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FYI: White House Health Care Price Transparency Rule

The Trump Administration finalized a rule yesterday on price transparency for medical services and prescription drugs that will ensure Americans know how much healthcare will cost in advance and will allow them to make fully informed and value-conscious decisions.

The Trump Administration finalized a rule yesterday on price transparency for medical services and prescription drugs that will ensure Americans know how much healthcare will cost in advance and will allow them to make fully informed and value-conscious decisions. See below for the statement from the White House about how this rule will benefit patients:

"Today, the Trump Administration finalized the most far-reaching price transparency reform in the history of American healthcare – fulfilling a commitment President Donald J. Trump made to the American people. As a result of today's action, health insurance companies will finally be required to disclose to the public the price they pay for covered services and prescription drugs. Further, insurance companies will be required to disclose the estimated cost a patient will have to pay, prior to that patient receiving care.

"In June of last year, President Trump signed the healthcare transparency Executive Order and promised the American people he would take on the special interests who have kept patients in the dark for generations. Coupled with this Administration's previous action on hospital price transparency, today's rule on insurer price transparency follows through on that commitment to give patients unprecedented visibility into their care and how much it costs."

For more on the Executive Order the President signed last June, which can be read in full here, see the below fact sheet:

President Donald J. Trump is Putting American Patients First by Making Healthcare More Transparent
"We should also require drug companies, insurance companies, and hospitals to disclose real prices to foster competition and bring costs down."
- President Donald J. Trump

IMPROVING PRICE AND QUALITY TRANSPARENCY: President Donald J. Trump is delivering on his promise to bring more healthcare price and quality transparency for American patients.

  • President Trump is signing an Executive Order that directs his Administration to take steps to improve price and quality transparency in healthcare.
  • The Department of Health and Human Services (HHS) will require hospitals to publicly disclose amounts that reflect what people actually pay for services in an easy-to-read format.
  • At President Trump's direction, HHS will begin the process of making information on out-of-pocket spending more readily available to patients before they receive care.
  • Researchers, innovators, and providers will get more access to data that will help them develop tools to provide patients with more information about healthcare prices and quality.
  • The Administration will improve quality measurements and make them public.
  • The President's order also improves consumers' incentives to shop for care by expanding the benefit of Health Savings Accounts (HSAs) and other tax-preferred health accounts.

EMPOWERING PATIENTS WITH INFORMATION: Our healthcare system has long hid the true cost of care, keeping critical information from patients' hands and limiting competition.

  • For too long, powerful interests have blocked patients from knowing the true price and quality of healthcare, denying them the information they need to make informed choices.
  • Lack of transparency contributes to soaring costs, suppressed competition, and lower quality.
  • Patients face wide variations in prices, often for the same services, due to a lack of transparency.
  • When armed with accurate information, patients can often identify savings by shopping around for healthcare services.
  • Publicizing the true prices of healthcare services will allow Americans to make choices that fit their personal healthcare needs and financial situations.
  • Price and quality transparency will promote increased competition among healthcare providers, leading to better value and more innovative healthcare.

INCREASING TRANSPARENCY TO LOWER COSTS: President Trump is working to lower healthcare costs by improving transparency and promoting competition.

  • The President signed legislation to end "gag" clauses that prevented pharmacists from letting patients know about potentially lower prices for drugs.
  • Recently, the Trump Administration took action to require drug manufacturers to publicly disclose drug prices in their television ads.
  • The President has taken action to empower consumers and expand affordable options like Health Reimbursement Arrangements, short-term plans, and Association Health Plans.
  • In 2018, President Trump launched a blueprint on ways to drive down drug prices and find savings for American patients.
    • After the President announced the blueprint, more than a dozen major drug makers enacted price freezes, reductions, or rollbacks.
    • Last year, prescription drug prices decreased for the first time in nearly 50 years.

Now that the final rule has been formally issued, the Department of Health And Human Services further explained that it will allow, "more than 200 million Americans with private-sector insurance (both individual-market and employer-based) will have access to a list of real-time price information, including cost-sharing, enabling them to know how much care will cost them before going in for treatment." HHS Secretary Alex Azar issued the following statement about how this new rule will help patients and consumers:

"President Trump's actions to require full transparency on prices throughout our healthcare system may be the single most pro-patient, pro-consumer reform American healthcare has ever seen. We want every American to be able to work with their doctor to decide on the healthcare that makes sense for them, and those conversations can't take place in a shadowy system where prices are hidden. With more than 70 percent of the most costly healthcare services being shoppable, Americans will have vastly more control over their care, delivering on the President's vision of better care, lower costs, and more choice."

