The Trump administration on Friday released two highly anticipated rules that aim to increase price transparency among health care providers and insurers.
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The two rules include the final piece of the 2020 Hospital Outpatient Prospective Payment System (HOPPS) final rule that will require all hospitals operating in the United States to publish the negotiated rates they reach with insurers for health care services, and a proposed rule that would bolster price transparency requirements for health insurers.
HHS said CMS released the latest rules in accordance with an executive order President Trump signed earlier this year that directed the department to increase price transparency in health care.
CMS finalizes requirements that US hospitals post discounted prices
CMS in a fact sheet said the final rule updates calendar year 2020 HOPPS regulations to require all hospitals operating in the United States to publish the negotiated rates they reach with insurers for health care services.
According to CMS, the final rule implements Section 2718(e) of the Public Health Service Act and updates previous guidance that already requires hospitals to make their standard charges available to the public upon request, as well as to publicly post prices for certain services in a machine-readable format.
Under the final rule, hospitals beginning in 2021 will be required to post online "a machine-readable file … that includes all standard charges (including gross charges, discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum negotiated charges) for all hospital items and services." Hospitals under the rule also will have to publicly post "discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum negotiated charges for at least 300 'shoppable' services."
The final rule defines hospital "items and services" as "all items and services, including individual items and services and service packages, that could be provided by a hospital to a patient in connection with an inpatient admission or an outpatient department visit for which the hospital has established a standard charge," CMS said.
CMS in the final rule defines a "hospital" as "an institution in any state in which state or applicable local law provides for the licensing of hospitals, that is licensed as a hospital pursuant to such law, or is approved by the agency of such state or locality responsible for licensing hospitals, as meeting the standards established for such licensing." CMS said the definition includes all institutions enrolled in Medicare "that are licensed as hospitals (or approved as meeting licensing requirements) as well any non-Medicare enrolled institutions that are licensed as a hospital (or approved as meeting licensing requirements)." CMS said federally-owned hospitals that do not typically treat the general public already are considered in compliance with the final rule "because their charges for hospital provided services are publicized to their patients."
The rule also finalizes methods for CMS to monitor hospital compliance with the requirements, as well as actions the agency can take against non-compliant hospitals including warning notices, requesting corrective action plans, and levying civil monetary penalties that could equal as much as $300 per day. CMS also can publicize penalties against non-compliant hospitals. Under the final rule, hospitals will be able to appeal the penalties.
CMS proposes price transparency regulations for insurers
CMS in a fact sheet said the proposed rule, which HHS released in conjunction with the Department of Labor and the Department of the Treasury, would require most group health plans—including self-insured health plans—and health insurance issuers to disclose cost-sharing and price information to enrollees, beneficiaries, and other participants.
Specifically, the proposed rule would require all non-grandfathered group health plans and health insurance issuers offering non-grandfathered health plans in both the individual and group markets to make personalized out-of-pocket cost information available to all beneficiaries, enrollees and authorized representatives, and other participants. Affected entities would have to make the information available for all covered health care services and items via "an internet-based self-service tool and in paper form upon request," CMS said.
CMS said the proposed requirement would allow most consumers "[f]or the first time … to get estimates of their cost-sharing liability for health care for different providers, allowing them to both understand how costs for covered health care items and services are determined by their plan, and shop and compare costs for health care before receiving care."
The proposed rule also would require all non-grandfathered group health plans and health insurance issuers offering non-grandfathered health plans in both the individual and group markets to make public the rates negotiated with providers that are included in a health plan's network, as well as "historical payments of allowed amounts to out-of-network providers through standardized, regularly updated machine-readable files." CMS said affected entities would have to make the data available to all public, including "stakeholders such as consumers, researchers, employers, and third-party developers."
CMS said the agency under the proposed rule would allow health plan issuers "to take credit for … 'shared savings'" generated by empowering consumers to shop for health care services "in their medical loss ratio (MLR) calculations." According to CMS, affected entities under the proposed rule "would not be required to pay MLR rebates based on a plan design that would provide a benefit to consumers that is not currently captured in any existing MLR revenue or expense category."
CMS in the proposed rule also is seeking comments on additional efforts to improve health care price and quality transparency, particularly on:
- How health care quality information can be incorporated into the proposed rule; and
- Whether the agency should also require health insurance issuers to make the cost-sharing information referenced in the proposed rule "through a standards-based application programming interface."
CMS will accept public comments on the proposed rule for 60 days after it is published in the Federal Register. All of the provisions included in the proposed rule—except for the MLR provision—would take effect for plan years that begin at least one year after the proposed rule is finalized. The MLR provision would take effect beginning in the 2020 MLR reporting year.
Azar says changes will 'shin[e] light on the costs of … shadowy [health] system'
HHS Secretary Alex Azar in a release said, "Trump has promised American patients 'A+' health care transparency, but right now our system probably deserves an F on transparency." He added, "Today's transparency announcement may be a more significant change to American health care 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" (Armour, Wall Street Journal, 11/5; HHS release, 11/15; CMS CY 2020 Hospital Outpatient Prospective Payment System Policy Changes fact sheet, 11/15; CMS Transparency in Coverage Proposed Rule fact sheet, 11/15; LaPointe, RevCycleIntelligence, 11/15; King, FierceHealthcare, 11/15).