- 04/04/2022
Healthcare consumers and patients have long been suffered from the complexity of the US healthcare system especially when it comes to pricing of services and how they would pay for it and how much they would pay for it. This is because prices can vary by hundreds to thousands of dollars between providers for the same healthcare service, there is no standardization. While patients never know how much they would end up paying out-of-pocket in spite of their insurance coverage or doctors don’t have a clue how much a patient or an insurer is charged for the services they provide.
CMS has introduced certain mandates to tackle this problem and increase the price transparency for the healthcare consumers. CMS and the federal government are taking multiple steps to help reduce the healthcare costs and empower consumers to have access to care cost beforehand, they don’t encounter surprise medical bills and can make informed decision.
Hospital Price Transparency Final Rule
This mandate is into effect from Jan 1, 2021, as per which, hospitals must post their standard charges on a publicly available website, in two ways:
- Single comprehensive machine-readable file with all items and services provided by the hospitable
- Display of at least 300 shoppable services, in a consumer-friendly way, that a healthcare consumer can schedule in advance
The file and the display of shoppable services must include:
- Gross charges
- Discounted cash prices
- Payer-specific negotiated charges
- De-identified minimum and maximum negotiated charges
However, since this does not address what a patient would pay out-of-pocket with their health insurance for a specific service, CMS realized this and also introduced final ruling on transparency in coverage for health plans. Nevertheless, this was a stepping stone in the direction to make healthcare services and procedures pricing information accessible to people.
Transparency in Coverage Rule Final Rule (for Health Plans / Health Insurance Issuers)
This final rule builds upon the hospital transparency rule that the Department of Health and Human Services (HHS), the Department of Labor, and the Department of the Treasury have taken to increase price transparency and empower healthcare consumers with the healthcare price information through their health plans. This will also promote competition in the private health plan industry.
Details and Timelines:
July 1, 2022
(updated from Jan 1, 2022)
Access to Pricing through Machine Readable Files
Jan 1, 2023
Personalized, out-of-pocket estimates for 500 services through online self-service tool, print & phone
Jan 1, 2024
Personalized, out-of-pocket estimates of all services
Jul 1, 2022:
Health plans or health insurance issuers will be required to make three separate machine-readable files available to the public, including consumers, researchers, employers and third-party developers (as per new federal guidance, third file – prescription drug file requirement is deferred)
- First File: includes negotiated rates for all covered items and services between the plan / issuer and in-network providers. It is member cost-sharing liability or fee schedule rates while it should not be confused with rates used to reimburse providers by health plans / issuers.
- Second File: includes out-of-network allowed amounts (OON OOP) including historical payments and billed charges. Historical payments must have a minimum of 20 entries to protect consumer privacy.
- Third File (requirement of which is deferred): in-network negotiated rates and historical net prices for all covered prescription drugs by plan / issuer at the pharmacy location level
Jan 1, 2023:
Personalized out-of-pocket cost information, and the underlying negotiated rates, for 500 services, including prescription drugs, through an online self-service tool, phone and in paper form upon request. Paper based request might be limited to 20 providers per request.
The proposed rules set forth seven content elements that a plan or issuer must disclose,
to a participant, beneficiary, or enrollee for a covered item or service:
- Estimated cost-sharing liability
- Accumulated amounts
- Negotiated rates in dollars
- Out-of-network allowed amounts
- A list of items and services subject to bundled payment arrangements
- A notice of prerequisites, if applicable
- A disclosure notice
Jan 1, 2024:
Personalized out-of-pocket cost information, and the underlying negotiated rates, for all services and items covered by the health plan.
No Surprises Act
Dec 27, 2020, the No Surprise Act was signed into law as part of the Consolidated Appropriations Act of 2021. The act largely focused on protecting patients from receiving surprise medical bills, resulting from gaps in coverage for emergency services and certain services provided by out-of-network clinicians at in-network facilities.
The compliance is supposed to go into effect from Jan 1, 2022. The main components of this compliance are:
- Cost-sharing comparison by phone or internet-based tool for specific items or services
- Enforcement of below compliance is deferred to a later unknown date as per latest guidance from the Department, citing feedback from providers and facilities on the challenges of developing the technical infrastructure to transmit required information to health plans:
- If service or item is scheduled at least 10 business days before such service or item is to be furnished, the plan or issuer must provide the AEOB within 3 business days of receiving the required notice from provider or facility.
- Health plans or issuers must provide an AEOB (advance explanation of benefits) to the participant, beneficiary, or enrollee no later than 1 business day of receiving the required notice from provider or facility.
- If a member, beneficiary or enrollee requests the AEOB, the plan or issuer must provide the AEOB within 3 business days.
- Further, rulemaking of below compliance is deferred however plans are expected “to implement these using a good faith”.
- Health plans or issuers must verify and update provider directory at least every 90 days (or within 2 business days of receiving of notice period).
- Health plans or issuers must respond to individuals inquiring about the network status of a provider or facility within 1 business day and must retain records of the enquiry for 2 years.
- Health Plans or issuers must have a web-based provider directory that includes:
- Provider or facility contact information
- Direct or indirect contractual relationship with the plan
- Digital contact information
Changes in on Grandfathered Health Plan
Earlier grandfathered health plans (health plans purchased on or before March 23, 2010 i.e., before passage of Affordable Care Act) were exempt from Price Transparency Mandate but subject to No Surprise Act requirements. As per latest federal guidance, grandfathered health plans would be required to support price transparency, and AEOB (advanced explanation of benefits as part of No Surprise Act).
References:
- https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/CMS-Transparency-in-Coverage-9915F.pdf
- https://www.cms.gov/newsroom/fact-sheets/transparency-coverage-final-rule-fact-sheet-cms-9915-f
- https://www.cms.gov/hospital-price-transparency/hospitals
- https://www.federalregister.gov/documents/2019/11/27/2019-24931/medicare-and-medicaid-programs-cy-2020-hospital-outpatient-pps-policy-changes-and-payment-rates-and#p-1030
- https://www.federalregister.gov/documents/2019/11/27/2019-24931/medicare-and-medicaid-programs-cy-2020-hospital-outpatient-pps-policy-changes-and-payment-rates-and#p-1010
- https://www.aha.org/system/files/media/file/2021/01/detailed-summary-of-no-surprises-act-advisory-1-14-21.pdf
- https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQs-Part-49.pdf
