- To promote price transparency, the Trump administration recently issued a final rule mandating that nearly all health insurers and self-insured plans disclose pricing and cost-sharing information.
- Critics of the Transparency in Coverage rule claim it will result in costly, confusing data that isn’t helpful to healthcare consumers.
- Recent research from TransUnion suggests that when patients understand their medical bill upfront, they are more likely to pay it.
Understanding the Final Rule
The goal of this final rule is to provide healthcare consumers with cost information to “make fully informed and value-conscious decisions,” according to a press release. “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.”
According to the Centers for Medicare & Medicaid Services (CMS), “[t]hrough 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.”
In addition to the “shopping tool,” plans and insurers must also contribute to a “standardized, regularly updated data file.” This database is designed to provide “innovators, researchers, and developers” with opportunities for “research, innovation, and comparison within the healthcare market.” Additionally, third-party technology companies can access the data to develop tools to “further incentivize competition.”
“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,” according to Seema Verma, CMS Administrator.
The final rule includes a three-year rollout. Beginning January 1, 2022, insurers and plans must contribute to the “publicly available data files.” Insurers and plans will then have until 2023 to provide cost-sharing information for 500 items and services. By 2024, insurers and plans must provide cost-sharing information for all remaining items and services.
Final Rule Receives Pushback
Critics assert that the rule will “confuse patients and do little to lower costs,” according to Modern Healthcare. In addition, they assert that compliance will be too costly, costing each insurer $13.6 million, according to a study by Bates White.
Ceci Connolly, President and CEO, Alliance of Community Health Plans (ACHP), said in a statement: “We have long supported efforts to make quality and pricing information more accessible, understandable and actionable for consumers. But they need real-time, patient-specific information tied to individual coverage benefits – not a massive published list of prices that may only frustrate consumers and likely increase costs over time. To fully empower patients, any transparency tool must include quality information alongside prices.”
While the final rule aims to empower healthcare consumers with price information, research shows that patients are still perplexed by medical bills. A recent survey by TransUnion Healthcare found that only 52 percent of patients “fully understood their financial responsibility for their recent medical bill.” Furthermore, helping patients to understand their medical bill can lead to increased payments as 60 percent of surveyed patients were “at least somewhat likely to pay their bill upfront if a cost estimate is offered in advance or at the time of service.”