Do You Know Where Your Health Plan Dollars Go? Employers are Required to Know

On July 1st a new rule went into effect that could dramatically change how Americans shop for healthcare services in positive ways. It requires insurers to disclose prices for all covered services. The goal is to provide purchasers, employers and patients, with the cost and quality information needed to make informed decisions. The Consolidated Appropriation Act (CAA) also defines the fiduciary responsibilities of employers who sponsor health plans.
Historically, the cost of medical services has not been available, even to the largest employers, because of contractual gag clauses and other barriers. This results in wide price variations for the same services in every community. When prices insurers negotiate with providers are on full display, employers and other purchasers will be able to negotiate better terms. At present, the data reporting format, “machine readable files” required by the rule are not consumer user friendly. However, many companies are working to make the data easy for purchasers to access and interpret. In addition to price data these services will include quality and performance ratings. Employers and patients will be able to make informed decisions when they purchase health plans and shop for medical services.
Along with greater transparency, CAA provides clarification about employer’s fiduciary responsibilities as health plan sponsors, to attest they have implemented a process to understand and report on the details of the benefits program and document that they are working in the best interest of plan enrollees, to reduce costs and improve participant outcomes.