+ What does this new rule mean for patients?

Patients will be able to find out the price that their insurance plan will pay for their healthcare services before they receive care. They now have access to the previously secret negotiated prices their plan has agreed to pay for in-network care, as well as the allowed amounts for certain out-of-network services which will help them choose more affordable care and avoid unnecessarily high bills.

+ What difference will that make?

The ability to see these prices upfront will help patients better manage their healthcare costs, and collectively will drive healthcare costs down overall. Once online tools emerge, those shopping for healthcare will not only be able to compare the prices that their insurance plans negotiated with doctors, hospitals, and facilities within their plan’s network, but also will be able to see what it would cost if they went to certain out-of-network providers or facilities based on their insurer’s payment history. This will provide a level of price certainty that patients have never had before, and give them more control of their healthcare decisions.

When it’s time to enroll in a new health plan, price shopping tools will help consumers get a much better idea of just what their premiums will buy them.

+ Why should patients care about total prices when all they have to pay is out-of-pocket costs?

The total cost of care matters because we all pay for it. We all pay for healthcare through higher premiums, higher copays, higher deductibles, higher costs of goods and services, and higher taxes. Once prices are out in the open and consumers can see and compare them, they can choose the lower-cost care. As more consumers choose more affordable care, competition will kick in and drive down premiums along with the total cost of care.

+ How can I find my price?

It may not be easy at first. At the beginning, only large, complex files will be available. Eventually, technology companies will provide online tools that will make accessing and navigating prices much easier, similar to how Zillow or Expedia aggregate and organize price data for easy searching.

Starting January 1, 2023, all insurance companies will be required to provide online tools to help their members locate prices.

+ What can I do if I can’t find the price?

Ask for it. One of the rule’s requirements is that by January 1, 2023, plan members must have access to cost-sharing information (what they will be obligated to pay) online on demand, or in print or over the phone upon request. Some insurers might start offering this beforehand.

+ What if my bill doesn’t match the price listed?

First verify that the price listed on your bill matches the services you received. To do that, ask your provider for an itemized copy of your bill, including billing codes for the services provided. Review it to be sure all services listed were in fact provided. Compare the amounts charged with the online price data listed by your plan. (Again, once high-tech companies provide new tools, this will be easier.)

If that doesn’t clarify the discrepancy, ask your insurance company to explain how they arrived at the amount on your bill, and the amount that is your responsibility. Continue to press the insurer and provider for reconciliation.

+ What if I don’t have insurance?

The new price information only relates to those who have insurance. However, a hospital price transparency rule that went into effect January 1, 2021 will help if you are planning care at a hospital. The hospital rule requires all hospitals to post their prices, including their discounted cash prices, which is the self-pay price for those without insurance. Check the hospital’s website or call in advance and request the discounted cash price.

+ Why can I only get estimates?

Providers and insurers are often reluctant to guarantee a price for treatment because treatment can vary unexpectedly with each individual patient. However, the new price data will contain the actual prices each insurer has negotiated with each provider. If you use that data and compare services by billing codes for the services you received, you have a strong basis to argue what your actual price should be – a marked improvement over the hidden prices that previously left patients entirely in the dark.

+ What does this new law mean for me?

For the first time, employers will have access to data that shows what their healthcare plan actually pays for care. They will be able to see all the previously hidden secret negotiated prices between insurers and hospitals, doctors, and clinics. This ability to “look under the hood” will let employers see what they are paying compared to negotiated rates of other plans, and will also help employers know whether the charges they are incurring for their employees’ care are fair.

+ What should I do with this information?

Employers can use this information to verify that their employee health plan is being charged fairly for the healthcare services and treatments their employees receive. But more important, this information will allow employers to compare payer networks and plans and make better business decisions that could dramatically lower their health care costs, while providing better options for employees. In short, it will allow employers to choose healthcare plans based on real value, the same way they make other purchasing decisions.

Because the data won’t be easy to navigate at first (better tools are coming), employers should consider working with a medical pricing expert who can help them analyze and decipher the pricing and claims data.

+ What can I do now that I couldn’t do before?

Starting July 1, 2022, the new federal Transparency in Coverage rule requires healthcare payers (insurers and self-insured group health plans) to make publicly available the individual amounts their health plans pay every provider, across all types of services and locations. This newly disclosed data will go beyond showing hospital prices, and will include negotiated prices for other care locations, including doctors’ offices, imaging centers, labs, outpatient surgery centers, and urgent care clinics. Now, employers will have the data to choose health plans that provide the greatest value, while helping to guide their employees to lower cost care.

+ How will this save me money?

Using the new data, employers may find that a different network has negotiated lower rates for the types of healthcare services their employees use most, and that switching to that plan or network could save their company and their employees a substantial amount of money. Companies that have direct contracts with hospitals or other providers will be able to compare their rates and possibly negotiate further savings. They can also identify the price-gouging providers, steer employees away from them, and incentivize employees to seek lower-priced care.

+ How do I find prices?

Each insurer and self-insured group health plan must publish two publicly available data files. One must show their negotiated rates for in-network services. The other must show what they paid for out-of-network services. Those who are technically inclined and have access to some hefty computing power can download these files from the plans’ websites.

Because this information will be unwieldy for most to navigate, at least at first, employers may want to seek an independent expert to help them decipher the data.

+Will this information help me determine quality?

No. The new data only reveals prices. Notably, repeated studies have shown that in healthcare little correlation exists between price and quality. In fact, the price for the exact same procedure performed by the same team in the same hospital can vary by as much as ten times. For instance, a C-section could cost $6,241 or $60,584 at the same hospital depending on the plan, yet the quality is exactly the same. The new data will expose those price variations and help employers choose the plans with the best negotiated rates. That said, increased competition due to price transparency will likely lead to improved overall quality over time.

+ What difference could this make to my company?

The story of the last decade is one of fast rising healthcare costs and stagnating wages. These pricing data are part of a larger movement working to reverse that trend. The money companies can save ─ and that amount could be as much a 40 percent of their healthcare spending ─ can go toward more jobs or higher wages, resulting in a boom to businesses and the American economy.