Comments on Proposed Transparency in Coverage...

January 29, 2020

Centers for Medicare & Medicaid Services
Department of Health and Human Services
Attention: CMS-9915-P
P.O. Box 8010
Baltimore, MD  21244-8010

Re: Comments on Proposed Transparency in Coverage Rule (CMS-9915-P)

Dear Ms. Bryant:

The HR Policy Association welcomes the opportunity to provide comments to the Department of Health and Human Services, the Department of Labor, and the Department of the Treasury (“the Departments”) regarding the proposed rule on Transparency in Coverage that was published in the Federal Register on November 27, 2019.[1]

The HR Policy Association (“the Association”) is the leading organization representing chief human resource officers of 390 of the largest employers in the United States.   Collectively, their companies provide health care coverage to over 21 million employees and dependents in the United States and spend more than $120 billion annually on health care benefits and related taxes.  Association members have struggled for years to get full and complete access to their claims data without restrictions on how they use it. They have long backed increasing price and quality transparency to enable employers to reduce health care costs and implement value-based plan designs.  The American Health Policy Institute, which was created by the Association, also has published several reports on the importance of increasing price and quality transparency.[2] 

The Association strongly supports the proposed rule and while much of the focus is on the need to increase transparency for consumers, our members believe the biggest impact on spending and costs will come from self-insured employers utilizing the data that will become publicly available.  The data will allow these employers to improve their networks, negotiate lower prices on behalf of their plan participants, increase quality, and better implement value-based plan designs.  Most of our members have already seen success in implemented price and quality transparency tools to incentivize their plan participants to make cost conscious decisions when purchasing health care services.  However, a large percentage of health care is not “shoppable”[3] and once patients reach their deductible, they may have little incentive to price shop.[4]  Studies also show that relatively low percentages of employees use price transparency tools despite employer efforts to encourage their use.[5]  Enabling employers to better use health care price and quality data with the help of third-parties will substantially increase the benefits of the rulemaking.

Employer efforts to more fully utilize claims data to reduce costs have been, and are still, stymied by the view of many in the health care supply-chain that the data they handle is proprietary.[6]  In fact, as data has become increasingly monetized over the past ten years, efforts to increase transparency by self-insured employers have been thwarted.[7]  As noted in the proposed rule some commenters advised HHS to carefully consider how transparency should be implemented, “cautioning that the proprietary and competitive nature of payment data should be protected.”[8]  The Association strongly urges the Departments to reject this argument.   Market-based solutions cannot work to address the health care cost and quality problems in the United States without a degree of transparency that far exceeds what is available today.  The Departments should take the position that transparency is a given and there is a presumption in favor of transparency and disclosure.[9]

Employers, as ERISA welfare plan fiduciaries, also appear to have a duty to verify that the health plan service providers offering services to the plan meet the fiduciary’s quality standards, and that the fees paid to the plan’s service providers and health care providers, are “reasonable” considering the quality of healthcare services provided to the plan.  Executing this duty is challenging without access to quality and pricing information from health care providers and carriers that would allow a plan fiduciary to weigh the benefits received under the plan against the cost of services for each health care provider.  It is therefore in the best interest of plan participants that all fiduciaries have the unfettered right to access, analyze, and compare health servicing provider pricing, network fee arrangements, and quality data, and to communicate that information to stimulate competition.[10]  Federal policy should be reviewed with an eye towards making clear that fiduciaries have such rights.[11]

The Association’s member companies have a longstanding commitment to providing health plan participants with price and quality information, and the Association applauds the Departments effort to significantly increase transparency.  To assist the Departments in preparing the final rule, the Association respectively provides the following comments.

Phase-in the Disclosure Requirements Over Two or Three years

The Departments acknowledge the proposed rule includes “historic” and “revolutionary” price transparency requirements that “may be a more significant change to American healthcare markets than any other single thing we've done.”  The Association agrees and, respectfully, requests the final rule includes a lengthy phase-in period to give employers, third-parties, issuers and health care providers time to modify their contractual agreements to provide all of the data the proposed rule requires to be disclosed.

The Departments correctly assume that fully-insured employer health plans would rely on health insurance issuers and most self-insured employer health plans would rely on issuers or third-party administrators (TPAs) to develop and update the proposed negotiated rate file and allowed amount file,[12] and to develop and maintain the internet-based self-service tool.[13]  In fact, the Association believes that very few, if any, self-insured employers would not rely on issuers or TPAs to comply with these disclosure requirements.

Developing the proposed machine-readable negotiated rate and allowed amount files, and the internet-based self-service tool will take considerable time.  However, the effort to develop disclosure requirements for the proposed machine-readable negotiated rate and allowed amount files will be considerably less than the effort it will take to develop the internet-based self-service tool.  In fact, it may be easier to develop the internet-based self-service tool after the machine-readable negotiated rate and allowed amount files are available, particularly if the issuers and TPAs design the files in a manner that provides application program interfaces (APIs) access to data.

