Insurers and employer-sponsors of non-grandfathered health plans may soon have to disclose extensive amounts of plan cost-sharing information, on request, to participants, beneficiaries, and others. Under recently released proposed guidance, health plans may be required to submit data to comply with transparency requirements under the Affordable Care Act (ACA). This proposed guidance will directly affect plan sponsors and, if finalized, would constitute a significant expansion of the information that plans and insurers must disclose. Hospital price disclosure rules were finalized at the same time, but challenges to the final hospital rules are likely. Details on these two recently released rules (one final and one proposed) are set forth below.
Hospital Price Disclosure – Final
The final rules requiring hospitals to disclose information on negotiated rates for consumers requires hospitals to publish all hospital standard charges, including payer-specific negotiated rates for all items and services on the Internet in a machine-readable file. The final regulations also require hospitals to display standard charges, including payer-specific negotiated rates, for certain “shoppable services” in a consumer-friendly manner and to update the information at least annually. The rules are effective January 1, 2021, and according to a joint statement from a number of hospital groups, a lawsuit challenging the final rule is imminent. An official fact sheet is available on the CMS website.
These rules on hospital price transparency follow up on proposed regulations issued earlier this year, which were generally very similar to the final rules. The public release of provider and plan specific negotiated rates may have the unintended consequence of increasing health care costs of hospital services in highly concentrated markets or as a result of anti-competitive behaviors and therefore comments to the proposed rules recommended that CMS structure any final rule to avoid such unintended consequences. But the final rules did not incorporate this recommendation.
Group Health Plan and Insurer Price Disclosure – Proposed
The proposed rules requiring group health plans and insurers to disclose cost-sharing information to consumers in advance of the care being provided requires most group health plans and group and individual market insurers to provide this information through an online tool and in paper form if requested. The proposed rules also require group health plans and insurers of group or individual coverage to disclose negotiated rates for in-network providers and allowed amounts for out-of-network providers, on a public website. An official fact sheet is available on CMS website.
The proposed rules were issued in response to a White House executive order directing the agencies to require health plans, insurers, and providers to make available information concerning out-of-pocket costs for health care items and services before a participant receives the care or service. As a result, the proposed rules are generally intended to encourage a market-driven health care system in which participants are provided information to make informed health care decisions. Comments on the proposed rules are due by January 14, 2020. If finalized, the rules would be applicable for plan years beginning one year from the effective date of any final rules.
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