Federal Price Transparency Requirements: In Mid-Build

In his July 9 Executive Order on promoting competition, President Biden directed the Department of Health and Human Services to “support existing price transparency initiatives for hospitals, other providers, and insurers along with any new price transparency initiatives or changes made necessary by the No Surprises Act or any other statutes.” This statement signaled that the new Administration would build on policies adopted by the Trump Administration to promote more public information about not only the cost-sharing amounts consumers face, but also the prices payers, providers, and drug companies negotiate.

Proponents of greater transparency argue these requirements will promote consumer choice, protect consumers from unexpected costs, and lead to greater competition and lower prices. Critics, however, say these requirements are burdensome and may not provide people with the most relevant information needed to make informed decisions about their health and care. Agreement on the best way forward has been elusive, and both hospitals and health plans have taken regulators to court over these rules. Consumer advocates and the federal government continue to push for greater transparency, however, and researchers are beginning to use the hospital price information currently available.

Transparency Requirements: Building Over Time

For those on the front lines of complying with transparency requirements, it can be hard to keep up, given that a complex set of health information and price transparency requirements have been put forward in law and regulation since 2016. Some of these, such as price transparency rules on hospitals, are currently in place. Healthcare professionals are still waiting on others.

Federal transparency requirements are in mid-build, which means that health information professionals—whether they work for payers, providers, or technology companies—must understand current requirements and look ahead to what is coming down the pike. This article and the accompanying provides a timeline of the various requirements that are already in place, are the subject of final rules yet to be implemented, or are required by law but still to be regulated. 

Already in Place

Transparency requirements that have already been implemented include:

• The 21^st Century Cures Act of 2016, which prohibited the blocking of health information sharing, and introduced standards-based application programming interfaces (APIs). Together, these provisions set the stage for third-party entities to access and use information held within provider electronic health records, billing systems, and other electronic sources, at the request of an individual. ONC promulgated a rule to implement the 21^st Century Cures Act in 2019, with an April 2021 applicability date for the information blocking provisions. The rule states that the scope of electronic health information that must be shared upon request from an entity that has authority to access it is limited to a subset of clinical information defined by the United States Core Dataset for Interoperability until October 2022, when it transitions to broader definition that generally includes all electronic information that would equate to the designated record set.
• The Centers for Medicare and Medicaid Services (CMS) Hospital Price Transparency rule specifically requires hospitals to post two sets of information starting in January 2021: a machine-readable file containing five types of standard charges; and either a consumer-friendly list of shoppable services or a price estimator tool. While this rule was the subject of a lawsuit by the American Hospital Association and other organizations, it has been upheld by the federal appeals court. CMS recently proposed to increase penalties under this rule, in the wake of significant consumer advocate and press attention to lack of compliance.
• The 2019 CMS Interoperability and Patient Access Rule, among other provisions, required a certain set of affected payers and plans to implement APIs that would allow individuals and authorized third parties to access health and claims information for the individual. The patient access API provisions went into effect in July 2021.
• A CMS requirement, for Medicare Part D prescription drug plans and Medicare Advantage plans that offer prescription drug coverage, to provide a Real-Time Benefit Tool for use by prescribers at the time a drug is ordered began in January 2021.

Next in Line

Certain requirements have been regulated but are not yet effective. They include:

• The Transparency in Coverage rule issued jointly by the Departments of Health and Human Services, Labor and Treasury impacts most health plans and issuers in the group and individual market (including self-funded plans, ERISA plans, and plans sold through the exchanges). This rule requires the public posting of machine-readable files, including negotiated price information for in-network providers, allowed amounts for out-of-network providers, and historical net prices for pharmaceuticals starting with plan years beginning on or after January 2022. In 2023, the affected plans and issuers would also have to provide their enrollees with online self-service tools that allow for real-time and personalized access to their cost sharing information. The number of services to be included would expand in 2024. The parts of this rule that require the posting of machine-readable files was the subject of a recent lawsuit filed by the U.S. Chamber of Commerce and other parties. That lawsuit was dropped, however, after the agencies published guidance indicating that it would not enforce the requirements regarding in-network price information and out-of-network allowed amounts until July 2022, and would not enforce requirements for release of information regarding prescription drug files pending future rulemaking.
• A CMS requirement, for Medicare Part D prescription drug plans and Medicare Advantage plans that offer prescription drug coverage, to provide a Real-Time Benefit Tool for use by enrollees that includes patient-specific formulary and cost sharing amounts, as well as alternative medications and a description of any utilization management requirements (such as prior authorization or step therapy).

Coming Down the Pike

President Biden’s Executive Order suggests that the new Administration will continue to build upon the existing requirements outlined above. The Administration must also implement a broad array of provisions included in the Consolidated Appropriations Act (CAA) of 2021, which incorporated both the No Surprises Act to protect consumers from surprise billing and additional transparency provisions. Both health plans and providers will be affected by this law. One proposed rule on surprise billing has been released so far, but it does not include most of the transparency provisions in the CAA.

Future rulemaking will be needed to operationalize the following transparency provisions in the CAA, as well as how some of the CAA provisions align with the Transparency in Coverage rule. In their recent guidance, the agencies note that rulemaking (and therefore enforcement) will not likely be complete until after the statutory deadlines (many of which are Jan. 1, 2022). The agencies also recognized the need to develop standards to support the exchange of advance cost estimates between providers and payers.

• For Health Plans:
  • Insurance card improvements, including both in-network and out-network copays and deductibles
  • Advance cost estimates for planned procedures so that consumers can anticipate their out-of-pocket costs
  • A price comparison tool that allows enrollees to look across providers and assess their likely out-of-pocket costs
  • A continuity of care notice to inform enrollees when providers leave a network, with the option of continuing to receive care with in-network cost sharing for a period of time
  • Protecting patients and improving the accuracy of provider directories by establishing requirements for updates and limiting cost-sharing to in-network rates of a patient relies on faulty provider directory information
  • Standards-based, real time benefit tools for prescribers and enrollees in Medicare; and
  • Reporting on pharmacy benefits and drug costs
• For Providers:
  • Advance good faith cost estimates of planned procedures from providers, which will inform the advance cost estimate required of health plans; and
  • Inclusion of the use of a Real-Time Benefit Tool by prescribers in the Medicare Merit-Based Incentive Payment System (MIPS) performance criteria.

The federal push for greater access to health information and price transparency will continue in the coming years. Health information professionals will be on the front lines of helping ensure people have the best information to make informed choices about their health and care will be directly affected.

Chantal Worzala is principal at Alazro Consulting and is currently working as a consultant to the policy and government affairs team at AHIMA.