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:
The file and the display of shoppable services must include:
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)
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:
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:
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).