The Departments of Health and Human Services, Labor and Treasury released a new “Transparency in Coverage” proposed rule that requires most group health plans and issuers to publicly disclose negotiated rates with in-network providers and historical data showing amounts paid for covered items or services furnished by out-of-network providers. In addition, group health plans and issuers would be required to create a self-service website through which participants could obtain estimates of out-of-pocket costs for covered items or services. The proposed rule implements provisions of the Affordable Care Act and is intended to help consumers shop for medical services from lower-cost, higher-value providers.

Public Disclosure of Negotiated Rates and Historical Out-of-Network Payments

Group health plans and issuers would be required to disclose to the public negotiated rates for in-network providers and historical out-of-network allowed amounts in two machine-readable files. The file for in-network providers would include data for each in-network provider as of the last day of the contract term for the provider and the file for out-of-network providers would include allowed amounts for items or services furnished by out-of-network providers in the first 90 days of the six-month period ending before the file’s publication date. The files would be updated monthly and be accessible for free without restriction. The agencies have posted negotiated rate file data element guidance and out-of-network allowed amount file data element guidance describing proposed data elements for each file.

Estimated Cost Disclosure to Participants

The proposed rule would require plans and issuers to disclose to participants, prior to the receipt of care, price and benefit information for covered medical items and services. The following amounts would be required to be disclosed and to be accurate at the time of the request:

  1. The estimated cost that the participant would pay out-of-pocket for a covered item or service under the plan;
  2. The amounts accumulated towards the participant’s out-of-pocket limit, deductible, and any applicable cumulative treatment limitation (g., a limitation on the number of items, days, units, visits, or hours covered in a defined period);
  3. The dollar amount the plan or issuer has contractually agreed to pay an in-network provider for a covered item or service (e., the negotiated rate);
  4. The maximum amount a plan or issuer would pay for a covered item or service if provided by an out-of-network provider; and
  5. If the request relates to an item or service that is subject to a bundled payment arrangement under which a provider is paid a single payment for providing multiple items or services, a list of the items and services for which the cost-sharing information is being disclosed.

The disclosure would be accompanied by a notice explaining the limitations of the estimate and any applicable prerequisites to receiving the item or service, such as concurrent review or prior authorization. The agencies have posted a proposed model notice.

Plans and issuers would be required to provide this information through a searchable, web-based self-service tool. Upon request, plans and issuers would be required to furnish such information in paper form organized in a manner requested by the participant.

Changes to the Medical Loss Ratio

The Medical Loss Ratio (“MLR”) provisions of the Affordable Care Act require health insurers to spend at least 85% of premiums for large group policies on medical expenses and activities to improve health care quality. Insurers that incentivize consumers to shop for services from lower-cost, higher-value providers by sharing the resulting savings with consumers (for example, through gift cards, cost-sharing reductions, or premium credits) may treat those rewards the same as medical expenditures for purposes of the MLR requirements.

Deadline for Comments and Proposed Effective Date

Comments on the proposed regulations are due January 14, 2020. The rule would be effective for plan years beginning on or after the first anniversary of the effective of the final rule.