The latest Healthcare Price Transparency Executive Order reaffirms the federal government’s commitment to ensuring that hospitals and insurers disclose actual healthcare costs rather than vague estimates.

This action aims to empower patients and create a more competitive market for consumers using health care services. However, plan sponsors and providers may garner greater value from those disclosures than patients/consumers.

The Challenges of Price Transparency Compliance

Despite previous mandates, compliance with hospital price transparency rules remained inadequate and inconsistent.

Executive Order 13877, June 24, 2019, required hospitals and health plans to maintain a consumer-friendly display of pricing information for up to 300 shoppable services, a machine-readable file with negotiated rates for every single service the hospital provides, and for health plans to post their negotiated rates with providers as well as their out-of-network payments to providers and the actual prices they or their pharmacy benefit manager pay for prescription drugs. Health plans were also required to maintain a consumer-facing internet tool through which individuals can access price information.

Recent data shows that less than 25% of hospitals fully comply with those existing requirements. Current data reporting often obscures actual costs through complex pricing structures or partial disclosures. The consequences of this lack of transparency are:

• Increased Fees: Without clear pricing, insurers and self-funded plans struggle to negotiate fair rates for services.
• Limited Cost Comparisons: Patient/consumers are unable to compare provider rates for specific services, let alone identify what portion of any charge that they will have to pay out-of-pocket.
• Billing Complexity and Disputes: Hidden fees and opaque pricing create administrative burdens for claims processing and reimbursement.

 This executive order strengthens enforcement by requiring:

• The disclosure of actual prices rather than estimates, making a comparison of charges easier.
• Standardized information, ensuring consistency across hospitals and health plans.
• Updated enforcement policies, ensuring that hospitals and insurers comply with transparency rules or face penalties.

Impact on Insurers & Self-Funded Plans

Insurers and self-funded plans have long faced escalating healthcare costs due to unpredictable and non-transparent billing practices. With healthcare expenditures being a top business concern, transparency is critical in driving cost containment and making informed coverage decisions.

For self-funded plans, clear pricing data offers:

• Better cost management: Understanding negotiated rates minimizes overpayments.
• Sustainability: Reducing excessive charges ensures long-term financial viability.
• Potential Reductions in cost: Increased transparency and competition among providers could reduce healthcare costs by as much as 27% on frequently used services.

The long-term impact of transparency could mean billions in collective savings for employers and insurers, reducing the burden of excessive healthcare expenses.

How aequum Helps Employers Navigate Transparency Challenges

aequum specializes in advocating for self-funded plans, third-party administrators (TPAs) and plan sponsors to combat unfair medical costs and ensure pricing transparency. aequum’s approach includes:

1. Disputing Inflated Charges

aequum actively audits claims, identifies excessive provider fees and disputes unjustified costs, ensuring significant savings while maintaining access to quality care.

2. Legal Advocacy & Claims Resolution

aequum’s legal experts assist in resolving billing disputes, defending against balance billing practices and ensuring that hospitals comply with price transparency rules.

3. Data-Driven Cost Analysis

Through proprietary technology, aequum provides insights into pricing trends and provider billing patterns, helping self-funded plans optimize spending.

4. Enforcing Transparency for Fair Pricing

aequum helps employers hold providers accountable, ensuring compliance with transparency mandates and reducing the risk of unexpected financial burdens.

Take Control of Your Healthcare Costs with aequum

With this executive order driving stronger enforcement of healthcare price transparency, employers and self-funded health plans must be ready to leverage these changes for cost savings and compliance. aequum helps you stay ahead by ensuring you navigate these new requirements effectively, protecting your financial interests while holding providers accountable.

Contact us today to learn how we can help you maximize the benefits of healthcare price transparency while safeguarding your health plan’s financial sustainability.