Following through on President Trump’s objective of increasing transparency in healthcare, the Departments of Health and Human Services (HHS), Labor and Treasury released a final rule, Transparency in Coverage (CMS-9915-F). It mandates disclosure of pricing information beginning January 1, 2022 – and starting January 1, 2023, it requires most group health plans and health insurance issuers in the individual and group markets to disclose cost-sharing information to individual and employer-sponsored plan enrollees upon request. These disclosures are separate from the hospital cost disclosures slated to take effect on January 1, 2021.

 

The information includes cost-sharing for all procedures, medical tests, drugs, durable medical equipment, and any other item or service covered under the plan including deductibles, coinsurance requirements, and copayments. It does not include premiums, out-of-network cost-sharing, or any costs not covered by the plan. Insurers are required to disclose both providers’ negotiated rates and allowable out-of-network charges for providers and for prescription drugs. Prescription drug disclosure is required to include rebate information.

Viewpoints from Craig Hasday

It will be interesting to see how the market responds.

Seen as their market differentiation, provider and pharmacy discounts and allowed charges have been closely guarded by pharmacy benefit managers (PBMs), insurance carriers and network gatekeepers. Plan sponsors have actively encouraged comparison pricing for medical services. Medical costs represent almost 20% of the U.S. gross domestic product but comparing costs for different providers has been difficult. Providers argue that cost disclosures aren’t that simple and will create even more confusion. Often, it is unclear which services will be provided until a patient’s condition is accessed and needed care is rendered. Also, the cost of care is only a part of the equation. Quality considerations are also needed, and this is difficult to assess. And often critical medical care is given under stressful situations where cost consideration is not a part of the decision process.

But no doubt the opaqueness of healthcare costs increases the bill.

Tools like OneRx and Blink Health have significantly increased transparency in pharmacy costs and there is no doubt that technology will rush to capitalize on these new transparency rules for hospital and other provider costs. And undoubtedly, providers and insurers will find a way to work with this new requirement.

I strongly advocate cost transparency.

Our healthcare costs too much and transparency will eventually lead to pressure to suppress excess costs. Winding through these new rules will point clients to their brokers and consultants. We are going to be busy.

 

Check out more of our EPIC Resources:

Visit the EPIC coronavirus update center for COVID-19 information

Sign up for EPIC Newsletters in one convenient location

See results from our In It Together pulse surveys on our COVID-19 strategic collaboration and idea-sharing forum

 

EPIC offers these opinions for general information only. EPIC does not intend this material to be, nor may any person receiving this information construe or rely on this material as, tax or legal advice. The matters addressed in this article and any related discussions or correspondence should be reviewed and discussed with legal counsel prior to acting or relying on these materials.

 

Sign up for our EPIC Viewpoints Newsletter

You’ll receive semi-monthly alerts about candid perspectives on the employee benefits and risk management landscapes

CraigHasday-ContactTile
Craig Hasday

President, National Employee Benefits Practice