The Association, therefore, recommends the Departments phase-in the proposed machine-readable negotiated rate and allowed amount files in year-one, followed by the internet-based self-service tool in year-two.  Moreover, the internet-based self-service tool should itself be phased-in beginning with products and services that are truly shoppable in year-two, and expand the tool to less shoppable products, services, and more complicated bundled payments in year-three.  Such a phased-in approach would ease implementation burdens and substantially increase the benefits of the rulemaking.

To reduce compliance costs, the Association also recommends the disclosed data be updated twice a year for the first year, then quarterly in later years.

Improve the Safe Harbor Protections for Employer Plans

There are concerns that certain aspects of the data may not be available to self-insured employers, yet employers could be penalized for not disclosing the required data.  At present, it is not uncommon to find insurer, prescription benefit manager, and health care provider contracts that limit employer data rights.[14]  For example, many health care providers require plan administrators to sign “gag agreements” that prevent the administrator from fully utilizing health care pricing and quality data or sharing such important information with their employees.[15]  Moreover, while insurers provide employers access to claims data, insurers often do not provide employers with access to what insurers pay providers.[16]  Furthermore, health care providers and hospitals are not subject to this rule and could withhold data employers need to comply with the disclosure requirements.  Undoing and modifying these contractual agreements to fully comply with the proposed rule will take time and considerable effort.

The Association applauds the Departments for recognizing this issue and strongly supports the proposed §147.210(b)(3) where an employer health care plan satisfies the required cost-sharing disclosures to plan participants with an internet-based self-service tool if the employer enters into a written agreement under which the issuer agrees to provide the required data.   If the issuer fails to do so, then the issuer, not the employer, violates the transparency cost-sharing disclosure requirements.[17]  However, the Association recommends the special rule in proposed §147.210(b)(3) be expanded to include any entity an employer plan has to enter into a written agreement with to obtain the necessary data to comply with the required disclosure.

The Association also supports the proposed §147.210(c)(4)(i) where an employer health care plan satisfies the required disclosure of in-network provider negotiated rates and out-of-network allowed amounts if the employer enters into a written agreement under which the issuer agrees to provide the required data, and if the issuer fails to do so, then the issuer, not the employer, violates the in-network provider negotiated rate and out-of-network allowed amount disclosure requirements.[18]  However, the Association is concerned that if health care providers withhold data employers need to comply with proposed §147.210(c) from a TPA or administrative services organization  the employer uses to manage their health care plans, under proposed §147.210(c)(4)(ii) the employer will have violated the proposed rule through no fault of their own.   Therefore, the Association recommends proposed §147.210(c)(4)(ii) be deleted and proposed §147.210(c)(4)(i) be expanded to include any entity an employer plan has to enter into a written agreement with to obtain the necessary data to comply with the required disclosure.

Proposed Internet-based Self-service Tool Is Too Prescriptive

The Association is concerned the proposed functionality of the internet-based self-service tool is overly prescriptive.  The Association recommends proposed §147.210(b)(1) be limited to just proposed (i) through (iv), and the rest of §147.210(b)(1) be moved to an appendix of what employers should consider disclosing.[19]  This will enable the private sector to develop innovative solutions that best fit the needs of their plan participants.  Similarly, the Association recommends the Departments move proposed §147.210(b)(2)(i)(A) through (C) to an appendix on what types of functionality employers should consider when developing their internet-based self-service tool.

Disclosed Data Should Be Available Through a Standards-based API

The Association supports making the cost-sharing liability, in-network negotiated rates, and out of network allowed amounts available through standards-based APIs with appropriate privacy and security precautions.  This would allow third-party vendors to build consumer-friendly applications so that employers and employees are able to easily access the information and maximize the benefits of the proposed rule.

Employers Should Be Encouraged, But Not Required, to Provide Quality Data

The Association agrees with the Departments that information relating to the quality of prospective health care services is critical to increasing the value of health care. Many employer health plans include quality data in the provider directories and transparency tools they provide to plan participants.

Quality measures, in addition to price information, are essential for making the transformation to a value-based delivery and payment system and to ensure employees and patients are not basing their health care decisions on price alone.   However, measuring and reporting quality metrics has become a barrier to actually improving quality.  One survey of 23 health insurers found insurers used 546 provider quality measures, few of which matched across insurers or with the 1,700 measures used by federal agencies.[20]  Therefore, employers should be encouraged, but not required, to provide quality data along with the transparency disclosures in the proposed rule.  Much more needs to be done on simplifying and developing standardized quality measures that are evidence-based, generally understandable, and consumer relatable, before requiring employers to disclose quality data.

* * * * *

We urge the Departments to consider these recommendations when developing the final rule and we look forward to working with you to substantially increase the amount of health care data that is publicly available. 

Sincerely,

D. Mark Wilson
President, American Health Policy Institute
Vice President, Health & Employment Policy,
HR Policy Association