Implications of the 2019 Executive Order

The Challenges of Price Transparency

A previous TripleTree blog summarized the price transparency problem in healthcare:

"I Have to Pay What?
The Patient Payment Transparency Challenge"

How Does the 2019 Executive Order on
Price Transparency Work?

Healthcare prices vary significantly by region, or even by doctor. The price transparency problem was first addressed through the Patient Protection and Affordable Care Act (ACA), a part of which required hospitals to publish lists of standard charges for all given services. However, these requirements only applied to the unnegotiated rates for services – which meant for the average consumer, the figures were meaningless.

The 2019 executive order, “Improving Price and Quality Transparency in American Healthcare,” allowed the Centers for Medicare & Medicaid Services (CMS) to expand its interpretation of the ACA to include payer-negotiated rates. This price point is more significant to consumers, as they can more accurately predict their co-pay for certain services.

The ruling is expected to be implemented in two phases…

Price Transparency Requirements are Expected to be Implemented in Two Phases

HOSPITALS

As of January 1, 2021, hospitals are required to make rates for services available in two ways: i) shoppable services must be provided to consumers via an online tool, and ii) all services must be available in a machine-readable file

HEALTH PLANS

Starting January 1, 2023, health plans will be required to offer an online shopping tool that will allow customers to see the negotiated rate between their provider and their plan, as well as a personalized estimate of their out-of-pocket cost for the most shoppable items and services

Objectives of CMS’s
Price Transparency Rules

HOSPITALS

The rule pertaining to hospitals requires a public display of shoppable services (services that can be scheduled in advance such as x-rays, outpatient visits, imaging and laboratory tests, etc.) in which consumers can view up to 300 services, and in which the information needs to be updated at least annually
Additionally, hospitals will be required to provide machine-readable files that provide all hospital standard charges in a single data file that can be read by other computer systems

HEALTH PLANS

The rule pertaining to health plans will come about in a few separate phases

First, the rule will require health plans to provide publicly available and standardized data files, similar to those hospitals are required to provide as of 1/2021
Second, health plans will be required to offer an online shopping tool that will allow consumers to see the negotiated rate between in-network providers and their plan, as well as a personalized estimate of out-of-pocket costs for 500 of the most shoppable items and services
It would also require health plans to disclose allowed amounts paid for out-of-network providers

Which Healthcare Constituents are
Impacted Most by the Rule?

Anticipated Areas of Investment

Payers and providers will be looking to invest across a number of areas, either seeking vendor partners with the expertise to deliver on these areas or budgeting meaningful dollars and internal resources for development.

COMPLIANCE

Investing in processes that allow for the creation of machine-readable files that require sophistication around data identification, aggregation, and normalization to be able to present to consumers in a compliant manner.

REAL TIME COST ESTIMATES

Dealing with the complexities of eligibility and various plan designs requiring the development of advanced business rules to ensure accurate cost information.

USER EXPERIENCE AND CONTEXTUALIZATION

Making data configurable and searchable with an individualized experience for consumers to feel they can take the right action.

INTEGRATION

Integrating the solution with ancillary partners to help the consumer navigate through the system (e.g., patient access and scheduling solutions).