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Two regulations advance the Trump Administration’s commitment to increasing price transparency

November 17, 2019 - As directed by President Trump’s Executive Order on Improving Price and Quality Transparency in American Healthcare, on Friday the Department of Health and Human Services announced that the Centers for Medicare & Medicaid Services (CMS) is issuing two rules that take historic steps to increase price transparency to empower patients and increase competition among all hospitals, group health plans and health insurance issuers in the individual and group markets. One of the rules is the Calendar Year (CY) 2020 Outpatient Prospective Payment System (OPPS) & Ambulatory Surgical Center (ASC) Price Transparency Requirements for Hospitals to Make Standard Charges Public Final Rule. The second rule is the Transparency in Coverage Proposed Rule. Both the final and proposed rules require that pricing information be made publicly available.

“President Trump has promised American patients ‘A+’ healthcare transparency, but right now our system probably deserves an F on transparency. President Trump is going to change that, with what will be revolutionary changes for our healthcare system,” said HHS Secretary Alex Azar. “Today’s transparency announcement may be a more significant change to American healthcare markets than any other single thing we’ve done, by shining light on the costs of our shadowy system and finally putting the American patient in control.”

Consistent with the Executive Order on price and quality transparency, the Trump Administration is taking action toward making sure that insured and uninsured Americans alike have the information necessary to get an accurate estimate of the cost of the healthcare services they are seeking before they receive care.

“Under the status quo, healthcare prices are about as clear as mud to patients,” said CMS Administrator Seema Verma. “Thanks to President Trump’s vision and leadership, we are throwing open the shutters and bringing to light the price of care for American consumers. Kept secret, these prices are simply dollar amounts on a ledger; disclosed, they deliver fuel to the engines of competition among hospitals and insurers. This final rule and the proposed rule will bring forward the transparency we need to finally begin reducing the overall healthcare costs. Today’s rules usher in a new era that upends the status quo to empower patients and put them first.”

In response to the Executive Order, the Department of Health and Human Services, the Department of Labor, and the Department of the Treasury (collectively, the Departments) are issuing a proposed rule, “Transparency in Coverage” that would require most employer-based group health plans and health insurance issuers offering group and individual coverage to disclose price and cost-sharing information to participants, beneficiaries, and enrollees up front. With this information, patients will have accurate estimates of any out-of-pocket costs they must pay to meet their plan’s deductible, co-pay, or co-insurance requirements.  This will make previously unavailable price information accessible to patients and other stakeholders in a standardized way, allowing for easy comparisons.

If finalized, the proposed Transparency in Coverage rule would require health plans to:

• Give consumers real-time, personalized access to cost-sharing information, including an estimate of their cost-sharing liability for all covered healthcare items and services, through an online tool that most group health plans and health insurance issuers would be required to make available to all of their members, and in paper form, at the consumer’s request. This requirement would empower consumers to shop and compare costs between specific providers before receiving care.
  
  
• Disclose on a public website their negotiated rates for in-network providers and allowed amounts paid for out-of-network providers. Making this information available to the public is intended to drive innovation, support informed, price-conscious decision-making, and promote competition in the healthcare industry. Making this information public directly helps the consumer, but, more importantly, creates new opportunities for researchers, employers and other developers to build new tools to help consumers.

The proposed rule would also encourage health insurance issuers to offer new or different plan designs that incentivize consumers to shop for services from lower-cost, higher-value providers by allowing issuers to take credit for “shared savings” payments in their medical loss ratio (MLR) calculations.

In addition, the Administration is finalizing a rule that will require hospitals to provide patients with clear, accessible information about their “standard charges” for the items and services they provide, including through the use of standardized data elements, making it easier to shop and compare across hospitals, as well as mitigating surprises. The final rule will require hospitals to make their standard charges public in two ways beginning in 2021:

