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Health Cost Transparency Rules Announced

The Centers for Medicare & Medicaid Services announced two proposed rules that increase price transparency requirements for hospitals, group health plans and health insurers.
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Last week, the Centers for Medicare & Medicaid Services (CMS) announced two proposed rules that increase price transparency requirements for hospitals, group health plans and health insurers. The rules follow an executive order made by President Trump in June to improve price and quality transparency in American healthcare.

The proposed rules package titled “Transparency in Coverage” will be issued jointly by the Department of Health and Human Services (HHS), the Department of Labor (DOL) and the Department of the Treasury.

The rules would require most employer-based group health plans and health insurance issuers offering group and individual coverage to disclose the price and cost-sharing information to participants, beneficiaries and enrollees up front. The administration hopes this information will give patients accurate estimates for any out-of-pocket costs they must pay to meet their plan's deductible, copay or coinsurance requirements.

If finalized, the proposed rule would require health plans to give consumers real-time, personalized access to cost-sharing information, including an estimate of their cost-sharing liability for all covered healthcare items and services through an online tool. Additionally, health plan providers must disclose on a public website their negotiated rates for in-network providers and allowed amounts paid for out-of-network providers.

The proposed rule would also “encourage health insurance issuers to offer new or different plan designs that incentivize consumers to shop for services from lower-cost, higher-value providers” by allowing issuers to take credit for "shared savings" payments in their medical loss ratio calculations.

Hospitals will be required to disclose payer-specific negotiated charges, the amount the hospital is willing to accept in cash from a patient for an item or service, and the minimum and maximum negotiated charges for 300 common “shoppable services.” Shoppable services are services that can be scheduled by a healthcare consumer in advance such as x-rays, outpatient visits, imaging and laboratory tests or bundled services like a cesarean delivery, including pre- and post-delivery care.

In order to ensure that hospitals comply with the requirements, the final rule provides CMS with new enforcement tools, including monitoring, auditing, corrective action plans and the ability to impose civil monetary penalties of $300 per day. The effective date of the rule is currently Jan. 1, 2021. There will be a 60-day comment period once the proposed rule is published in the Federal Register.

Heather Eilers-Bowser is Big “I” counsel, federal government affairs