HHS and DOL Announce Comprehensive Transparency Rules for Insurers, Employer Plans, and Hospitals

November 15, 2019

The U.S. Department of Health and Human Services and the U.S. Department of Labor announced two rules, one final and one proposed, which are described by HHS as “a historic step” toward giving consumers real-time, personalized, access to cost-sharing information for all covered health care items and services through an online tool that employers will have to make available to all of their members.

Under the proposed “Transparency in Coverage” rule, self-insured employers and insurers must:

  • Make available to plan participants personalized out-of-pocket cost information for all covered health care items and services through an internet-based self-service tool and in paper form upon request; and

  • Make available to the public, including stakeholders such as consumers, researchers, employers, and third-party developers, the in-network negotiated rates with their network providers and historical payments of allowed amounts to out-of-network providers through standardized, regularly updated machine-readable files.

Under the final hospital transparency rule, beginning in 2021, hospitals must:

  • Provide a public machine-readable file online 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; and

  • Publicly disclose in a consumer-friendly manner discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum negotiated charges for at least 300 shoppable services

The proposed Transparency in Coverage rule would be effective one year after it is finalized, which may not be until 2022.

Quality transparency issues remain:  A common set of quality measures that all stakeholders can agree on is needed to balance and provide context to the price data these rules will make available to consumers.

Greater transparency will be costly:  Implementing these rules will initially increase administrative costs on a per-member/per-month basis.  In the long-run, the substantial saving opportunities promised by greater transparency could result in greater stakeholder consolidation and uncertain impacts on prices.

Outlook: Both of these rules will be challenged in court, which may delay or prevent their implementation.  The American Health Policy Institute will be providing greater information regarding the impact of these rulemakings.