The Transparency in Coverage final rule released at the end of October requires private health plans to publish their rates negotiated with providers. According to the Centers for Medicare and Medicaid Services (CMS), these new regulations build on previous Trump Administration actions to increase price transparency and will give consumers much-needed pricing information through their health plans.
Insurers must provide pricing information in two ways.
Personalized Cost Information
First, personalized out-of-pocket cost information, along with the underlying negotiated rates, must be provided to participants, beneficiaries and enrollees through an internet-based self-service tool. The requirement applies to all covered health care items and services, including prescription drugs, and must also be made available in paper form upon request
The requirement will be implemented in stages, with an initial list of 500 shoppable services required to be available for plan years that begin on or after January 1, 2023, and the remainder of all items and services for plan years that begin on or after January 1, 2024.
The final rule also requires insurance plans to make publicly available three separate machine-readable files with detailed pricing information for plan years that begin on or after January 1, 2022. The files include the following:
- The first file will show negotiated rates for all covered items and services between the plan or issuer and in-network providers.
- The second file will show both the historical payments to, and billed charges from, out-of-network providers.
- The third file will detail the in-network negotiated rates and historical net prices for all covered prescription drugs by plan or issuer at the pharmacy location level.
Plans and issuers are required to display these data files in a standardized format and provide monthly updates so they can be used in detailed research studies and data analysis, as well as “offer third party developers and innovators the ability to create private sector solutions to help drive additional price comparison and consumerism in the health care market.”
Shared Savings Plans
Finally, the Transparency in Coverage rule encourages insurers to create “shared savings” plans “that empower and incentivize consumers to shop for services from lower-cost, higher-value providers.” Any savings realized by insurance plans could then be credited back to them in their medical loss ratio (MLR) calculations.
For more information about the Transparency in Coverage final rule, check out the following resources:
- Transparency in Coverage Final Rule on the CMS website
- Transparency in Coverage Final Rule Fact Sheet on the CMS newsroom website
- Final Rule Requires Health Plans to Make Negotiated Rates Public by Shannon Muchmore for Healthcare Dive
- Trump Administration Finalizes Rule Forcing Payers to Post Negotiated Rates, Cost-Sharing Data by Paige Minemyer for Fierce Healthcare
— All rights reserved. For use or reprint in your blog, website, or publication, please contact us at firstname.lastname@example.org.