CMS releases proposed and final rules to make hospitals and insurers post prices, cost-sharing information

Hospital prices
The Centers for Medicare & Medicaid Services released a final rule to make hospitals post payer-negotiated rates online and a proposed rule to require insurers to post real-time cost-sharing information. (Alessandra Bergamin/KHN illustration; Getty Images)

The Trump administration released a final rule to require hospitals to publish payer-negotiated prices and a proposal to mandate insurers post online real-time cost-sharing information. 

The rules were released Friday by the Centers for Medicare & Medicaid Services (CMS) in anticipation of a speech by President Donald Trump on Friday afternoon. 

The final rule gives hospitals more time to post payer-negotiated rates. The original proposed rule, released as part of the hospital outpatient payment rule, required hospitals to post prices starting in 2020. 

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Now, hospitals have until 2021 to comply with the rule.

Under the rule, hospitals will have to post in a searchable and convenient format the payer-negotiated rates for 300 shoppable services. The hospitals also have to post a single data file with negotiated rates for all services that can be used by consumers, researchers and app providers.

The proposed version generated major opposition from both the hospital and insurer industries, which charged it was unworkable as contracts are not automated in some facilities and that the cost would be prohibitive. 

CMS Administrator Seema Verma said on a call with reporters that the agency doesn't expect a large financial impact from the rule.

"It is a very tiny percentage of overall revenue, less than 1%," Verma said. "Many hospitals and insurance companies already providing this type of price transparency."

Hospital groups have also charged that CMS doesn't have the authority to implement the rule, hinting at a potential legal challenge.

HHS Secretary Alex Azar conceded his agency could be sued.

"We may face litigation but we feel we are on a sound legal footing," he said on a call with reporters. "I would hate to see hospitals take a play out of big pharma’s playbook and oppose price transparency for the American patient."

Hospital groups also charged in comments to the rule that insurers, not hospitals, should be the primary source of price information and insurers should inform and educate their members on potential-out-of-pocket costs.

But CMS balked at the prospect that insurers alone should be responsible for price transparency.

“At least one key reason that insurers cannot alone bear the burden is that, in numerous instances, they are not participants in the transaction,” the final rule said.

The rule added that some insured patients who consider “paying in cash have an interest in understanding hospitals’ cash prices, or for employers who want to contract directly with hospitals.”

The insurance rule would require insurers to disclose on a public site their negotiated rates for in-network providers and allowed amounts paid for out-of-network providers, CMS officials said. 

"Making this information available to the public is intended to drive innovation, support informed price-conscious decision-making and promote competition in the healthcare industry," officials said. 

Insurers would also have to post real-time, personalized access to cost-sharing information such as an estimate of a customer's cost-sharing liability for all covered items and services, agency officials added. 

Insurers have to set up an online tool that "most group health plans and health insurance issuers would be required to make available to all of their members, and in paper form, at the consumer's request," officials said.

HHS also proposes as part of the rule that insurers can introduce plans that would encourage consumers to shop for services from lower-cost, high-value providers. The share of the resulting savings from consumers who take up these plans will factor into an insurer’s medical loss ratio calculations, CMS said.

“HHS believes this proposal would 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,” the agency added in a release.

This is a developing story. Check back later in the day for updates.

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