On Thursday, October 29th, the Trump administration issued its final rule requiring nearly all health insurers and self-insured plans to publicly disclose hospital pricing, their discounted rates with insurers and ultimately member cost-sharing information. The “Transparency in Coverage” rule will require insurance companies and third party administrators to post the in-network and out-of-network rates they negotiate with providers online. It also requires insurers to develop online price transparency tools to give patients cost-sharing information. Hospitals are obligated to comply as of January 2022, with the network discount price component of the rule in spite of court challenges that have failed. In addition to having to post negotiated rates online, payers will also have to make available a list of 500 “shoppable” services through an online tool by January 2023 with expanded descriptions by 2024.
The impact of these rules cannot be underestimated. For plan years on and after January 2022 hospitals will be obligated to publicly disclose their negotiated network discounted deals with insurers and third party administrators (“TPAs”). This will be an industry game-changing event and likely place hospitals and insurers in a challenging position once the information is publicly available for review. It is possible other court challenges at a later date or a change in administration could reverse course, but until such time, the industry will be preparing for what will be the biggest “transparency” change in the sector in some time.
The results of public “network discount disclosure” will enable employers and plan sponsors to more effectively evaluate deals from one provider to the next, measure negotiated costs against Medicare reimbursement levels and examine the strength of the various insurer and TPA contract deals.
A link to the overview of the rule can be found here.
Please contact your Conner Strong & Buckelew account representative toll-free at 1-877-861-3220 with any questions. For a complete list of Legislative Updates issued by Conner Strong & Buckelew, visit our online Resource Center.
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