The Centers for Medicare & Medicaid Services recently proposed a rule that would require health insurers to disclose expected out-of-pocket costs for health care services and to share publicly their negotiated rates and allowed charges. Based on our experience supporting price transparency efforts in New York State, NYHealth provided the following public comments outlining ways to make the rule work more effectively:
January 14, 2020
Centers for Medicare & Medicaid Services
U.S. Department of Health and Human Services
Attention: CMS-9915-P
P.O. Box 8010
Baltimore, MD 21244-8010
RE: CMS 9915-P
Dear Administrator Verma:
On behalf of the New York Health Foundation (NYHealth), a private, independent philanthropy, I am writing to provide comments on the proposed rule CMS 9915-P. This proposal would require group health plans and health insurers in the individual and group markets to inform patients upon request of their expected out-of-pocket costs for health care services, in advance of receiving care. Additionally, the regulation would direct plans and insurers to publicly disclose online their negotiated rates with in-network providers and allowed charges for out-of-network care.
We applaud the Department of the Treasury, the Department of Labor, and the Department of Health and Human Services (“the Departments”) for taking this important step to promote price transparency in the health insurance market. This effort complements and builds upon CMS’s recent regulation to increase hospital price transparency and sets the health care system on a path toward full, system-wide price transparency.
NYHealth believes that information transparency is a means to improve affordability, quality, and competition in the health care market and a gateway to a better health care system for all patients. We offer comments based on our program on Empowering Health Care Consumers, which promotes transparency of health care price, quality, and patient experience information. Our organization supports projects to develop information resources for patients, expand access to and uptake of those resources, and encourage diverse stakeholders such as plans, providers, and policymakers to advance transparency in health care.[1]
Requiring insurers to report meaningful price information has the potential to:
- Improve the patient experience. The greatest pain points for patients seeking health care involve their financial experiences.[2] Patients are better protected from unexpected medical bills and financial hardship if they are informed of their expected medical costs and can plan for those expenses.
- Facilitate innovations in the way patients and health care purchasers can shop for health care. Price transparency is necessary to spur innovation by third-party vendors to facilitate more informed decision-making and shopping of health care services.
- Reduce wasteful spending and create a more efficient and value-driven health care system. Disclosing information on actual prices paid across insurers and providers for a wide array of services is a necessary step to support efforts by employers, state regulators, and other purchasers of health care to assess price variation in order to identify unwarranted spending variation that has little to do with differences in quality of care.
Below, we provide more comments on specific components of the proposed rule.
A. All patients should have access to price information, regardless of plan, place, or point of service.
Patients want information to prepare for their health care costs. A nationally representative survey conducted by Public Agenda, an NYHealth grantee, revealed that 85% of Americans say it is very or somewhat important for patients to be able to compare prices across different doctors. But the same study indicates that the vast majority of Americans believe that there is not enough information available to them about health care prices.[3]
Patients struggle to find price information about their health care services because, in many cases, the information is simply not there. Currently, there is substantial variation across insurers in how easily patients can access price information prior to receiving care. An NYHealth grantee, Consumer Reports, assessed health care cost tools available to patients through their insurers. While many large insurers do already have cost estimator tools on their websites, these tools vary in their level of sophistication, and many do not allow for comparison shopping.[4] Furthermore, the price estimates provided through these tools are often based on historical claims data, not individualized prices, meaning patients might not receive accurate estimates.[5] These tools are frequently limited by gag clauses in contracts between insurers and providers, which preclude the disclosure of negotiated prices. This results in patients receiving cost estimates based on averages and other benchmarks that may not be an accurate assessment of what patients will have to pay.
