The Trump administration on Thursday issued its final rule requiring nearly all health insurers and self-insured plans to disclose pricing and cost-sharing information.
The Transparency in Coverage rule will force employer health plans and insurance companies to post in-network and out-of-network rates they negotiate with providers. It also requires insurers to develop online price transparency tools to give patients cost-sharing information. Insurers and hospital groups and even some experts argued it would confuse patients and do little to lower costs.
"Disclosing privately negotiated rates will reduce incentives to offer lower rates, creating a floor—not a ceiling—for the prices that drug makers, providers and device makers would be willing to accept," America's Health Insurance Plans CEO Matt Eyles said in a statement.
But the Trump administration has long promoted more transparency in healthcare as a win for consumers.
"Hidden healthcare prices have produced a dysfunctional system that serves special interests but leaves patients out in the cold," CMS Administrator Seema Verma said in a statement. "Price transparency puts patients in control and forces competition on the basis of cost and quality, which can rein in the high cost of care."
Hospitals are supposed to start sharing prices in January, as they appear likely to lose a court fight in which the American Hospital Association claimed a similar rule violated the hospitals' First Amendment rights and Congress' wishes. The Trump administration claims the insurance-focused rule is necessary because it includes all providers.
"It really does cover the entire healthcare industry, not just hospitals," Verma said during a press call. The hospital-focused rule mostly benefited employers and people without health coverage, she added.
According to a CMS fact sheet, payers will have to make available a list of 500 shoppable services through an online tool by Jan. 1, 2023. They'll have to add all other items and services to those self-service tools by Jan. 1, 2024. The administration aligned the implementation timeline with plans' annual cycles, HHS Secretary Alex Azar said during a call with reporters.
Insurers will also need to create publicly available, machine-readable files showing negotiated rates between the plan and in-network providers and historical payments and charges to out-of-network providers. The Trump administration mandated that payers provide in-network negotiated rates and historical net prices for all covered prescription drugs at the pharmacy level—the proposed rule didn't require that information.
But the agencies didn't explain how they would make sure insurers follow the rule. It has a good faith safe harbor to protect plans if they make a mistake, but states will take the lead on enforcement.
Federal officials "expect to work closely with state regulators to design effective processes and partnerships for enforcing the final rules," the rule said.
The rule encourages payers to create new plans to motivate consumers to use lower-cost, higher-value providers by passing on the savings to beneficiaries. The Trump administration will allow plans to take credit for shared-savings payments in their medical loss ratio calculations starting in 2020. The payments won't count toward plans' administrative costs.
Short-term limited-duration insurance and health reimbursement arrangements aren't bound by the rule.