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It’s called the Transparency in Coverage Rule, and its design provides patients with accurate costs of healthcare prior to treatment. The Trump administration’s Centers for Medicare and Medicaid Services (CMS) issued this final rule a few months ago. But there are implications that reach insurers, payers, and those businesses supporting the industry infrastructure. We’ll take a deeper dive into the Transparency in Coverage Rule and explore what it may mean for your company. Staying ahead of the latest requirements curve and anticipating changes will help you determine your strategic positioning. 

The Intended Benefits of Transparency 

In addition to the Transparency in Coverage Rule’s benefits for patients, the details point to other key advantages, as well. The rule sheds a public light on other private information, including out-of-network allowed amounts, prescription drug pricing, and even negotiated provider rates. Other compliance-demanding requirements include cost-sharing information regarding specific provider estimates, both upon request, in writing, via the web, or document. These two pivotal requirements will allow individuals to review potential healthcare costs and shop around for better pricing. Insurers may also be eligible for medical loss ratio (MLR) credits, based on the insured receiving care from lower-priced and higher valued healthcare providers. 

What You Can Expect Right Now 

The previous administration issued the Transparency in Coverage Rule, so there is the possibility that the current administration will make changes. There is no immediate indication that President Biden has plans to rescind the rule right now. And some industry experts suggest he may be more likely to enforce the transparency mandates, albeit with modifications. 

As insurers, payers, and supporting companies try to navigate the guidelines documented by the rule, it’s important to know there is a timeline for compliance. Preparing for transparency upgrades now is paramount. CMS did stagger the deadlines, hoping to accommodate the industry with a reasonable amount of time to make necessary internal changes. The online browsing tools, for example, that provide negotiated rates, must be live by January 1, 2023. The remaining mandates, including information about services, procedures, and prescriptions, must be available to individuals online by January 1, 2024. 

Some health insurance providers are already taking steps towards transparency compliance. Cost-sharing information is becoming more available across a variety of websites. Getting ready now means exploring new ways to manage and extract data. Machine-readable files will need to be publicly available no later than January 1, 2022. This is the shortest deadline according to the Transparency in Coverage Rule, making it a priority project for many insurers right now, preparing for the monthly drops of those required files. 

Compliance Plans & Competitive Analysis 

Many of the industry experts are suggesting insurers also prepare with compliance planning and competitive analysis reporting. Having a documented plan might serve as a layer of penalty aversion, should minor oversights occur. Outlining policies and procedures now might seem like a no-brainer, but it’s an administrative priority to move the transparency closer to compliance. Identifying overarching goals about capturing and providing data to consumers can serve as the insurer’s road map to compliance, as well.  

Internal tools for competitive analysis are also helpful. Keeping up with others’ public-facing files can ensure companies can keep pace with industry advancement toward compliance. And many organizations are recognizing that the Transparency in Coverage Rule may be a goldmine for competitive advantage. If all providers are required to share negotiated rates and costs publicly, insurers can leverage the data to improve product platforms, pricing, and services. What used to be tightly guarded data, will soon be publicly available. 

Some compliance plans may also incorporate the process for improving provider negotiations. Health insurance companies may seek to expand plan networks when there are low-cost providers. And alternatively, the higher-cost providers may lead insurers to explore cost-reduction efforts. In either scenario, the insurers can see real ROI all while providing better transparency to enrollees. 

Hospital Pricing Transparency Mandates Are Struggling 

CMS issued a pricing transparency mandate for U.S. hospitals, effective January 1, 2021. Part of this initiative requires all hospitals to make pricing accessible to consumers online regarding equipment and services. And the mandate demands online and machine-readable files, as well. But some of the latest headlines suggest adherence is a problem. Recent reports indicate some members of the U.S. House Energy and Commerce Committee are calling for the Department of Health and Human Services (HHS) to enforce the hospital rule since more than half of the country’s biggest hospitals remain uncompliant with the transparency requirements. 

This federal rule intends to improve competitive pricing among hospitals and provide public-facing pricing information useful to patients. And with so many hospital organizations “unambiguously non-compliant,” says a Health Affairs study, it could be a prediction about how well insurers fall in line with the Transparency in Coverage Rule, too. It can also be a signal to insurers to take necessary steps now in order to meet compliance regulation deadlines to come and avoid serious lags like those within the hospital segment. 

Staying Ahead of the Curve & Preparing for New Standards 

Transparency within the Marketplace will improve, and participants are already preparing. As a company that supports the industry, you, too, can take steps now that allow your product or service to thrive in a more transparent environment. Data solutions will be in high demand, especially when it comes to preparing machine-ready files. There will be an increased need for interoperability as insurers look to capture data between healthcare providers and negotiations. 

Powering what comes next in the healthcare ecosystem is what Softheon does best. So, as you reflect on your company strategy, with the pending Transparency in Coverage Rule deadlines on the horizon, you may realize you need a digital solutions partner. Our menu of data tools continues to innovate company objectives through interoperability and beyond.  

When you’re ready to take those first critical steps toward preparing for transparency compliance, don’t go it alone. Contact us today to explore how Softheon can help take the guesswork out of planning for the way forward and keep your company ahead of the curves that lie ahead. 

Meet the Author

Transparency in Coverage

Josh Schultz is a Senior Policy Analyst at Softheon, where he advises the company on health policy issues affecting businesses and government health agencies. Prior to Softheon, Josh worked for a non-profit agency assisting Medicare beneficiaries, a technology company, and consulting firms.