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CMS issues final rule requiring payers to disclose negotiated rates with providers

Starting in 2023, the rule will require health plans to offer an online shopping tool to give out-of-pocket estimates for 500 shoppable services.

Susan Morse, Managing Editor

The Centers for Medicare and Medicaid Services has issued a final rule on price transparency requiring most private health plans, including group health plans and individual health insurance market plans, to disclose pricing and cost-sharing information. 

The rule requires group health plans and health insurance issuers in the individual and group markets not only to provide easy-to-understand personalized information on enrollee cost-sharing for healthcare services, but also to publicly disclose the rates they pay providers for specific services. 


Both providers and payers have voiced objections to releasing pricing agreements in their privately-negotiated contracts.

CMS said the price transparency will benefit employers, providers and patients to help drive down healthcare costs.  

Starting on January 1, 2023, the rule will require health plans to offer an online shopping tool that will allow consumers to see the negotiated rate between their provider and their plan, as well as a personalized estimate of their out-of-pocket cost for 500 of the most shoppable items and services.

Starting on January 1, 2024, these shopping tools will be required to show the costs for the remaining procedures, drugs, durable medical equipment and any other item or service they may need.

In addition, by January 1, 2022 this rule will require plans to make publicly available standardized and regularly updated data files. This would open opportunities for innovation, because, with this data, entrepreneurs, researchers and developers will be able to create private sector solutions for patients to help them make decisions about their care, CMS said. 

Further, people who are uninsured or shopping for health insurance will be able to understand how healthcare items and services are priced under health insurance coverage.  

Technology companies can create additional price comparison tools and portals that will further incentivize competition, as well as allow for unprecedented research studies and data analysis into how healthcare prices are set. 


The final rule was created by CMS, along with the Department of Labor and Department of the Treasury, in direct response to President Trump's June 2019 executive order that sought to improve price transparency for patients. 

In September, a federal judge upheld CMS's final rule pertaining to hospital price transparency. That implementation date is January 1, 2021.


"President Trump is solving longstanding problems in our healthcare system; hidden healthcare prices have produced a dysfunctional system that serves special interests, but leaves patients out in the cold," said CMS Administrator Seema Verma. "Price transparency puts patients in control and supports competition on the basis of cost and quality, which can rein in the high cost of care. CMS' action represents perhaps the most consequential healthcare reform in the last several decades."
Twitter: @SusanJMorse
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