ADMINISTRATION ISSUES FINAL TRANSPARENCY RULES REQUIRING HEALTH INSURERS TO DISCLOSE CONSUMERS' ESTIMATED OUT-OF-POCKET PAYMENTS

The Administration has issued its final rules requiring health insurers to make pricing and payment information publicly available for use by consumers, providers, and researchers. Specifically, health insurers in both the group and individual health insurance markets, including self-funded plans, will be required to provide a personalized estimate for consumers of their out-of-pocket costs for 500 shoppable services, which include procedures, prescription drugs, and durable medical equipment, beginning January 1, 2023. Personalized out-of-pocket estimates for their remaining services must be disclosed beginning January 1, 2024. This information must be made available on an Internet website without a subscription or other fee, or, if requested, in paper form. Disclosures must be written in “plain language,” so that it can be understood by the average consumer.

The final rules also require health insurers to make their negotiated rates with in-network providers and their historical payments to out-of-network providers publicly available in machine-readable files beginning January 1, 2023. If an insurer does not use negotiated rates to pay providers, but rather pays them using capitated or other derived amounts, it must disclose the derived amounts, and, to the extent rates are calculated from these derived amounts in the regular course of business, it must calculate and disclose the rates.

Several health insurers and industry trade groups opposed the requirement to disclose their negotiated rates with providers, arguing, inter alia, that it would compel insurers to disclose trade secret information. The comments to the final rules dismissed this argument, stating that these amounts are regularly disclosed to patients through Explanation of Benefits (EOBs) forms.

Whether these rules are actually implemented remains uncertain. The Administration based its authority for promulgating the rules on the Affordable Care Act, even though the Administration has urged the Supreme Court to overturn the ACA in its entirety. In addition, health insurers are expected to challenge the final rules in court.

The final rules are linked here.