Trump, HHS Announce Pricing Transparency Rule for Hospitals, Insurers

Two new rules that require pricing information to be made publicly available were finalized and announced by the Trump administration, US Department of Health & Human Services (HHS), and Centers for Medicare & Medicaid Services (CMS).

The first rule is titled, Calendar Year (CY) 2020 Outpatient Prospective Payment System (OPPS) & Ambulatory Surgical Center (ASC) Price Transparency Requirements for Hospitals to Make Standard Charges Public Final Rule. The proposed second rule is the Transparency in Coverage.

“Under the status quo, health care prices are about as clear as mud to patients,” said CMS Administrator Seema Verma in a press release. “This final rule and the proposed rule will bring forward the transparency we need to finally begin reducing the overall health care costs.”

According to the HHS press release, the proposed rule “would require most employer-based group health plans and health insurance issuers offering group and individual coverage to disclose price and cost-sharing information to participants, beneficiaries, and enrollees up front.”

Under this rule, patients would have increased understanding regarding out-of-pocket costs, what insurance does and does not cover, meeting their deductible, and copay/co-insurance requirements. This added transparency will also create opportunity to compare data because the information will be standardized.

The proposed Transparency in Coverage rule could require health plans to “personalized access to cost-sharing information, including an estimate of their cost-sharing liability for all covered health care items and services, through an online tool that most group health plans and health insurance issuers would be required to make available to all of their members, and in paper form, at the consumer’s request.”

It would also require health plans to publicly share, via their website, negotiated rates for both in- and out-of-network providers.

In addition to these changes, the HHS press release stated that, “the Administration is finalizing a rule that will require hospitals to provide patients with clear, accessible information about their standard charges for the items and services they provide, including through the use of standardized data elements, making it easier to shop and compare across hospitals, as well as mitigating surprises.”

Beginning in 2021, hospitals will be required to use a comprehensive machine-readable file, one that standardizes charges and explicitly explains the breakdown of hospital standard charges to patients.

Also in 2021, hospitals will need a display of shoppable services presented in a consumer-friendly manner.

This includes “public 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 in a manner that is consumer-friendly and update the information at least annually.

In order to enforce the new rule changes, CMS will have several new tools to improve monitoring, auditing, and corrective action plans. The agency will also be able to impose civil monetary penalties of $300 per day. The final rule will go into place January 1, 2021. —Edan Stanley