States have attempted to fill in these gaps by creating All-Payer Claims Databases (APCDs), which patients can use to look up health care prices in their area. However, only 16 states have established APCDs, leaving a fractured landscape of price information nationwide.[6] Additionally, self-insured plans, which are regulated on the federal level, are not required to disclose their prices to APCDs. In 2019, more than 60% of workers with employer-sponsored health insurance were enrolled in self-insured plans and therefore beyond the reach of state price transparency efforts.[7]
There is also variation in price information across points of service. CMS’s recently finalized regulation on price transparency (CMS-1717-F2, OPPS Price Transparency final rule) improves patient access to price information for hospital services.[8] Patients, however, continue to lack comprehensive information about prices in outpatient settings.
The proposed rule would fill in these gaps in the price information environment. It would make price information available across insurers, shed light on self-insured plans’ prices, and provide price information about outpatient services. A patient’s ability to access price information about their health care should not be dependent upon their insurance plan, their state of residence, or the type of health care they are seeking.
In this spirit, NYHealth is concerned that the proposed rule exempts short-term, limited-duration insurance plans from complying with price transparency requirements. Short-term health insurance plans, which are prohibited in New York but sold in most other states, often have dollar limits on covered benefits, limits on prescription drug coverage and covered doctor visits, and excluded benefits.[9],[10] This means that patients on short-term insurance plans can face higher cost-sharing liability when seeking medical care than patients on regular insurance plans. It would be especially important for these patients to have access to their cost-sharing liability under this rule before receiving care or even signing up for a short-term health insurance plan, so they are aware of their coverage limits and are prepared to receive bills from the hospital and other health care providers for amounts that exceed their coverage. If the proposed regulation is to fully fill in the gaps in the price information landscape, it must extend to short-term insurance plans.
B. Patients should be able to find comprehensive price information on health care services easily.
The proposed rule would enable patients to receive information about their cost-sharing liability on their insurer’s website through a self-service tool or via mail on request. Currently, if a patient’s insurer does not have an individually-tailored cost-estimator tool on their website, a patient must call their insurer. Considering the public increasingly searches for information about general consumer products and services online, it is time for patients to be able to find price information about their health care services online, too. To further increase price information accessibility—and to enable patients to make cost-effective decisions in the doctor’s office—NYHealth also supports the proposal for self-service tools to be made available on mobile applications.
NYHealth supports the requirement that patients be able to request cost-sharing information using both procedure codes and natural language searches. This protects patients from needing to know esoteric billing codes in order to find information about their expected health care services. It is also promising that the rule would require insurers to use plain language when disclosing price information. This further ensures that patients can understand their expected costs without expert knowledge of insurance language and practices.
In § IV(1), the Departments solicit comments on whether the proposed regulation should include quality disclosure requirements in addition to price disclosure requirements. An NYHealth-funded study reveals that New York residents worry about health care quality nearly as much as they worry about health care affordability and insurance coverage. Yet only about one-third of New Yorkers think there is enough information available to them about the quality of doctors or hospitals.[11] NYHealth believes that patients need access to both price and quality information to choose high-value health care. However, NYHealth also recognizes that immediately requiring quality disclosures could slow down insurers’ ability to comply with this rule. The Departments should therefore address quality transparency requirements through future rulemaking.
In § IV(3), the Departments invite comments on what kinds of quality information should be included in quality disclosures. Research conducted by United Hospital Fund, an NYHealth grantee, identified that patients want access to condition-specific quality information (e.g., survival rates for a particular disease) and clinician-level quality information (e.g., providers’ credentials, expertise, and history of legal actions). Patients value the experiences of other patients when judging quality, and therefore want access to patient experience information, patient narratives, and patient-reported outcomes. Information about the site of service is also important to patients, including the cleanliness of a practice and the helpfulness of its staff. Finally, patients value how the quality information itself is presented (e.g., whether it is written in plain language, whether the information is up-to-date, and whether patients can easily customize and compare the information according to their needs).[12] NYHealth recommends that future quality measures capture these indicators and preferences.
C. Price information opens opportunities for disruptive innovation.
Third-party price transparency tools
The proposed rule requires insurers to disclose on their websites their negotiated rates for in-network providers and allowed amounts paid for out-of-network providers. The Departments acknowledge that “such data is unlikely to be useable by the average consumer.”[13] Patients can face information overload and decision fatigue when researching health care prices.
