Health care and pharmaceutical costs have existed in the shadows for many years causing confusion and creating crippling bills that have pushed many Americans into bankruptcy. 

Thankfully, after decades of remaining buried beneath legalese and red tape, a federal mandate issued in late 2020 seeks to at last bring U.S. health care costs into the light of day.

Published jointly by three federal agencies, the final Transparency in Coverage Rule, aims to allow Americans to more accurately predict their health care costs by helping them find and filter care providers within their medical plan network and location, and even given their current accumulations toward their deductible and out-of-pocket maximum.

It’s personal. And it’s a game changer.

With effective dates staggered across a three-year period, the new regulation methodically peels back the curtain that has obscured the personal and macro-economics of health care for decades. And for benefits professionals, there’s never been a better opportunity to increase employees’ engagement in their health care and pharmacy benefits.

Nearly everyone in the health care ecosystem has felt frustration at the lack of cost transparency. When asked how much something will cost, providers tell patients to check with their plan. We all know urgent care is less expensive than the emergency room, but by how much? Network status is available through benefits platforms and plan websites, but employees will be the first to say it isn’t consistently accurate.

And surprise billing? Let’s not even go there.

As a benefits professional, you’ve been told the answer is “health care consumerism.” By putting the purchasing power in the hands of employees through high-deductible health plans and other cost-shifting arrangements, employees will make more informed—read: more economical—health care and pharmacy decisions.

Or so the theory goes.

There’s just one problem. It’s incredibly difficult—if not impossible—to predict how much anyone will pay for a particular health care service under a specific plan, in a specific ZIP code, with a specific provider and with respect to one’s specific deductible and out-of-pocket max accumulations.

The Rule 

Published jointly by the U.S. Departments of Health and Human Services, Treasury, and Labor, the final Transparency in Coverage Rule requires group health plans and insurance issuers to make two key types of disclosures:

1. Disclosures to the Public: For plans with effective dates beginning on or after Jan. 1, 2022, plans and issuers must publicly disclose health care pricing online and update that information monthly. The pricing information must include:
   • In-network provider negotiated rates for covered items and services
   • Historical data of billed and allowed amounts for covered items or services furnished by out-of-network providers and pharmacies
   • Negotiated rates and historical net prices for in-network prescription drugs
2. Disclosures to Plan Participants: Plans and issuers must provide certain personalized cost-sharing information to participants and beneficiaries in advance and upon request through an online self-service tool related to:
   • 500 of the most “shoppable” health care services and items (effective Jan. 1, 2023)
   • All covered health care services, items and prescription drugs (effective Jan. 1, 2024)

Whether it’s a knee surgery, a tonsillectomy, or the removal of a plantar wart, most people understand the importance of shopping around when time permits. Like any other purchase, we want the right provider to deliver the right service at the right value.

But with health care, this has never been easy.

For even the most empowered health care consumers, calculating their remaining deductible, double checking their out-of-pocket max and calling various providers takes time and energy. Oftentimes, they simply settle for the one with the earliest availability, which does a disservice to both patient and plan.

Given these barriers, regulators compiled a list of 500 “shoppable” health care services and items. In developing the list, researchers considered:

• Non-urgent (i.e., planned) procedures
• The most frequently performed services and items
• Services with the most significant cost variability

Here is a list of some of those services:

• prostate cancer screening
• mammography
• knee replacement
• hysterectomy
• removal of skin tags
• cesarean delivery
• carpal tunnel surgery
• gastric bypass surgery
• repair of nasal septum
• colonoscopy
• obstetrics care
• hernia repair
• postpartum care
• MRIs
• X-rays
• adenoid removal
• biopsies

There is a lot to consider with this new Transparency Rule. We've discussed strategy in-depth in these two blogs: 

• Transparency Rule Aims to Remove Cloak and Dagger Mystery from Health Care Purchasing Process
• Preparing for Transparency Rule Compliance: What HR Teams Need to Know

To learn more about what the Transparency Rule means for benefits personalization, download our e-book.