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Azar calls on hospitals to make list price information more useful


HHS Secretary Alex Azar said hospitals can do a lot more to help consumers understand the chargemaster list prices they are required to post online, shrugging off providers’ complaint that the information doesn’t shed light on healthcare costs.

Azar, speaking at the National Health Policy Conference in Washington Monday, said the policy to post list prices for hospital services online that started on Jan. 1 is the first step in a greater price transparency effort. But hospitals and experts have complained that posting the prices online won’t help consumers understand their costs.

But Azar shrugged off those concerns during his speech.

“To the extent that hospital list prices aren’t useful information to the patients they serve, well hospitals are the ones in the best position to do something about that,” he said.

Since the start of 2019, some hospitals chose to post a link to their charges on their homepage and others hid deeper inside their websites.

Some hospitals have complained that the information may not be useful to the public because the charges don’t factor in insurance coverage for an individual patient, which can lower the list price of a service.

So a growing number of hospitals have also started to roll out their own internal price calculators to help a patient estimate their out-of-pocket costs for a service like a surgery. Most price calculators take insurance coverage into account.

Azar added that the rule requires the information to be posted in a machine-readable format so that it can be “incorporated into apps that patient can use without going to the hospital’s own captive website.”

Currently, hospitals won’t face a penalty if they fail to comply with the chargemaster requirement.

The CMS is working to incorporate apps into its effort to boost price transparency, including the Blue Button 2.0 initiative where the CMS made it possible for seniors to share medical data with private sector app makers.

The app developers are then using the data to create user-friendly apps to help seniors understand their Medicare data, Azar said.

The CMS also recently issued a new app called “What’s Covered” that details for Medicare beneficiaries what procedures and services the program covers.

Azar also touched on the administration’s rule released last week that would end the safe harbor for rebates that drugmakers give to pharmacy benefit managers and insurers for drugs sold on Medicare Part D. Azar said that the proposed rule, which would create a new safe harbor for discounts that are provided at the pharmacy point of sale instead of via a rebate.

Without a safe harbor protection, drug rebates would be subjected to prosecution under the federal anti-kickback statute.

Azar said that the current rebate system is broken as it creates a perverse incentive for drugmakers to raise list prices in order to get covered by a PBM or insurer, who get a cut of the rebate.

“Every time you go pick up a drug at the pharmacy, there’s a lurking middleman no one tells you about, who’s getting a kickback that isn’t reflected in the price you pay,” Azar said.