Trump's New Price Transparency in Healthcare Rule Explained
We were at the White House during President Trump's landmark event enacting Price Transparency in Healthcare. Here's what you need to know.
On Friday, November 15th, free market healthcare leaders gathered at the White House for President Trump's announcement for two rules that require insurance companies and hospitals to make public critical pricing information that has long been shielded from consumers. Among them were Texas Medical Management's Sean Kelley, CEO, and Rick Shultz, Chief Medical Officer, whom spoke publicly on behalf of TMM at the behest of the President. (video below)
What Are The New Trump Health Care Rules with Price Transparency?
The rules affect the two of the biggest players in healthcare: Insurance companies and providers (hospitals, surgery centers, etc.) The ultimate goal of these rules is to promote competition by allowing consumers to compare prices for their health care online. Much of this information is kept hidden from the public allowing providers and insurers to abuse the lack of transparency for profit.
New transparency rules for health insurance issuers and employer group plans
- Insurance issuers are now required to provide real-time personalized access to cost-sharing information through an online tool. This includes your liability for all covered procedures, items, and services.
- Also, they must disclose on a public website their negotiated rates for in-network providers and allowed amounts paid for out-of-network providers.
As described by U.S. Department of Health & Human Services:
With this information, patients will have accurate estimates of any out-of-pocket costs they must pay to meet their plan's deductible, co-pay, or co-insurance requirements. This will make previously unavailable price information accessible to patients and other stakeholders in a standardized way, allowing for easy comparisons.
New price transparency rules for hospitals
- Hospitals are now required to make public gross charges, payer-specific negotiated charges, the amount the hospital is willing to accept in cash from a patient, and the minimum and maximum negotiated charges in a machine readable file. This allows developers access to this information to provide tools for consumers to better shop for healthcare.
- More importantly, hospitals must display that same information in a consumer-friendly manner where it's easily accessible, without barriers, and searchable. Something we've been doing for years.
- Allow health care consumers to
These policies are being finalized and would be effective January 1, 2021.
Providers that are affected by the new price transparency rule as described by the CMS fact sheet:
...an institution in any State in which State or applicable local law provides for the licensing of hospitals, that is licensed as a hospital pursuant to such law, or is approved by the agency of such State or locality responsible for licensing hospitals, as meeting the standards established for such licensing.
The definition goes on to include or exclude government institutions based on certain parameters.
Why is price transparency in healthcare important?