November 5, 2020

CMS Finalizes Health Plan Price Transparency Reg

I know it’s been an eventful week, but I hope I can take your mind off the national headlines (if only for a few minutes) with a healthy dose of Regs & Eggs.

Last week, the Trump Administration finalized another major regulation that doubles down on its ongoing effort to promote price transparency in health care. As you may recall, the administration had already finalized requirements targeting hospitals. Starting January 1, 2021, hospitals will be required to post payer-specific negotiated rates for 300 “shoppable” services in a consumer-friendly way. They must also post available payer-specific negotiated rates for all services—including emergency services—in a machine-readable format. While the American Hospital Association (AHA) and other hospital associations mounted legal challenges against the requirements, they have not been successful thus far, and the requirements are still scheduled to go into effect on January 1.

The new reg released last week is focused on health plans. It requires most health plans—including self-insured plans—to disclose pricing and cost-sharing information such as information on negotiated provider rates. There are two specific sets of requirements: 

  1. Starting January 1, 2022, health plans will be required to make detailed pricing information available to the public, including negotiated rates services between the plan and in-network providers; historical payments to and billed charges from out-of-network providers; and in-network negotiated rates and historical net prices for all covered prescription drugs.
  2. Starting January 1, 2023, health plans will be required to offer an online shopping tool that will allow consumers to see the rate negotiated by their provider and plan and an estimate of their out-of-pocket cost for 500 of the most shoppable items and services. Going forward, starting on January 1, 2024, health plans will be required to offer online shopping tools showing costs for remaining procedures, drugs, durable medical equipment, and other services. 

The reg also allows certain plans to take credit in their medical loss ratio calculations for shared savings payments if their plan design permits consumers to shop for services from lower-cost, higher-value providers. These plans can share the resulting savings with consumers.

ACEP had submitted comments on the proposed reg earlier this year. Unfortunately, the final reg does not address our request to implement more targeted policies for emergency vs non-emergency care, including our recommendation to require health plans to provide consumers with information they need to fully understand their cost-sharing obligations for emergency services at the time they obtain their coverage. Also, surprisingly, the initial list of 500 “shoppable” services that health plans must include in their online shopping tool includes emergency department evaluation and management (E/M) services levels 3-5 (CPT codes 99283-99285). ACEP does not consider these services to be “shoppable” since individuals do NOT have time to shop for providers when they are experiencing a medical emergency.

Although these new health plan requirements are final, they don’t go into effect until 2022. This leaves time for possible legal challenges. Similar to what the hospital associations did for the hospital requirements, some health plan associations—such as the America's Health Insurance Plans—will likely take the Trump Administration to court on this reg. Only time will tell whether they will be successful in challenging the reg and whether the requirements will be implemented on their current schedule.

Until next week, this is Jeffrey saying, enjoy reading regs with your eggs!

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