The U.S. Department of Health and Human Services recently released two sets of regulations that would make health care costs publicly available.  These regulations could significantly shake up the health care space making it easier for employers to design health benefits to steer employees toward hospitals with high value services.

The first regulation (found HERE) would require hospitals to make their standard charge list publicly available starting in 2021. This list would include payer specific negotiated rates and cash prices for hospital services.  These rules are final and include penalties for non-compliance.  Hospitals could face penalties up $300/day amounting to $109,500 annually if they do not comply with these transparency rules.  A big question is whether that penalty is high enough to incentivize compliance.  Profitable hospital systems that believe their costs are proprietary may choose to pay the penalty instead of releasing their data.

The other proposed rules (found HERE) are directed at insurers and self-funded health plans.  These regulations would require insurers and health plans to provide a pricing tool for beneficiaries stating the negotiated rate, cost sharing, and the amount left on a plan’s deductibles/coinsurance.  These rules are only in the proposed stage at this point.  The government is accepting comments from stakeholders and the public before issuing final rules.  Both the hospital and insurance industry oppose these regulations stating that this information is proprietary and could lead to collusion between health systems.

Crumdale Partners will be keeping a close eye on these regulations as they proceed through the review process. We have begun to explore new innovative ways to capture the value of these regulations if they become approved. Stay tuned for updates.