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President Trump’s Executive Order: Health Care Cost Transparency

 July 10 2019     Diane Cross

Recently, the “Executive Order on Improving Price and Quality Transparency in American Healthcare to Put Patients First” was signed by President Trump directing federal agencies to increase health care pricing and quality transparency – another major executive action impacting the industry. The order’s goal is to remove unnecessary barriers so that the health care pricing and quality of healthcare providers is easily understood and compared by patients. In addition, the executive order directs federal agencies to expand the function of Health Savings Accounts (HSAs), Health Flexible Spending Arrangements (FSAs), and High Deductible Health Plans (HDHPs), aiming to “enhance patients’ control over their own healthcare resources”. 

To achieve the executive order’s goal, the Departments of Labor, Treasury, and Health and Human Services are expected to issue guidance that: 

  • Requires hospitals to post their pricing and negotiated rates publicly in a manner that is consumer-friendly and easily understood;
  • Develops a Health Quality Roadmap to improve reporting on data and quality measures across Medicare, Medicaid, the Children’s Health Insurance Program, the Health Insurance Marketplace, the Military Health System, and the Veterans Affairs Health System; and
  • Increases access to de-identified data (in a manner that ensures patient privacy and security) to make healthcare information more transparent and useful to patients.

The executive order also instructs federal agencies to “issue an advance notice of proposed rulemaking…soliciting comment on a proposal to 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.”  While this could impact group health plan administration by requiring additional disclosure requirements, at this time the agencies are only directed to seek comments on a proposal (not yet ordered to issue proposed rules).

Lastly, regarding expanding the function of certain account-based plans (HSAs and FSAs) and HDHPs, the order directs federal agencies to issue guidance:

  • Expanding HDHPs to cover low-cost preventive care before the deductible is met for medical care that helps maintain health status for individuals with chronic conditions, and still be compatible with HSAs;
  • Expanding eligible medical expenses under section 213(d) of the Internal Revenue Code, with the potential to include expenses related to direct primary care arrangements or health care sharing ministries (so that such expenses can be reimbursed by an FSA, HSA, or HRA); and
  • Increasing the amount of FSA funds that can carry over to subsequent plan years (currently, up to $500 is permissible). 

Impact

The federal agencies have deadlines ranging from 60 to 180 days to propose guidance per the executive order. However, employers should keep in mind that the executive order only directs agencies to develop regulatory guidance; it does not create any new federal policies. That said, this is the beginning stage of the regulatory process. Any new policies will follow traditional rulemaking procedures where the agencies will first provide proposed rules open for public comment prior to enacting any final rules. This means that there is no immediate impact requiring plan sponsors to make any plan changes now. Employers should simply be aware that new guidance is expected as a result of the executive order. HORAN will continue to monitor and communicate updates accordingly.  

Please contact your HORAN representative with any questions.