The latest U.S. regulations to improve transparency in how healthcare prices are set will come with a learning curve for many organizations.
Healthcare pricing has always been confusing and intimidating to even the savviest of consumers. Whether it’s firms trying to budget for the cost of future care or employees making informed plan choices during enrollment, knowing how much healthcare will cost involves predictions about the unknown.
Following the introduction of the new regulations, health plan sponsors must now post their negotiated prices for in- and out-of-network providers on a public website. The posted files should meet certain transparency standards and be updated regularly. Plan sponsors also must have a price comparison tool and comply with other transparency mandates.
The Centers for Medicare & Medicaid Services (CMS) issued its final rule on transparency in coverage back in late 2020, but its implementation was delayed until the middle of 2022. The phased implementation will continue through 2024.
Here are six things to know about this new era of health plan transparency.
1. The push for transparency took a long time to come to fruition and now has broad support.
The new CMS rule has been described as a “game-changer” that has the potential to transform how we consume healthcare. Employers have been asking for this type of transparency for their plan participants for years. The push to create the new transparency laws was bipartisan, meaning a change of party control in Congress or the White House won’t undo the progress made.
2. Transparency will (eventually) benefit plan sponsors.
In the past, getting any kind of price data required data use agreements, actuaries, and an infrastructure for summary and analysis. Now, the data will be publicly available, with opportunities to analyze, interpret and use it to improve outcomes. While it will take some time, faster and easier access to this data will empower plan sponsors to learn more about the coverage they offer. It will also benefit companies, allowing them to go beyond their own data and partner with a trusted advisor to learn more about how their plans stack up in the market and how they can provide the best coverage to their employees.
3. The data has new and multiple practical applications.
It’s not uncommon to see huge variations in price, even in similar circumstances. The cost of some high-volume procedures, such as an MRI or knee replacement, can vary 300 percent in the same market. Under the new regulation, companies will be able to help their employees know what to expect. The fact that price data is no longer siloed and private will also allow companies to begin directing employees to lower cost providers.