Certain health insurers are required to start publicly disclosing in-network and out-of-network rates beginning Friday under a Trump-era price transparency rule finalized two years ago. Early signs look good for compliance.
The rule went into effect in January 2022. But last summer, the CMS delayed enforcing this part of the price transparency rule, citing the “considerable time and effort” required to make the machine-readable files available the way the regulations require.
Now, starting Friday, most group health plans and issuers of group or individual health insurance must post the cost files online, and update them at least once a month. Noncompliant plans could be fined up to $100 per day for each violation and each patient affected by the violation, a price tag that could become steep for companies with a large number of beneficiaries.
The rule, finalized in October 2020 by the Trump administration, requires certain health plans disclose in-network provider rates for all covered items and services, along with allowed amounts for, and billed charges from, out-of-network providers.
The goal of the “Transparency in Coverage” regulation, along with a twin rule applying to hospitals that went into effect last year, is to encourage a more competitive market for medical coverage and treatment by lifting the curtain on healthcare prices before the point of service.
Both rules have proved controversial, and faced lobbying and legal challenges from hospital and payer groups.
The price transparency rule applying to hospitals has been met with a lack of compliance from the industry.
One analysis published in February found only 14% of U.S. hospitals were complying with the regulation, which requires hospitals to post a consumer-friendly price list for common services online. Another from this year found just 6% of facilities had both the required accessible file and a shoppable display.
In June, the CMS issued the first fines for noncompliance — a joint $1.1 million — to two Georgia hospitals.
It’s unclear how the rule’s rollout within the health insurer industry will pan out, though early signals are positive for compliance. UnitedHealthcare, the biggest private payer in the U.S., has said it intends to comply fully with the rules, and already has a Transparency in Coverage website online.
Centene, which focuses largely on government plans, has already published machine-readable files for group health plans and individual market issuers on its website. So has Anthem, which rebranded as Elevance Health this month.
CVS Health-owned Aetna issued a coverage update in June saying it planned to publish the information online beginning July 1.
Other key tenets of the payer rule kick into place in 2023 and 2024, including requirements that plans must disclose personalized pricing information for covered services to their enrollees through an online consumer tool, or paper form upon request.
The rule also requires plans to disclose negotiated rates and historical net prices for covered prescription drugs. However, the HHS has delayed enforcing that requirement indefinitely pending additional rulemaking.
The U.S. Chamber of Commerce and a major lobby for pharmacy benefit managers, which are increasingly in the hot seat for their role in climbing drug prices, sued the government last year to block disclosing those prices. Those cases have since been dismissed.