Recent ruling bolsters NC State Treasurer’s Clear Pricing Project

American Hospital Association and NC Hospitals Association both say transparent pricing won’t help consumers

North Carolina State Treasurer Dale Folwell takes the oath of office to be sworn into office on Saturday morning. The ceremony has limited in-person attendance due to COVID-19.

RALEIGH — A court ruling upholding a Trump administration executive order for increased transparency in healthcare pricing may further bolster State Treasurer Dale Folwell’s pricing transparency program, known as the Clear Pricing Project.

The court ruling upheld a Trump administration’s executive order requiring hospitals treating Medicare patients to disclose the rates for services negotiated between the hospital and the insurance companies. The goal of the order is to make health care costs transparent, which in turn is expected to lower costs through increased competition.

“This court decision gives us a real path forward to getting rid of secret contracts and pushing the power down to the consumer to make informed decisions when purchasing health care,” Folwell said in a statement. “Health care is the only thing in your life that you purchase that you really don’t know its cost or value. Having clear pricing will go a long way toward decreasing the cost of medical services in this country.” 

Announced in 2018, the Clear Pricing Project’s (CPP) transparency is like that sought by the Trump order. Folwell’s release says the CPP was created to shift away from a commercial-based payment model to a reference-based, transparent pricing model tied to Medicare rates. 

“We’re still getting boycotted by the healthcare cartel,” Folwell told North State Journal, referring to the North Carolina Hospitals Association (NCHA).

The NCHA pushed back on the CPP and were behind a graffiti campaign on sidewalks outside the N.C. General Assembly in July of 2019. The graffiti messages were chalk stencils that read, “720,000 voters want you to protect their healthcare.” The website address redirected to the NCHA, which claimed responsibility for the messages. The bill mentioned, H.B. 184, sought to stop the CPP but died in the Rules and Operations Committee of the Senate.

State Health Plan (SHP) members have been encouraged to use CPP providers, and the SHP’s Board of Trustees has approved SHP design changes for 2021 that the treasurer’s office says will “highlight CPP providers as those who support transparency and affordable health care.”

Around 26,000 health care professionals are taking part in the new network so far, and Folwell said 1,000 new providers were added during the recent open enrollment. The SHP overall covers a wide array of around 750,000 state employees, including active and retired state employees, and their dependents.

“These providers who have signed up for clear pricing are going to be in the right side of history,” Folwell said. “Being able to drive patients to people who don’t want anything to do with secret contracts anymore is a value to the provider, it’s a value to the patient and it’s a value to the State Health Plan.”

According to the press release by Folwell’s office, members will be able to visit a CPP Primary Care Provider for a $0 copay versus the current copay of up to $45. Additionally, CPP specialist rates may be as low as $40 instead of the current $80 to $94. 

The move towards medical pricing transparency by the Trump administration was legally challenged by the American Hospital Association (AHA), alleging the rule was outside statutory provisions of the Affordable Care Act, and it also constituted a violation of the First Amendment. AHA lost the case in June 2020 in federal court, and in late December, a federal appeals court upheld the ruling after an appeal was filed by AHA. The AHA has also filed an emergency stay motion to stop the new pricing rules, which when into effect on Jan. 1.

Regarding the lawsuit, Folwell said it was “sad” because “we shouldn’t need a law or executive order to tell us what’s right and what’s wrong.”

In a statement, AHA’s general counsel Melinda Hatton said, “The AHA continues to believe that the disclosure of privately negotiated rates does nothing to help patients understand what they will actually pay for treatment and will create widespread confusion for them.”

Hatton also said such disclosure “will accelerate anticompetitive behavior among commercial health insurers and hinder innovations in value-based care delivery.”

Cynthia Charles, vice president of communications and public relations for NCHA, said their organization agreed with the AHA’s statement.

“We agree with the AHA’s statement on the new rule, which creates another unfunded burden on providers with little return to our patients,” Charles wrote in an email to North State Journal. “The data is already available in a similar format on the State’s transparency website, yet receives little traffic.”

Charles said that regardless of the new rule, it is most efficient for patients to contact hospitals directly to get information needed to make informed decisions about care, and that “we are happy to help them.”

Charles said that “compiling and displaying negotiated rates for each health plan with which the hospital contracts is burdensome to hospitals,” especially during COVID-19.

“No other industry has been expected to divulge negotiated rates between the business and the vendor, including those who provide other, non-healthcare services to government entities,” said Charles in the email. “Some elected officials who point to our costs are ignoring their own role in the rising price to consumers.”

Charles continued, “Adequately paying for the populations they have chosen to insure through Medicare, Medicaid, and the State Health Plan, plus providing avenues for others to receive care either through Medicaid expansion or job growth, would be a better role for the government than meddling in the negotiations of private entities.” 

About A.P. Dillon 684 Articles
A.P. Dillon is a North State Journal reporter located near Raleigh, North Carolina. Find her on Twitter: @APDillon_