Recent federal legislation is about to lift the veil on the cost of health care. Hospitals, providers, and health plans are, or will soon be, required to disclose detailed pricing information to the public and cost-sharing estimates to participants in advance of receiving care.
Both the Transparency in Coverage rule (October 2020) and transparency provisions within the Consolidated Appropriations Act (December 2020) have introduced new requirements that will equip consumers with pricing information and online tools to support comparative pricing among providers.
Currently compliance is low among hospitals who were required in January of this year to publish negotiated rates for health care procedures on their website. In response to low-level compliance, the Centers for Medicare and Medicaid Services (CMS) issued a new proposal that increases penalties for noncompliance.
To drive the outliers into compliance, the CMS has proposed the following penalties:
• for hospitals with a bed count of 30 or less, a maximum of $300 per day or $109,500 for a full year of noncompliance, and
• for hospitals with a bed count of 31 and above, a maximum of $5,500 per day or $2,007,500 for a full year of noncompliance.
The tougher penalties are likely to get the attention of hospital administrators and spur greater compliance.
Next year also requires health plans to provide participants with an online price comparison tool for specific services based on geography and participating providers. Given the proposed penalty increase for hospitals, health plans, including sponsors of self-funded plans, should take efforts to understand and meet the new transparency requirements. For more information, contact your Bukaty benefits consultant.
