October 29, 2020
Trump Administration Finalizes Rule Requiring Health Insurers to Disclose Price and Cost-Sharing Information
Today, the Department of Health and Human Services, the Department of Labor, and the Department of the Treasury issued a final rule on price transparency, helping to ensure Americans know how much care will cost in advance and allowing them to make fully informed and value-conscious decisions. The rule requires that almost all health insurance companies and self-insured plans disclose pricing and cost-sharing information.
Under this final rule, more than 200 million Americans with private-sector insurance (both individual-market and employer-based) will have access to a list of real-time price information, including cost-sharing, enabling them to know how much care will cost them before going in for treatment.
“President Trump’s actions to require full transparency on prices throughout our healthcare system may be the single most pro-patient, pro-consumer reform American healthcare has ever seen,” said HHS Secretary Alex Azar. “We want every American to be able to work with their doctor to decide on the healthcare that makes sense for them, and those conversations can’t take place in a shadowy system where prices are hidden. With more than 70 percent of the most costly healthcare services being shoppable, Americans will have vastly more control over their care, delivering on the President’s vision of better care, lower costs, and more choice.”
“President Trump is solving longstanding problems in our healthcare system; hidden healthcare prices have produced a dysfunctional system that serves special interests but leaves patients out in the cold,” said Centers for Medicare & Medicaid Services Administrator Seema Verma. “Price transparency puts patients in control and forces competition on the basis of cost and quality which can rein in the high cost of care. CMS’ action represents perhaps the most consequential healthcare reform in the last several decades.”
“This final rule opens the way to greater openness and transparency in our healthcare system,” said U.S. Secretary of Labor Eugene Scalia. “American workers in employer-sponsored health plans will now have access to real-time, personalized cost-sharing information that empowers them to shop and compare costs between specific providers before receiving care. Today’s rule is another example of the Trump Administration improving healthcare access and options for American workers.”
The rule requires that most health plans and health insurers not only provide easy-to-understand personalized information on enrollee cost-sharing for healthcare services, but must also publicly disclose the rates they actually pay healthcare providers for specific services.
Through a shopping tool available through their plan or insurance company, consumers will be able to see the negotiated rate between their doctor and their plan or insurer, as well as the most accurate out-of-pocket cost estimate possible based on their health plan for procedures, drugs, durable medical equipment, and any other item or service they may need.
Consumers will also have access to accurate price and plan information that allows them to shop and compare costs between individual doctors before receiving care, so they can choose a healthcare provider that offers the most value and best suits their medical needs.
The rule also allows insurers that pass on savings to consumers in plans that encourage use of services from lower-cost, higher-value providers, by allowing insurers to take credit for such “shared savings” payments in their medical loss ratio (MLR) calculations beginning with the 2020 MLR reporting year.
The Departments are also requiring plans and issuers to make publicly available a standardized, regularly updated data file, which would offer for the first time an open opportunity for research, innovation and comparison within the healthcare market. With this data, innovators, researchers, and developers will be able to create private sector solutions for patients to help them make decisions about their care and will allow consumers to not only see what something costs from their current plan but also what it could cost with a competitor’s health plan or for people who are uninsured. Technology companies can create additional price comparison tools that will further incentivize competition. There will also be the potential for unprecedented research and analysis into how healthcare prices are set, providing new transparency into a once-shadowy market.
The requirement for the publicly available data files will take effect for plan or policy years beginning on or after January 1, 2022. Plans and issuers must make cost-sharing information available for 500 specified items and services for plan or policy years beginning on or after January 1, 2023, and must make cost-sharing information available for all items and services for plan or policy years beginning on or after January 1, 2024.
Today’s announcement builds on HHS’s efforts over the past three years to promote price and quality transparency, which have also included requiring hospitals to provide access to negotiated charges; requiring real-time pharmacy-benefit tools in all Medicare Part D plans no later than January 1, 2021; and requiring that many payers provide consumers access to their electronic health record through interoperability rules issued by CMS and the Office of the National Coordinator for Health IT.
Read more on CMS’s transparency work: www.cms.gov/newsroom/press-releases/cms-completes-historic-price-transparency-initiative
Read a CMS fact sheet on the final rule: www.cms.gov/newsroom/fact-sheets/transparency-coverage-final-rule-fact-sheet-cms-9915-f