• Comprehensive Machine-Readable File: Hospitals will be required to make public all hospital standard charges (including the gross charges, payer-specific negotiated charges, the amount the hospital is willing to accept in cash from a patient, and the minimum and maximum negotiated charges) for all items and services on the Internet in a single data file that can be read by other computer systems. The file must include additional information such as common billing or accounting codes used by the hospital (such as Healthcare Common Procedure Coding System (HCPCS) codes) and a description of the item or service to provide common elements for consumers to compare standard charges from hospital to hospital.  
• Display of Shoppable Services in a Consumer-Friendly Manner:  Hospitals will be required to make public payer-specific negotiated charges, the amount the hospital is willing to accept in cash from a patient for an item or service, and the minimum and maximum negotiated charges for 300 common shoppable services in a manner that is consumer-friendly and update the information at least annually.
  • Shoppable services are services that can be scheduled by a healthcare consumer in advance such as x-rays, outpatient visits, imaging and laboratory tests or bundled services like a cesarean delivery, including pre- and post-delivery care.
  • The requirements for the consumer-friendly file are that the information must be made public in a prominent location online that is easily accessible, without barriers, and it must also be searchable. Item and service descriptions must be in ‘plain language’ and the shoppable service charges must be displayed and grouped with charges for any ancillary services the hospital customarily provides with the primary shoppable service.

In order to ensure that hospitals comply with the requirements, the final rule provides CMS with new enforcement tools including monitoring, auditing, corrective action plans, and the ability to impose civil monetary penalties of $300 per day. In response to public comments, CMS is finalizing that the effective date of the final rule will be January 1, 2021 to ensure that hospitals have the time to be compliant with these policies.

For a fact sheet on the Calendar Year (CY) 2020 Outpatient Prospective Payment System (OPPS) & Ambulatory Surgical Center (ASC) Price Transparency Requirements for Hospitals to Make Standard Charges Public final rule (CMS-1717-F2), please visit: https://www.cms.gov/newsroom/fact-sheets/cy-2020-hospital-outpatient-prospective-payment-system-opps-policy-changes-hospital-price

For a fact sheet on the Transparency in Coverage Proposed Rule (CMS-9915-P), please visit: https://www.cms.gov/newsroom/fact-sheets/transparency-coverage-proposed-rule-cms-9915-p

The final rule (CMS-1717-F2) can be viewed here:
https://www.hhs.gov/sites/default/files/cms-1717-f2.pdf

The proposed rule (CMS‑9915‑P) can be viewed here: https://www.hhs.gov/sites/default/files/cms-9915-p.pdf
Source: CMS

Related: White House Fact Sheet

PROMOTING HONESTY AND TRANSPARENCY IN HEALTHCARE PRICES: President Donald J. Trump is taking bold action to give patients the information they need to find high-value care.

• President Trump is announcing two historic rules to make healthcare prices more transparent than ever before.
  
  
• The Department of Health and Human Services (HHS) is finalizing a rule that will require hospitals to make prices publicly available online
  • Hospitals will display prices for shoppable services as a total package in an easy-to-read, consumer-friendly format.
    
    
• The Trump Administration is also proposing a rule to require insurance companies and group health plans to provide cost estimates to enrollees in advance of care.
  • Additionally, we are proposing that these companies make a list of all of their pricing information available to the public.
    
    
• Together, these two rules represent the most aggressive actions taken by any administration to put healthcare price information in the hands of patients.

IMPROVING TRANSPARENCY TO LOWER COSTS: Our healthcare system has long hidden the true cost of care, keeping critical information from patients and limiting competition.

• For years, powerful interests have blocked patients from knowing the true price and quality of healthcare, denying them the information they need to make informed choices.
  • This lack of transparency has enriched industry giants at the expense of regular Americans.
    
    
• Prices for the exact same healthcare services can vary significantly in the same area with little to no correlation to quality.
  
  
• Armed with accurate information, patients can shop around for healthcare services and make the decision that is best for them.
  
  
• By increasing price transparency and empowering patients we can help lower the cost of healthcare and drive competition.
  
  
• Employers from around the country have already utilized priced transparency tools to reduce costs for their employees.

PUTTING AMERICAN PATIENTS FIRST: President Trump is working to protect the vulnerable, improve affordability, provide more options, and increase quality in American healthcare.

• The President signed an executive order to protect and improve Medicare for American seniors.
  
  
• The Trump Administration has taken aggressive action to drive down prescription drug prices and increase the availability of lower priced generics.
  
  • These efforts have contributed to the largest decrease in prescription drug costs in nearly half a century.
    
    
• The President has empowered consumers by working to expand affordable options like Health Reimbursement Arrangements, short-term plans, and Association Health Plans.
  
  
• The President is working to improve healthcare for Americans struggling with conditions like HIV/AIDS, kidney disease, pediatric cancer, Alzheimer’s, and more.
  Source: Office of the President