Five Takeaways from CMS’ Transparency in Coverage Rule

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By Matthew Albright

While the industry’s attention was drawn to the Centers for Medicare & Medicaid Services’ (CMS) publication of the healthcare price transparency rule directed at hospitals in mid-November – which is already bound for litigation – CMS also released a proposed price transparency rule with requirements for health insurers and self-insured health plans. The rule is in comment period, set to end January 14, 2020, and a final rule can be expected mid to late 2020. 

  1. The rule, titled the Transparency in Coverage proposed rule, requires commercial payers to create and maintain two price transparency resources: 
  • a pre-service explanation of benefits (EOB) online tool for plan members 
  • an online data dump for researchers, government regulators and the general public

2. By inputting a query about a provider or specific healthcare services, the pre-service EOB tool must be able to provide:

  1. a member’s estimated out-of-pocket costs
  2. the amount the member has spent or used toward deductibles, out-of-pocket max and other limits
  3. the payer-provider negotiated amount for the service in dollars (if in-network)
  4. out of-network allowed amount (if out-of-network)
  5. a list of services in any bundled payment for services, services/items that requires pre-requests and various notices, if applicable

Members should be able to search the tool by inputting an in-network provider name, a description of the healthcare service, or a zip code or other factor used by the plan to ascertain cost sharing for in-network providers or allowed amounts for out-of-network providers. Despite the rule’s intent that the tool use “information in the manner most familiar to” enrollees, members should also be able to search by inputting a billing code of the healthcare service they seek.  

3. CMS acknowledged in the rule that the required online data dump is not meant for consumers, though the rule mentions uninsured individuals may be able to use it. Instead, the online data dump is meant to “put price information in the hands of those best equipped to use it in a manner that will support greater consumerism in the health care market.” (84 FR 65478). The rule lists IT developers, industry researchers, government regulators, and group health plan sponsors shopping for issuers or negotiating with providers as beneficiaries of the data dump. 

4. The rule proposes to allow plans that set up shared savings programs, encouraging members to shop for services from lower-cost, higher value providers, to take credit for such ‘‘shared savings’’ payments in their medical loss ratio (MLR). (84 FR 65489)

5. According to the rule’s impact analysis, the one-time development of both the pre-service EOB tool and the online date dump should cost a plan around $450,000, while training and maintenance of both resources over three years should cost just $56,000. The rule’s provisions are estimated to cost ~ $1.5 billion for the entire industry for the first three years. 

In its current form, the proposed rule promises to be litigious. CMS has extended the comment period for the proposed rule by two weeks to January 29, 2020. 

Matthew Albright is Chief Legislative Affairs Officer at Zelis, a healthcare and financial technology company [link: https://www.zelis.com/about-us/]. Albright previously served as Director of the Administrative Simplification Group for the Centers for Medicare & Medicaid Services where he drafted regulations and developed policy in accordance with the Affordable Care Act mandates.

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