The announcement comes about two months before a similar requirement for hospitals to post negotiated rates goes into effect. Providers have vigorously fought the requirements in court, but judges did not appear to be swayed in the most recent hearing on the case.
In a call with reporters Thursday, CMS Administrator Seema Verma tried to get ahead of balking from the sector by dismissing the idea that negotiated rates are proprietary information and that disclosing them will hamper negotiating power and competition.
"Don't be fooled. This rule merely requires that health insurance companies share the same information as companies in virtually every other industry," Verma said. "And such complaints are all about protecting a considerable profit special interest reaped from business as usual."
Verma compared the requirement to one from the 1950s requiring car dealerships to post stickers with recommended retail prices and to airline industry deregulation in the 1980s that required transparency and brought down prices.
Officials on the call noted that many plans already offer out-of-pocket cost estimation tools and suggested developing more consumer- and employer-friendly approaches could offer a competitive advantage. They also said they hope researchers and third-party innovaters can make use of the three data files being available.
The health insurance lobby pushed back against the proposed rule issued in November 2019, saying it was overbroad and questioned the government's authority to implement it. HHS Secretary Alex Azar, however, has said the department is "on very sound legal footing" with the requirement.
The final rule also encourages insurers to develop new "shared savings" plans that incentivize consumers to shop for services for low-cost, high-value providers. Payers could then take credit for the shared savings when calculating their medical loss ratios.
Little is spelled out in the rule, however, about enforcement. CMS admits that most action will be left up to states but offers no further details. The rule includes a good faith safe harbor for plans making inadvertent errors or omissions, provided they are fixed.
The same unclear enforcement surrounds the hospital transparency requirement. CMS has only said that it "may" audit a hospital website to ensure compliance. That regulation includes a penalty of up to $300 a day for noncompliance.
The rule released Thursday applies to individual and group health plans, including self-insured plans but not short-term limited-duration insurance or health reimbursement arrangements.