The complete finalized rule can be read here and a fact sheet courtesy of the Centers for Medicare & Medicaid Services is available here and below:

Transparency in Coverage Final Rule Fact Sheet (CMS-9915-F)

The Transparency in Coverage final rule released today by the Department of Health and Human Services (HHS), the Department of Labor, and the Department of the Treasury (the Departments) delivers on President Trump's executive order on Improving Price and Quality Transparency in American Healthcare to Put Patients First.[1] This final rule is a historic step toward putting health care price information in the hands of consumers and other stakeholders, advancing the Administration's goal to ensure consumers are empowered with the critical information they need to make informed health care decisions.

The requirements in this rule will give consumers the tools needed to access pricing information through their health plans. This rule builds upon previous actions the Administration has taken to increase price transparency by giving patients access to hospital pricing information. The Administration has already finalized requirements for hospitals to disclose their standard charges, including negotiated rates with third-party payers. The requirements in the Transparency in Coverage final rule will reduce the secrecy behind health care pricing with the goal of bringing greater competition to the private health care industry.
For too long, Americans have been in the dark about the cost of their health care until after they obtain services and receive a bill. This rule will require most group health plans, and health insurance issuers in the group and individual market to disclose price and cost-sharing information to participants, beneficiaries, and enrollees. The Departments are finalizing a requirement to give consumers real-time, personalized access to cost-sharing information, including an estimate of their cost-sharing liability, through an internet based self-service tool. This requirement will empower consumers to shop and compare costs between specific providers before receiving care. Through this final rule, plans and issuers will also be required to disclose on a public website their in-network negotiated rates, billed charges and allowed amounts paid for out-of-network providers, and the negotiated rate and historical net price for prescription drugs. Making this information available to the public will drive innovation, support informed, price-conscious decision-making, and promote competition in the health care industry.

Making Health Care Price Information Accessible for Consumers

This final rule includes two approaches to make health care price information accessible to consumers and other stakeholders, allowing for easy comparison-shopping.

  • First, most non-grandfathered group health plans[2] and health insurance issuers offering non-grandfathered health insurance coverage in the individual and group markets will be required to make available to participants, beneficiaries and enrollees (or their authorized representative) personalized out-of-pocket cost information, and the underlying negotiated rates, for all covered health care items and services, including prescription drugs, through an internet-based self-service tool and in paper form upon request. For the first time, most consumers will be able to get real-time and accurate estimates of their cost-sharing liability for health care items and services from different providers in real time, allowing them to both understand how costs for covered health care items and services are determined by their plan, and also shop and compare health care costs before receiving care. An initial list of 500 shoppable services as determined by the Departments will be required to be available via the internet based self-service tool for plan years that begin on or after January 1, 2023. The remainder of all items and services will be required for these self-service tools for plan years that begin on or after January 1, 2024.
  • Second, most non-grandfathered group health plans or health insurance issuers offering non-grandfathered health insurance coverage in the individual and group markets will be required to make available to the public, including stakeholders such as consumers, researchers, employers, and third-party developers, three separate machine-readable files that include detailed pricing information. The first file will show negotiated rates for all covered items and services between the plan or issuer and in-network providers. The second file will show both the historical payments to, and billed charges from, out-of-network providers. Historical payments must have a minimum of twenty entries in order to protect consumer privacy. And finally, the third file will detail the in-network negotiated rates and historical net prices for all covered prescription drugs by plan or issuer at the pharmacy location level. Plans and issuers will display these data files in a standardized format and will provide monthly updates. This data will provide opportunities for detailed research studies, data analysis, and offer third party developers and innovators the ability to create private sector solutions to help drive additional price comparison and consumerism in the health care market. These files are required to be made public for plan years that begin on or after January 1, 2022.

In this rule, HHS will also allow issuers that empower and incentivize consumers through plans that include provisions encouraging consumers to shop for services from lower-cost, higher-value providers, and that share the resulting savings with consumers, to take credit for such "shared savings" payments in their medical loss ratio (MLR) calculations. HHS will allow this to ensure that issuers would not be required to pay MLR rebates based on a plan design that would provide a benefit to consumers that is not currently captured in any existing MLR revenue or expense category. HHS believes this change will preserve the statutorily-required value that consumers receive for coverage under the MLR program, while encouraging issuers to offer new or different value-based plan designs that support competition and consumer engagement in the healthcare market.



[2] Grandfathered health plans are health plans that were in existence as of March 23, 2010, the date of enactment of PPACA, and that are only subject to certain provisions of PPACA, as long as they maintain status as grandfathered health plans under the applicable rules. Under section 1251 of PPACA, section 2715A of the PHS Act does not apply to grandfathered health plans. This rule would not apply to grandfathered health plans (as defined in 26 CFR 54.9815-1251, 29 CFR 2590.715-1251, 45 CFR 147.140).