Editor's note: Maeve O'Meara is the CEO of Castlight Health, a healthcare software company.
Despite rapidly approaching deadlines, ample ambiguity remains around the new federal price transparency rules, which implement the No Surprises Act. In a recent poll conducted among attendees of a transparency webinar we sponsored, only 4% of employers felt very prepared for the new rules; 55% felt not at all or not very prepared.
If these rules aren't implemented in a meaningful way for consumers, the efforts will likely fail to inform healthcare decision making and achieve the desired levels of cost savings. Past transparency efforts have been disappointing. They've included providing consumers with a PDF list of providers’ fees for a service — excluding negotiated rates, episode-of-care or bundled payments, or personalization (i.e., the ability for members to view out-of-pocket costs based on their unique plan design and care received to date). Such lists do not constitute meaningful price transparency, nor do they provide adequate information to help consumers choose from their care options.
The new regulations dictate that: by Jan. 1, 2022, employers and health plans must implement machine-readable files disclosing negotiated pricing and other key provisions; by Jan. 1, 2023, they must offer an internet-based self-service tool that provides personalized, out-of-pocket cost estimates for 500 pre-determined common services; and by Jan. 1, 2024, they must expand the tool to include all covered services and prescription drugs.
Though the spirit of the rules is something everyone can agree on, there are some key challenges with the regulations in their current form, including:
- Tight timelines: Implementing these complex requirements on a compressed timeline will be difficult. Moreover, forcing organizations to focus on deadlines rather than the desired outcome may lead some to choose bare-minimum compliance instead of high-quality, meaningful implementations.
- Incomplete guidance for the No Surprises Act: The guidance provided by the Secretary of HHS in early July 2021 only addressed specific provisions of the rule — most transparency-related provisions still have to be defined. The uncertainty of the NSA makes it challenging for employers and plans to understand what's truly required for compliance.
- Unclear enforcement of the hospital price transparency rule: Compliance with the recent hospital price transparency regulations has been inconsistent, and until recently the consequences for poor performance were unknown. In mid-July, CMS proposed stricter penalties for non-compliant hospitals, continued evidence that the focus on transparency made a full transition from the Trump to Biden administrations and that the hospital price transparency rule will be strictly enforced. However, the following question remains: Will the pattern of compliance and enforcement with the new rules be similar?
- Narrow focus on cost: With the rules' primary target being greater cost transparency, the inclination is to develop an experience in which cost is the primary driver. However, in reality, cost is just one of many factors individuals consider when seeking care. Unless consumers are also presented with additional metrics specific to their situation — such as network, quality, convenience, and efficiency — the new rules will fall short in improving health outcomes. Without these crucial data points, consumers tend to use price as a proxy for quality and deduce that higher charges correlate with better care, which isn’t always the case.
- Usability standards and user engagement: While the current regulations have a strong focus on the member's digital transparency experience, they provide limited guidance about developing an engagement strategy and a user-friendly experience. This could lead to underutilization — just because the tools are built doesn't guarantee consumers will use them. Searching for care should be as simple and personalized as possible. To minimize the cognitive burden for consumers, search results should provide a short list of top recommended providers specific to the user’s clinical profile, health needs, and preferences. Since many consumers with commercial insurance are eligible for numerous no- or low-cost healthcare programs, recommendations for these programs should complement relevant searches. Member outreach and messaging should also be tailored, as this can lead to more consumers engaging with the care they need. The new rules are best suited for individuals who have the ability and desire to self-serve via technology, but this model won't suffice for all. Providing human support is essential — especially for reaching populations with low health literacy, poor technology access and other special needs — and consumers should be able to communicate with this support via their preferred method, such as chat, email, or phone.
How will we know if the transparency regulations have been effective?
The objective of these rules is to provide essential cost information so consumers can make affordable healthcare decisions. While many employees are covered by an employer-sponsored health plan, an employee may still be responsible for several hundred dollars in deductibles and copays. Yet Federal Reserve data show that roughly 40% of U.S. adults can’t handle a surprise bill of $400 or more, meaning a significant proportion of U.S. families still struggle to afford care.
If the new transparency rules aren't implemented appropriately, they will not fulfill the promise of finally helping U.S. populations maximize their employer-sponsored health benefits.
For employers and plans, embracing full navigation — one in which transparency is the foundation of truth and integrated into a broader solution with complementary metrics (e.g., quality), personalization, and both digital self-serve and human support options — can lead to an increased engagement rates and fewer gaps in care.
Employers and plans must determine how to best interpret the rules and define what compliance means first for Jan. 1 of 2022, 2023 and 2024. Additionally, they are challenged to go beyond compliance and to view the new regulations as an opportunity to improve and personalize the consumer experience, empowering them to take charge of their health in an impactful, sustainable way.