Healthcare price transparency: What it means for members, employers, and health plans

In today’s digital world, consumers can shop for goods and services with just a few simple clicks. And while shopping for healthcare needs is very different than placing an online retail order, there is still a shared goal of using technology to provide convenient and effective experiences. But when can patients expect this new digital era of healthcare and what role do health plans play in getting us there?

Over the years, consumerism in healthcare has been a key factor in modern commercial benefit plans, dating back as early as the Affordable Care Act and more recently the requirement for Advanced Explanation of Benefits (AEOBs). These new regulations mark the first steps towards healthcare price transparency. Mainly, bringing clarity to benefit descriptors, reducing insurance jargon, and imparting a deep understanding of the financial responsibilities on all parties – especially the patient.

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Where are we now?

Fast forward to today, health plans are in the final stages of implementing the Transparency in Coverage (TiC) Rule, perhaps the heaviest lift of this decade-long journey. By January 1, 2024, health plans need to provide an online member-facing shopping tool that shows all covered items and services available to members under their plan. With the deadline quickly approaching, health plans are heads down working to achieve compliance with the support of a third-party vendor or DIY with in-house talent.

Despite best efforts, in a recent AHIP webinar, 70% of health plan attendees indicated they were not confident in meeting the upcoming deadline. Several factors are to blame, with the biggest concerns being budget constraints, staff reductions, and a heightened demand for subject matter expertise.

To add on to the pressures of meeting the deadline, some health systems are now being audited and receiving hefty fines for not being compliant with hospital transparency rules that were implemented a year ago. With TiC being in effect for over a year, we anticipate payers may be placed under similar compliance scrutiny in the coming months.

Watch our AHIP webinar: Everything you need to know to comply with the TiC deadline

What are the concerns?

With all these added rules and regulations, health plans believe there is some overlap that’s causing unintentional burden as they race to achieve compliance, specifically when comparing AEOB and TiC. For example, in the fall of 2022, payers expressed concerns around the AEOB requirements with the Centers for Medicare & Medicaid Services (CMS) during an open comment timeframe. However, CMS may only respond to these concerns in March 2024 when the AEOB notice of proposed rulemaking is anticipated – three months after health plans need to meet the January 1st deadline. If staff shortages and budgets were an issue that was expressed regarding AEOB, then how will payers be able to also dedicate resources to the TiC milestone? These conflicting timelines and requirements are leaving plans in a constant state of flux and potentially impacting the consumer experience. For example, asking plans to provide cost estimates via an online shopping tool, in addition to an AEOB may generate confusion and drive member abrasion. As these policies evolve, we need to remember that providing convenient, cost-effective healthcare is what’s most important and we need to consider the member experience every step of the way.

See the top AEOB concerns the market asked CMS to consider

Considerations for members

Price transparency efforts like AEOB and TiC prioritize providing advanced information regarding healthcare goods and services to help make more informed financial and healthcare decisions. But is providing access to all covered items and services via a shopping tool a positive member experience? Some health plans have expressed concerns with giving members access to every item and service and argue that presenting thousands, or even tens of thousands, of options could complicate the decision process and cause more confusion for members.

Considerations for employers

Employers look to price transparency to help contain costs and improve quality. In a recent Business Group on Health benefits survey, employers responded that they’re prioritizing greater price transparency and data quality to help employees make more informed decisions. Most employers are supportive of engagement platforms that provide employees with information critical to selecting the best option for their health needs. In addition, employers view requirements for more transparency in pharmacy benefit management (PBM) pricing and contracting as a priority. They’d also like to see additional reporting and better provider quality measurement standards in the future.1

Considerations for health plans

Keeping in mind the goals of consumerism and member engagement as key objectives for health plans and third-party administrators (TPAs), it’s important we strike a balance of providing the right information at the right time. Providing too much information can result in poor experiences and leave the consumer confused, whereas providing too little makes it hard to decide with confidence. Looking ahead, health plans need to prioritize compliance while also enhancing member engagement. A positive member experience is pivotal to retention goals.

At Merative, we believe healthcare price transparency is critical and benefits the greater good. We have the expertise, advocacy, and technology to help health plans stay true to the mission of healthcare price transparency while maintaining compliance. For over 15 years, we’ve been providing unmatched regulatory support for payers and member-facing decision support tools to more than 29M consumers.

Try our online shopping tool for free and see how we’re helping keep an individual and their family at the center of each healthcare decision.

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  1. Business Group on Health 2024 large Employer Health care strategy survey, published Aug 2023