Transparency in Coverage Final Rule Aims at Healthplan Pricing Information

A new final rule is in effect as of July 1, 2022. CMS says that the Transparency in Coverage Final Rule is the first of several rules that will be met with stronger compliance enforcement in accordance with the No Surprises Act of 2021 and instead of targeting hospitals for the clear publication of potential prices for a range of provided services, this time the target of regulation is health insurers.The Hospital Price Transparency Final Rule issued by the Centers for Medicare and Medicaid Services, which went into effect in on January 1, 2021, failed to take off with hospitals arguing that there was little clarity in the language of the rule and even less by way of enforcement.

In Arizona, for example, nonprofit group Patient Rights Advocate found that 20 of the 25 hospitals evaluated in Arizona are not in compliance with the rule that requires posting prices. According to AZFamily, only 14% of hospitals nationwide are in compliance. From Cynthia Fisher, founder and chair of Patient Rights Advocate:

They’re supposed to post the actual prices by discounted cash price as well as every single negotiated rate they have for care by every insurance carrier and every health plan. The only way we can get to a competitive, fair market is to have actual prices. Everyone knows estimates don’t work.

This may sound familiar to anyone who has followed the series of non-starter declarations and deadlines of the Hospital Price Transparency Final Rule, but the Transparency in Coverage Final rule will require insurers to disclose pricing for covered items and services. Insurers must include negotiated rates with participating providers and include the maximum billed amounts for out-of-network provided services, according to Forbes.

Physician’s Weekly notes that these rules are actually far broader than the scope of those that went into effect last year for hospitals. Specifically, insurers must post the amounts paid for all physicians, hospitals, surgical centers and nursing facilities. Insurers could be fined as much as $100 per day for each violation and for each affected enrollee if they fail to provide data. From Jeffrey Leibach, partner with consulting firm Guidehouse:

When you start doing the math, you’re talking trillions of records… Get your calculator out: All of a sudden you are in the millions [in fines] pretty fast.

But the Transparency in Coverage Final Rule could get caught in the same snags as hospitals. Medpage Today notes that in the Hospital Price Transparency Rule, there was a great deal of room for interpretation in the definition of compliance.

If the industry hopes to improve compliance, then the Centers for Medicare and Medicaid Services (CMS) must lay out clear rules, including what is expected and what is forbidden, and ensure they have closed any potential loopholes in the process.