17, 2017, CMS published a proposed rule that could bring about significant changes to some of its Innovation Center’s major payment models. Specifically, the Proposed Rule would:

  • reduce the number of mandatory geographic area participants of the Comprehensive Care for Joint Replacement (CJR) model;
  • cancel the Episode Payment Models (EPMs) and Cardiac Rehabilitation (CR) incentive payment model; and
  • increase the pool of practitioners that qualify under the Advanced Alternative Payment Model.

These changes may be surprising to some as these models are still in their infancy. The CJR model started last year, and the EPMs and CRs were not scheduled to begin until January 1, 2018.

Perhaps the most striking element of the Proposed Rule is the removal of 33 geographic areas (of the currently 64 geographic areas) where participation in the CJR model has been mandatory. Instead, CMS proposes that such hospitals participate in the CJR model on a voluntary basis, especially hospitals with low volume or those located in rural areas. These hospitals are provided with a one-time option whereby continued participation in the CJR model will be left to their discretion. CMS believes that moving the CJR model away from a mandatory requirement will increase the likelihood that providers will participate in future voluntary initiatives. Hospitals that choose to continue participation in the CJR model will receive a target price for these procedures from CMS each year, and the proposed rule includes refinements and clarifications to this payment process.

CMS is accepting public comments on these revisions, which can be electronically submitted here, until October 16, 2017.

Increased Price Transparency

By Zachary Gureasko, Class of 2017

On President Donald Trump’s website, one of his objectives is: “Require price transparency from all healthcare providers, especially doctors and healthcare organizations like clinics and hospitals. Individuals should be able to shop to find the best prices for procedures, exams or any other medical-related procedure.” President Trump believes that by allowing the individual to “shop around” for the best prices, competition among providers will increase and they will be forced to lower costs.

There are some organizations that already attempt to use existing data to provide consumers with cost estimates that they can use to make cost-informed choices. One such organization is FAIR Health, which is an independent, non-profit corporation whose mission is to promote cost transparency in healthcare costs. Using the website highlights some discrepancies in costs that would be helpful to consumers. For example, a procedure done in Nashville proper priced at $5,000 could potentially cost as low as half of that amount if it was performed more than 45 miles away from Nashville.

The health care industry has long been viewed as “hiding the ball,” so to speak, when it comes to the full prices of their services. Generally, the only information they offer before the patient elects to undergo a procedure or treatment is the immediate cost, such as a co-payment or deductible. Arguments have been made, even prior to President Trump’s call for increased transparency, for the provision of total costs to the consumer. The justification for this is that consumers with more information will be able to comparison shop and obtain the desired care for a relatively affordable price.

There are issues with price transparency from both provider and consumer perspectives. There are impediments to price reporting, such as contractual provisions preventing health plans from negotiating their rates with providers, as well as the indication that encouraging patients to be more price-conscious could have negative impacts on low-income consumers due to cost-shifting. Additionally, there is currently no standard structure for reporting prices, and the interplay between health care providers, insurance companies, and government agencies almost require some sort of formatted structure to be in place to enable providers to adequately report in a way that would achieve the intended result of these price transparency efforts.

Several studies have also shown that price transparency initiatives, such as requiring hospitals to publish the prices of their procedures and treatments up-front, do not truly lead to changes in either consumer behavior or pricing. This result is potentially attributable to a perceived correlation between high cost and high value, one that is not necessarily accurate in the health care industry as it might be in other industries. Another wrinkle in the fold from a consumer perspective is the notion that consumers will use price transparency tools in their decision-making. However, many consumers are unaware that such tools exist; moreover, even if they are aware of the tools’ existence, research has shown that this has little to no bearing on the consumers’ ultimate decisions or determinations.

As a final consideration, although efforts to increase price transparency are still in their early stages (and thus there is not enough data to form a fully conclusive study on their impact), not all health care services are amenable to “shopping around.” For instance, a person in an emergent situation will not be on his or her smartphone comparing the prices of different ERs. The person will assuredly utilize the nearest hospital with an emergency room. Emergency room services comprise a fairly substantial portion of health care costs. Therefore, it remains to be seen whether increased price transparency will truly increase competition or lower health care costs for consumers.