Today (10/29/2020) the long awaited Federal Transparency in Coverage regulations were finalized and published by the Trump Administration. The text of the final regulation can be found here https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/CMS-Transparency-in-Coverage-9915F.pdf.
These are the most sweeping and comprehensive rules to hit the healthcare transparency industry and affects nearly all health plans and self-insured employers. The goal of the rule is to make healthcare price information accessible to consumers to allow them to compare prices and shop for their healthcare.
The Final Rule takes two approaches to making this information available.
Internet Based Tool
First, health plans will be required to make available to 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.
- An initial list of 500 shoppable services, as determined by the Departments, will be required to be available via an 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.
If requested, the information must also be sent to an enrollee in paper form within 2 business days of the request.
Machine Readable Files
Second, health plans 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. Plans and issuers will display these data files in a standardized format and will provide monthly updates. These files are required to be made public for plan years that begin on or after January 1, 2022.
- 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.
- 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.
- Prescription drug prices must include negotiated prices and historical net price to the health plan (net of rebates, dispensing fees, discounts, and other price concessions).
Medical Loss Ratio and Shared Savings Programs
The final rule permits health plans to take credit for incentive payments made to fully insured members in their Medical Loss Ratio (MLR) calculations by permitting the health plan to include the incentive payments for shared savings program ( such as our own own SmartShopper Program) in the numerator of the MLR calculation. This positive change is effective for the 2020 MLR Reporting Year (for MLR reports filed by July 31, 2021). This change to the MLR provision will provide health plans with further reason to make shared savings program such as SmartShopper available to its fully insured membership.
We expect these rules to be challenged in court by the health plans, similar to what the hospitals did in 2020. We will be actively monitoring any judicial action related to these regulations.