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What Employers Need to Know About the New Transparency Rules

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Proposed Transparency Rule Released

Following President Trump’s Executive Order on Improving Price and Transparency in American Healthcare, one final and one proposed rule was released by HHS and CMS that aim to increase price transparency for hospitals and insurance companies.  These rules would have an impact on employers who sponsor group health plans. 

It is important for employers to remember that the Transparency in Coverage Proposed Rule is only a proposed rule and will not be finalized until after the public comment period if it all. There is also a possibility it may not become a final rule. It is anticipated that many organizations and entities will provide comments on this rule, and there is a likelihood that if finalized in the future, it could be markedly different from the proposed rule. Furthermore, for rules of this magnitude, additional guidance will be required by federal agencies to assist employers, Third-party administrators, insurance carriers, and hospitals, with the specific implementation processes and policies. Employers should look for updates on this rule but should not make decisions or changes based on these proposed rules at this time. 

The final rule for hospitals is the 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. This rule will require hospitals to provide, publicly on the internet, standard charges (gross charges, payer-specific negotiated charges, the amount the hospital will accept in cash from a patient, and the minimum and maximum negotiated charges) for all items and services. This rule will go into effect in 2021. The information must include common billing and/or accounting codes and descriptions of the items or services so consumers can compare standard charges between hospitals. 

The rule will also require hospitals to make similar information available for 300 common shoppable services, which include services that consumers can schedule in advance such as x-rays, outpatient visits, and bundled services such as a cesarean delivery including pre- and post-delivery care. 

Civil monetary penalties of $300 a day will be imposed on hospitals that do not comply. 

The second rule which could impact employers and carriers is the Transparency in Coverage Proposed Rule. This rule is aimed to ensure consumers would be able to get estimates of their cost-sharing liability for health care for different providers, allowing them to both understand how costs for covered health care items and services are determined by their plan, and shop and compare costs for health care before receiving care. The rule is also intended to increase consumerism and provide opportunities for innovation in health care. 

The proposed rule would require all non-grandfathered group health plans or health insurance issuer:

  • Make available to participants, beneficiaries and enrollees (or their authorized representative) personalized out-of-pocket cost information for all covered health care items and services through an internet-based self-service tool and in paper form upon request.
  • Make available to the public, including stakeholders such as consumers, researchers, employers, and third-party developers the in-network negotiated rates with their network providers and historical payments of allowed amounts to out-of-network providers through standardized, regularly updated machine-readable files.

In addition to comments on the above items, the rule seeks comments on whether group health plans and insurance issuers should be required to make available through a standards-based application programming interface the cost-sharing information referenced above that is proposed to be disclosed through the internet-based self –service tool and the machine-readable files.

The information provided by the health plan would have to include: 

•    The participant’s estimated cost-sharing liability
•    Accumulated amounts (financial responsibility already incurred w/ respect to the deductible or out of pocket limits)
•    The negotiated rate, reflected as a dollar amount
•    Out-of-network allowed amount (if requested item or service is out of network)
•    Items and services content list
•    Notice of pre-requisites of coverage
•    Disclosure notice

This information would have to be provided in the following manners: 

•    Internet-based self-service tool
•    Paper form at no fee provided via mail no later than 2 business days after it is requested by the participant, beneficiary, or enrollee, with an option to allow participants to select delivery over the phone, via email, by fax, or face to face.

The proposed rule would allow employers and health insurance carriers to contractually agree that the information will be provided by the carrier.