Healthcare Executive Order Suggests Changes Are Coming
By: Stephen Bowers
On June 24, 2019, President Trump issued the “Executive Order on Improving Price and Quality Transparency in American Healthcare to Put Patients First” (the Order). The Order directs several executive agencies to issue regulations, primarily surrounding issues related to price transparency and controlling healthcare costs. The Order indicates that the intent is to increase consumer engagement and improve the “shoppability” of certain healthcare services. Although parts of the Order are directly aimed at healthcare providers, the text suggests that some of these changes will be more broadly relevant.
Primary requirements of the Order applicable to employers outside the healthcare industry include:
1) Ordering the Department of Health and Human Services (HHS), together with the Treasury Department and the Department of Labor, to issue regulations requiring insurers (specifically including employer-sponsored self-funded health plans) to facilitate access to information regarding expected out of pocket costs. Because most Americans receive health insurance through their employer, it is likely that this will create an additional disclosure requirement for employer plan sponsors.
2) Ordering the Treasury Department to expand the availability and utility of “high deductible health plans,” which are a specific type of insurance typically paired with a health savings account (HSA). Additionally, the Treasury is directed to increase the “carry-over” amount (currently $500, with certain limitations) applicable to healthcare flexible spending accounts, and make clear that certain arrangements (including “concierge care”) can be treated as eligible medical expenses for certain requirements of the tax code. If implemented, these changes will require amendments to relevant plan documents, and may broaden appeal of certain types of plans.
Taken together, these potential regulations indicate a clear and consistent focus on emphasizing and encouraging “consumer directed” health benefits, which aim to incentive healthy behaviors through financial and tax incentives. This marks a dramatic shift from the policies established under the Affordable Care Act, which aimed to increase the size of risk pools to protect high-risk individuals.
In addition to the proposals above, the Order requires executive agencies (particularly HHS) to issue regulations specifically directed at healthcare providers:
1) HHS is required to issue regulations requiring hospitals to publicly post their standard charges, as well as additional information regarding the fees to be charged for specific services.
2) Several executive agencies are required to provide increased access to de-identified health information (specific health treatment information with identifying factors removed) held by the government in order to improve research and innovation in the provision of healthcare.
3) HHS is required to prepare non-binding reports on a number of items, including the practice of “surprise billing,” accountable care and legal roadblocks to the policies set forth in the Order.
It is important to note that the Order does not make any current changes to existing rules. In addition, any regulations eventually issued under the authority of the Order are required to be “consistent with applicable law.” However, it is very likely that the regulations will create additional requirements under those laws. We will continue to monitor developments in this area.
If you have questions or would like additional information, please contact Stephen Bowers (email@example.com; 215.864.6247).