The Trump administration has finalized a rule that will require private insurers to provide members upfront prices—including real-time cost-sharing estimates—they’ve negotiated with providers.
Beginning in 2023, insurers will be mandated to offer an online shopping tool or similar platform that includes an out-of-pocket cost estimate and negotiated prices for 500 of the “most shoppable” services, Department of Health and Human Services Secretary Alex Azar said on a call with reporters Thursday morning.
In 2024, this requirement will be extended to all services, Azar said. In addition, beginning in 2022 insurers must post online a series of documents that include their in-network negotiated provider rates, out-of-network coverage rates and in-network drug pricing.
“For too long, American patients have been at the mercy of a shadowy system that hides crucial information,” Azar said. “This shadowy system needs to change.”
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While payers will have to develop price transparency tools themselves in the next couple of years, administration officials are hoping that posting the data online will allow third-party developers to design tools for consumers as well.
Centers for Medicare & Medicaid Services Administrator Seema Verma said on the call that the drug pricing requirement was newly added to the finalized version of the rule.
The rule echoes a similar regulation finalized late last year that requires hospitals to post their negotiated rates with insurers online beginning in January. That rule has faced significant pushback from across the industry, with providers and payers both arguing that posting such information diminishes their negotiating power.
Hospitals have turned to the courts in hopes of stymying the rule, with limited success so far. A lower court upheld the administration’s rule, and federal appeals court judges appeared skeptical of the arguments against the regulation in a hearing earlier this month.
Insurers are also unlikely to accept the new rule without a fight. In comments on the proposal, they argued that launching such tools would come at a significant cost, and providing the data would confuse their members.
The Blue Cross Blue Shield Association noted that estimates from the firm Bates White project that setting up and maintaining the mandated transparency tool would cost an insurer $13.63 million, a figured 26 times higher than the administration’s $510,000 estimate.
Health plans also argued that posting pricing data without quality information alongside could lead patients to believe that higher prices equate to higher quality, driving up costs.
Source: Fierce Healthcare
