A lack of transparency results in distrust and a deep sense of insecurity. – the Dalai Lama
Peekaboo! In all the myriad codicils of 2010’s Affordable Care Act, one fact stands out — market competition is the answer, and pricing transparency is a key driver of success.
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That’s why, in October 2020, the U.S. Departments of Health and Human Services, Labor, Treasury, and the Centers for Medicare and Medicare and Medicaid Services (CMS) co-issued the “Transparency in Coverage” final Rule (TiC), which requires most employer-sponsored group health plans and commercial health insurance issuers offering group and individual coverage to disclose price and cost-sharing information to participants, beneficiaries, and enrollees, in advance. Sunshine is the best medicine.
Why? Because patients aren’t passive objects; they want to be informed and active healthcare consumers. That’s why the underlying intent of the TiC is to provide them with accurate estimates of any out-of-pocket costs they must pay to meet their plan’s deductible, co-pay, or co-insurance requirements. TiC allows patients to gain access to essential purchasing information (e. g., price, network guidance, etc.) in a standardized manner, allowing for easy comparisons, and empowering consumers to “shop” and compare costs between specific providers before receiving care.
As of January 1, employer-sponsored Group Health Plans and Health Insurance Issuers must make make the prices of 500 medical services available via an Internet-based tool.
What this means is that 2023 has brought us one important step closer to true healthcare transparency. The original version of the TiC Rule went into effect in 2022, then the Biden Administration announced that after July 1, 2022, it would begin levying fines against employers that have not fully complied with it. Then came the 2023 screw-tightening. And that’s not all. TiC gets even tougher on January 1, 2024 when the prices of all medical services must be made available via an Internet-based tool.
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TiC now has teeth – and talons. And they’re quickly getting sharper.
Mark Galvin (CEO of TALON Health Tech) was involved in the rule’s development and is now a sort of “Evangelist-in Chief” for both the philosophy behind and the compliance tools behind TiC implementation. Galvin points out that to really empower consumers and hold the health insurance industry’s feet to the fire, we need to abolish the so-called 80/20 Rule (mandating health insurers spend 80% of the money they get from consumers in the form of premiums on healthcare costs and quality improvement activities). The rule was designed to limit how much insurance companies could charge for premiums, but ended up removing any incentive for health insurance companies to drive down the total value of medical claims. Unintended consequence? Not if you’re paying attention.
The Obama Administration put the legal architecture in place that allowed the Transparency in Coverage Rule along with the Hospital Transparency Rule update. Remarkably (avoiding the usual change in administration “not invented here” syndrome), the Trump healthcare team supported these initiatives notwithstanding fierce lobbying to the contrary. Now, the Biden Administration can take the next step in healing the healthcare delivery system by surgically removing the 80/20 Rule, releasing the power of transparency in American healthcare ecosystem.
I find that when you open the door toward openness and transparency, a lot of people will follow you through. – Senator Kirsten Gillibrand
Yes. Even if they are dragged through kicking and screaming.
Photo: sinemaslow, Getty Images
