- CMS on Nov. 15 also released a proposed rule that would require plans to make out-of-pocket spending estimates available to their members and also post the rates they have negotiated with providers in a machine- readable format.
- The estimates must be made available in both an online tool and upon request in a paper format.
- The proposed out-of-pocket estimate requirements for plan members is like the HFMA Price Transparency Taskforce’s recommendations.
In addition to the provider-focused final rule that requires hospitals to post their payer-specific negotiated charges, CMS on Nov. 15 also released a proposed rule that would require plans to make out-of-pocket spending estimates available to their members, and also post the rates they have negotiated with providers in a machine-readable format.
The estimates must be made available in both an online tool and upon request in a paper format. If finalized, the plan would be required to provide the out-of-pocket cost sharing, accumulated amounts (e.g. spending to date as it relates to the deductible or out-of-pocket limit), the out-of-network allowable, the services included in the estimate and a broad range of disclosures/caveats. Like the rate-posting file, the estimate requirement applies to all covered items and services (not just hospital services).
The proposed out-of-pocket estimate requirements for plan members is similar to the HFMA Price Transparency Taskforce’s recommendations. However, where it falls short is that it does not pair the out-of-pocket estimate with quality data so that the plan member can make a value-based decision about where to receive care. The proposed rule also adjusts the medical loss ratio (MLR) calculation to encourage plans to create benefit designs that reward members who choose lower-cost providers by sharing the savings with them.
Yes, if this is finalized, it’s likely the rule will be challenged in court (like the final rule requiring the posting of negotiated charges). However, if the health plan rule is finalized in a form that resembles what was proposed, and survives anticipated legal challenges, it will be far more impactful on health spending than the negotiated charge-posting requirement.
Online transparency tools, coupled with shared savings, for those that use them have had mixed results in terms of their impact on spending based on the limited studies reviewing their effectiveness. Despite that, I’m still a big supporter of educating people about the cost and quality of their treatment options and share savings when individuals make smart choices to date (informed choice is a good thing). However, we’ve largely left the key decision influencer out of the equation — the physician — which has limited the efficacy of these efforts.
Given the information asymmetry involved in healthcare decisions (there’s a reasonable chance a sub-specialist has more years of medical education and training than the average patient has formal education), few people are going to override their referral to Dr. Jones at ABC Medical Center because their health plan’s transparency tool suggests Dr. Smith at Main Street Clinic is cheaper. However, if an app is developed that allows the physician to identify, based on the patient’s health plan, what the lowest-cost site of service is, he or she can take that into account when they make referrals. And given the emerging concerns about "financial toxicity" on the efficacy of treatment plans, it’s not hard to imagine physicians taking this information into account as they make referrals. Because the world’s best care plan is useless unless the patient can afford it and is able to access the recommended care.