By: HUB’s EB Compliance Team

On Monday, June 24th, President Trump signed an Executive Order aimed at increasing transparency in healthcare. A summary of the Order can be found here. This isn’t the first time President Trump has issued an executive order with the goal of changing the healthcare market, as we’ve discussed here. The Order, titled Improving Price and Quality Transparency in American Healthcare to Put Patients First, doesn’t take any specific action, but instead instructs the Secretaries of the Treasury, Labor, and Health and Human Services (HHS) (collectively, the “Agencies”) to consider proposing regulations or revising existing guidance in five key areas.

The bottom line is that just as with previous Orders, there is no immediate impact to employers from this Order. However, there could be a significant impact down the road.

Informing Patients About Actual Prices
This section of The Order begins by requiring the Secretary of Health and Human Services (“HHS”) to take certain steps aimed at transparency within 60, 90 and 180 days.

  • Within 60 days HHS must propose regulations requiring hospitals to publicly post standard charge information, including charges and information based on negotiated rates as well as for common items and services. The information must be in an easy-to-understand and consumer-friendly format and be updated regularly.
  • Within 90 days the Agencies shall issue an advanced notice of proposed rulemaking that would require healthcare providers, health insurance issuers, and self-insured group health plans to provide or facilitate access to information about expected out-of-pocket costs for items or services to patients before they receive care.
  • Finally, within 180 days, HHS along with the Attorney General and Federal Trade Commission must issue a report describing the ways that the Federal Government or the private sector are impeding healthcare price and quality transparency for patients, and provide recommendations for eliminating these impediments in a way that promotes competition.

Establishing a Health Quality Roadmap
Next, within 180 days the Secretaries of HHS, Defense, and Veterans Affairs must develop a Health Quality Roadmap that focuses on aligning and improving reporting on data and quality measures across government funded healthcare, including Medicare, Medicaid, the Children’s Health Insurance Program, the Health Insurance Marketplace, the Military Health System, and the Veterans Affairs Health System. The Roadmap will need to include a strategy for establishing, adopting, and publishing common quality measurements; aligning inpatient and outpatient measures; and eliminating low-value or counterproductive measures.

Increasing Access to Data to Make Healthcare Information More Transparent and Useful to Patients.
Next, the Secretaries of HHS, the Treasury, Defense, Labor, and Veterans Affairs, and the Director of the Office of Personnel Management, shall increase access to de-identified claims data from taxpayer-funded healthcare programs and group health plans for researchers, innovators, providers, and entrepreneurs. The goal of this piece is to facilitate the development of tools that empower patients to be better informed as they make decisions related to healthcare goods and services.

Empowering Patients by Enhancing Control Over Their Healthcare Resources.
From there, the Order switches gears and begins to focus on regulations issued by the Treasury.

  • Within 120 days issue guidance to expand the ability of patients to select high-deductible health plans that can be compatible with a health savings account (“HSA”), and that cover low-cost preventive care, before the deductible, for medical care that helps maintain health status for individuals with chronic conditions.
  • Within 180 days of the issue proposed regulations to treat expenses related to certain types of arrangements, potentially including direct primary care arrangements and healthcare sharing ministries, as eligible medical expenses under section 213(d) Internal Revenue Code.
  • Finally, within 180 days issue guidance to increase the amount of funds that can carry over without penalty at the end of the year for flexible spending arrangements (“FSA”).

Addressing Surprise Medical Billing
Finally, within 180 days the Secretary of HHS shall submit a report to the President on additional steps the Administration may take to implement the principles on surprise medical billing announced on May 9, 2019.

Takeaways
As a whole, this Order is different from previous Orders in that it doesn’t specifically focus on matters related to the insurance markets. Rather its focus is on the consumer and increasing transparency in the cost of providing healthcare coupled with other consumer friendly measures. This change in dynamic is important as multiple rules issued following previous orders have faced legal challenges, while these rules may arguably have bi-partisan support. Given the timing of the Order, it is possible some of these changes related to group health plans could be effective as soon as 2020.

Potential Impact to Employers
Employers often struggle with encouraging employee’s consumer awareness and responsibility. Open enrollment meetings often include an education competent around the cost of medical services encouraging consumer responsibility. For example, employers encourage employees to go to walk-in-clinics rather than the emergency room, to receive imaging services at stand-alone facilities rather than hospitals, and to try generic medications when available. Pricing transparency will provide significant and meaningful information to health plans, plan sponsors, and consumers to make informed decisions.

Finally, a component of the pricing transparency applies to self-funded programs. This would ostensibly create certain obligations of plan sponsors to disclose applicable pricing information. We would anticipate that the plan’s third party administrator would play a significant role in meeting these obligations. Additional clarity and guidance from the Agencies will be important and employers with self-funded programs should keep an eye on the development of the regulations in this area. HUB will continue to provide updated bulletins and guidance as more information become available.

If you have any questions, please contact your HUB Advisor. View more compliance articles in our Compliance Directory.

NOTICE OF DISCLAIMER

The information herein is intended to be educational only and is based on information that is generally available. HUB International makes no representation or warranty as to its accuracy and is not obligated to update the information should it change in the future. The information is not intended to be legal or tax advice. Consult your attorney and/or professional advisor as to your organization’s specific circumstances and legal, tax or other requirements.