On July 1, 2022, the “Transparency in Coverage” regulation aimed at health plans finally took effect after several years. The rule, finalized in October 2020, requires certain health plans to 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 provider rates must be provided in machine readable files for patients to access. The cost files must be posted online and be updated at least once a month. Plans that do not comply with the rule face fines of up to $100 per day for each violation and for each patient impacted by the violation – an amount that can quickly become steep for some larger companies with lots of beneficiaries.
Importantly, there are “grandfathered health plans” that do not need to follow these transparency requirements, if they were in existence on March 23, 2010 (the date of the enactment of the Patient Protection and Affordable Care Act) and for as long as they maintain status as grandfathered health plans under the applicable rules.
Companion to Hospital Transparency
This rule is a companion rule that applies to hospitals and went into effect in 2021. The two rules together are aimed at fostering a more competitive market for medical treatment by allowing patients the opportunity to understand healthcare prices prior to the point of service.
As we’ve seen, both rules have been relatively controversial, and despite being in effect for a year, hospitals have largely proven lackadaisical in heeding their price transparency rule. In fact, it wasn’t until June 2022 – a year and a half after taking effect – that the Centers for Medicare and Medicaid Services (CMS) issued the first fines for non-compliance.
Health Insurance Industry Compliance
However, the health insurance industry seems to be taking a different route – UnitedHealthcare has said it plans to comply with the transparency rules and already has a Transparency in Coverage webpage accessible on its website.
Other insurance companies that have taken steps toward compliance include Centene (has published machine-readable files for group health plans and individual market issuers on its website), Anthem (also published machine readable files on its website), and Aetna (readily accessible machine readable files have been published online as well).
Additional Requirements
In 2023 and 2024, additional requirements will take effect, including requirements that the plans must disclose personalized pricing information for covered services to their enrollees through an online consumer tool (or paper form, upon request). An initial list of 500 shoppable services as determined by the Departments will be required to be available through the internet based self-service tool for plan years that begin on or after January 1, 2023. The remainder of all items and services will be required for these self-service tools for plan years beginning on or after January 1, 2024.
The rule also requires plans to disclose negotiated rates and historical net prices for covered prescription drugs. However, the Department of Health and Human Services has indefinitely postponed that particular facet, pending additional rulemaking.