It is more likely that patients use price transparency tools if the information is presented in an intuitive, accessible, and appealing fashion. Insurers should strive to make their data as user-friendly as possible, but there are limits to what individual insurers can do. For example, price transparency tools are most useful when information can be compared easily in a standard format across insurers. There is a role for third-party application developers to translate the data on negotiated rates and allowed amounts into easy-to-navigate, easy-to compare information that consumers can use to make more informed decisions. With such tools, patients could look up prices for anticipated health services. Uninsured patients could also use this information to help negotiate prices with providers.
Third-party developers may also be motivated to create tools specifically for employers and other purchasers of health care to make more cost-effective decisions. These purchasers could use the data to better shop among health plans. This data would be particularly of use to self-insured employers; a study of self-insured employers in Indiana revealed that access to useful price information enabled employers to more effectively negotiate with insurers and providers.[14] Employers and other purchasers of health care could also use this information to select lower-cost, higher-value providers in their network design.
Innovative insurance benefit designs
The Departments state that a goal of the proposed regulation is to encourage consumers to shop for lower-cost providers. Evidence shows that a minority of patients currently shop around for health care.[15] An NYHealth-funded report by Public Agenda revealed that only one in five Americans have tried to compare prices between providers before receiving care.[16] Even when presented with price information tools, patients still struggle to compare prices. A nationwide study of employees offered a price transparency tool through their employer revealed that only 10% of employees used the tool within the first year.[17]
There is evidence that patients are more likely to shop for care when information on prices is coupled with incentives. For example, to address extensive price variation for identical services across the state, the California Public Employees Retirement System (CalPERS) implemented a system of reference pricing in 2011. To avoid paying costs above the covered benchmark rate, most patients redirected their care to lower-cost and higher-value providers.[18] The proposed rule has the potential to promote incentives that motivate patients to use available price information to select cost-effective care. The regulation provides additional financial flexibility for insurers to create innovative benefit designs that encourage patients to seek lower-cost care.
D. The Administration’s unwillingness to defend the ACA in federal court jeopardizes the future of the proposed regulation.
The Departments cite the Affordable Care Act (ACA) as the legal authority for these proposed regulation. Specifically, the Departments point to § 1311(e)(3) of the ACA and §§ 2715A and 2718 of the Public Health Service Act (enacted by the ACA). NYHealth is concerned that the future of the proposed regulation is jeopardized by the federal government’s stance in Texas v. U.S., ongoing federal litigation challenging the constitutionality of the ACA. The federal government has chosen not to defend the ACA in court and has expressed its support for the ACA to be ruled unconstitutional. If the lawsuit is successful in striking down the ACA, the proposed regulation would have no statutory authority and could not be promulgated as written. The federal government should reconsider its position not to defend the ACA, as a judgment against the constitutionality of the ACA would also invalidate this rule as written.
E. Conclusion
As health care costs rise, it is more important than ever for patients to have comprehensive information about the costs they can expect when they seek medical care. There is also an increasing use of consumer-directed health plans, including high-deductible plans, that further shift the burden of managing health care costs to patients. As they are responsible for a growing share of health care costs, patients have made it clear that they want price information about their expected medical costs, but do not know where to look for it. The proposed rule would empower health care consumers and move the nation closer to system-wide price transparency.
Thank you for the opportunity to provide input on this important matter.
Respectfully submitted,
David Sandman, Ph.D.
President and CEO
New York Health Foundation
[1] “Empowering Health Care Consumers.” New York Health Foundation. https://nyhealthfoundation.org/what-we-fund/empowering-health-care-consumers.
