HHS Releases Rules to Promote Price Transparency and Empower Patient Decision Making

November 16, 2019

Two new rules from CMS will take steps to increase price transparency for the purpose of empowering patients and increasing competition in the market.

Two new rules from CMS will take steps to increase price transparency for the purpose of empowering patients and increasing competition in the market.

The rules have been issued following a June 24 executive order, in which President Donald Trump directed HHS to work toward increasing access to data with the purpose of making healthcare information more transparent and useful to patients.

“President Trump has promised American patients ‘A+’ healthcare transparency, but right now our system probably deserves an F on transparency,” HHS Secretary Alex Azar said in a statement. “President Trump is going to change that, with what will be revolutionary changes for our healthcare system. Today’s transparency announcement may be a more significant change to American healthcare markets than any other single thing we’ve done, by shining light on the costs of our shadowy system and finally putting the American patient in control.”

In one rule, Calendar Year 2020 Outpatient Prospective Payment System & Ambulatory Surgical Center Price Transparency Requirements for Hospitals to Make Standard Charges Public Final Rule would make prices for items and services provided by all hospitals in the United States more transparent for patients.

The Transparency in Coverage Proposed Rule would require most employer-based group health plans and health insurers to disclose price and cost-sharing information up front to beneficiaries and enrollees.

“Kept secret, these prices are simply dollar amounts on a ledger; disclosed, they deliver fuel to the engines of competition among hospitals and insurers,” said CMS Administrator Seema Verma. “This final rule and the proposed rule will bring forward the transparency we need to finally begin reducing the overall healthcare costs. Today’s rules usher in a new era that upends the status quo to empower patients and put them first.”

Transparency in Coverage would require health plans to:

  • Give consumers real-time, personalized access to cost-sharing information through an online tool and in paper form, by request.
  • Disclose on a public website negotiated rates for in-network providers and allowed amounts paid for out-of-network providers.

Insurers expressed hesistation with the rules. Matt Eyles, president and chief executive of America’s Health Insurance Plans (AHIP), expressed his and AHIP’s support of more transparency and clear information that supports patient decision making, but he said that the rules do not necessarily satisfy the need to help consumers make informed decisions, encourage competitive negotiations, or drive collaboration between public programs and the free market.

“Health insurance providers unequivocally want to empower patients and consumers with health care cost and quality information that is simple, clear, and personally relevant,” Eyles said in a statement. “That is why health insurance providers encourage all of their consumers to use the secure, personalized cost estimator tools they provide today. We will continue to engage collaboratively with the Administration and other health care stakeholders on how we can best work together to achieve lower prices and costs while protecting health care quality, choice, value, and privacy for the hardworking Americans we serve.”