New Rule Requires Greater Health Plan Transparency

The Trump Administration has issued a new rule that will require greater price transparency on the part of health insurers, including the rates charged by in-network physicians and copays and costs of drugs.

The final rule requires health plans and health insurers to disclose on a public website their in-network negotiated rates, billed charges and allowed amounts paid for out-of-network providers, and the negotiated rate and historical net price for prescription drugs.  

The aim of the new rule is to give health plan enrollees more information when it comes to making decisions when seeking out and price-comparing care and choosing medications. With more information about health care costs, health plan enrollees can:

• Make cost-conscious decisions,
• Face fewer out-of-pocket surprise bills, and
• Potentially lower their overall health care costs.

 
The drug price transparency part of the final rule came as a surprise because it was not included in the original proposed regulations.

The new rules do not, however, take effect right away and different parts will be implement at different times. Nonetheless, it's important for health plan sponsors and employers to be aware of the rules as they will greatly affect how their employees access and shop for coverage and medications.

Most of the rules do not apply to grandfathered plans. Here's what they will do once they come into effect:

Transparency for enrollees

Insurers will be required to make available to health plan enrollees the following information:

• Personalized out-of-pocket cost information (for their particular plan) for all covered health care items and services, including prescription drugs.
• All underlying negotiated rates for all covered health care items and services, including prescription drugs.

 
This information must be provided through an online tool on their website and in paper form upon request. Items or services include encounters, procedures, medical tests, supplies, drugs, durable medical equipment, and fees (including facility fees). 

Insurers will be required to make available an initial list of 500 shoppable services that will be determined by the Centers for Medicare and Medicaid, starting with the 2023 plan year. The remainder of all items and services will be required for these self-service tools for plan years that begin on or after Jan. 1, 2024.
 
Public transparency

Health insurers will be required to make available to the public, consumers, researchers and others the following information in "machine-readable" files:

• Negotiated rates for all covered items and services with in-network providers.
• Historical payments to, and billed charges from, out-of-network providers.
• In-network negotiated rates and historical net prices for all covered prescription drugs by plan or issuer at the pharmacy location level.

 
The idea behind these changes is to provide opportunities for detailed research studies, data analysis, and offer third party developers the ability to create private apps and websites to help consumers shop for health care services and prescription drugs.

These files are required to be made public starting with the 2022 plan year.
 
The takeaway

These are final rules but, as mentioned, the part of the rule that affects your group health plan and your employees doesn't take effect until 2023 as the industry will need time to prepare and comply. 
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Once the rules take effect, your covered employees should have a wealth of information at their fingertips when they are shopping and comparing health services and drug information.