2015 Report Price Transparency Laws

2015 Report Price Transparency Laws

Berkely, CA and Newtown, CT – July 8, 2015

Dear Colleagues,

In this third installment of the Catalyst for Payment Reform (CPR) – Health Care Incentives Improvement Institute (HCI3) Report Card on State Price Transparency Laws, you will find little progress since last year and, in some cases, regression. For this reason, this year’s report is concise, sharing information only on the handful of states that received new grades.

However, this bleak picture masks the recent legislative and regulatory activity that has sprung up around the country, spurred in part by our prior Report Cards. In fact, many states highlight this report when introducing bills for pricing transparency. As a reminder, when we assess each state, we base the grade on legislation passed during the prior year’s legislative session; this year’s report is based on legislation enacted in 2014.

Legislative sessions are still underway and some proposed bills may still pass. Many won’t due to pressure from providers, payers and other suppliers to the industry who still benefit from price opacity. That pressure often rests on spurious arguments about price as a trade secret and/or the potential for a state law on price transparency to violate contracted terms between payers, providers, and suppliers—arguments legislators and the media often accept.

To outline the legal arguments raised against price transparency and how best to address them, we teamed with the University of California San Francisco and University of California Hastings Consortium on Law, Science & Health Policy. These experts host The Source on Healthcare Price & Competition. We believe it is important for the public, including the media, to understand what legal arguments are valid and question the others. A crucial point for legislators and the media is that states who take efforts to ensure price transparency seriously have successfully brushed aside the spurious arguments, and not one plan or provider has sought a challenge in the nation’s highest court. Many of the arguments against price transparency — including that it leads to higher prices and breaks laws—are toothless. We hope the legal analysis helps legislators and the media focus on the right considerations (see Appendix I).

For states that enact laws on price transparency, there is much work to be done. Our report illustrates whose lead to follow. One state returned to a high score this year after a brief hiatus due to an inactive website last year:
New Hampshire. Its rebound shows that even small states with few resources can develop and maintain a useful and consumer-friendly website on health care prices. Conversely, Massachusetts’ grade dropped precipitously due to shutting down MyHealthCareOptions, the website that had publicly posted price information.

In this year’s Report Card, as we did with the 2014 report, we review whether states had passed laws or regulations requiring health care price information be made public. In addition, we examined how well those laws were being put into action by providing residents with access to meaningful price information through public websites and the use of all-payer claims databases (APCDs) as data sources for those sites. We discuss the important role for APCDs in Appendix II. The results of our analysis show few changes since last year’s report: 90% of states fail to provide adequate price information to consumers.

But it wouldn’t take much to change this result. States like Connecticut and New York are still assembling their all-payer claims databases and working on consumer-facing websites. Maryland is in the process of embarking on a significant effort to publish prices on health care services, and Washington State just enacted new laws. We expect continued progress, even if at a slow pace.

Neither CPR nor HCI3 receives funding to support the development and publication of this Report Card. We do it because we believe that markets cannot function properly without freely accessible information on price and quality. Those who oppose transparency are a shrinking minority, and we hope our efforts diminish it further.

Sincerely,

Francois de Brantes, MS, MBA
Executive Director
Health Care Incentives Improvement Institute

Suzanne Delbanco, Ph.D.
Executive Director
Catalyst for Payment Reform