[2] “Improve the Healthcare Financial Journey.” Experian Health. June 21, 2018.
http://www.experian.com/blogs/healthcare/2018/06/healthcare-financial-journey/
[3] Schleifer, David, Rebecca Silliman, and Chloe Rinehart. “Still Searching: How People Use Health Care Price Information in the United States, New York State, Florida, Texas and New Hampshire.” Public Agenda. April 2017. https://nyhealthfoundation.org/wp-content/uploads/2017/11/how-people-use-health-care-price-information-full-report.pdf
[4] “Consumer-Facing Healthcare Cost and Quality Tools.” Consumer Reports. November 2016. https://nyhealthfoundation.org/wp-content/uploads/2017/11/consumer-facing-health-care-cost-quality-tools-consumer-reports-brief.pdf
[5] Transparency in Coverage, 84 Fed. Reg. 229 (November 27, 2019). p. 65467. Federal Register: The Daily Journal of the United States.
[6] “The State of State Legislation Addressing Health Care Costs and Quality.” Health Affairs Blog. August 22, 2019. https://www.healthaffairs.org/do/10.1377/hblog20190820.483741/full/.
[7] “2019 Employer Health Benefits Survey.” Kaiser Family Foundation. September 25, 2019. https://www.kff.org/health-costs/report/2019-employer-health-benefits-survey/
[8] OPPS Price Transparency Final Rule, 84 Fed. Reg. 229 (November 27, 2019). p. 65524. Federal Register: The Daily Journal of the United States.
[9] Palanker, Dania, Maanasa Kona, and Emily Curran. “States Step Up to Protect Insurance Markets and Consumers from Short-Term Health Plans.” The Commonwealth Fund. May 2, 2019. https://www.commonwealthfund.org/publications/issue-briefs/2019/may/states-step-up-protect-markets-consumers-short-term-plans
[10] “ACA Open Enrollment: For Consumers Considering Short-Term Policies.” Kaiser Family Foundation. https://www.kff.org/health-reform/fact-sheet/aca-open-enrollment-for-consumers-considering-short-term-policies/
[11] Schleifer, David and Kirk Grisham. “We Can Do Better: New York State Residents Weigh In on Health Care Quality.” Public Agenda. November 2019. https://nyhealthfoundation.org/wp-content/uploads/2019/11/We-Can-Do-Better_New-York-State-Residents-Weigh-In-on-Health-Care-Quality.pdf
[12] Rogut, Lynn, Pooja Kothari, and Anne-Marie Audet. “Empowering New Yorkers with Quality Measures that Matter to Them.” United Hospital Fund. December 2017. https://nyhealthfoundation.org/wp-content/uploads/2017/12/empowering-new-yorkers-with-quality-measures-dec-2017.pdf.
[13] Transparency in Coverage, 84 Fed. Reg. 229 (November 27, 2019). p. 65478. Federal Register: The Daily Journal of the United States.
[14] Sachdev, Gloria, Chapin White, and Ge Bai. “Self-Insured Employers Are Using Price Transparency to Improve Contracting With Health Care Providers: The Indiana Experience.” Health Affairs Blog. October 7, 2019. https://www.healthaffairs.org/do/10.1377/hblog20191003.778513/full/
[15] Mehrotra, Ateev, Michael Chernew, and Anna Sinaiko. “Promise and Reality of Price Transparency.” New England Journal of Medicine 378, no. 14 (April 5, 2018): 1348–54. https://doi.org/10.1056/nejmhpr1715229
[16] Schleifer, Silliman, and Rinehart. “Still Searching: How People Use Health Care Price Information in the United States, New York State, Florida, Texas and New Hampshire.”
[17] Desai, Sunita, Laura Hatfield, Andrew Hicks, Michael Chernew, and Ateev Mehrotra. “Association Between Availability of a Price Transparency Tool and Outpatient Spending.” JAMA. 2016;315(17):1874-1881. doi:10.1001/jama.2016.4288.
[18] Boynton, Ann and James Robinson. “Appropriate Use of Reference Pricing Can Increase Value.” Health Affairs Blog. July 7, 2015. https://www.healthaffairs.org/do/10.1377/hblog20150707.049155/full/
