Health care price transparency mandates are in effect: What can HR leaders do?

As of January 1st, self-insured employers and health insurance issuers with plan years starting in 2023 were required to give health plan members access to an online, shoppable tool with pricing information for 500 of the most commonly covered medical items and services. Those who don’t comply face a potential penalty of $100 per person per day per violation. HR and benefits teams – and their payer partners – have had a lot of work to do to ensure compliance, and it’s been far more challenging than expected.

While the spirit of the Transparency in Coverage (TIC) Rule is to support cost-conscious consumer decision making, increase innovation, and lower costs, we are only just beginning to understand what it takes to make pricing data available, accessible, and actionable for everyday health care consumers. If we can do it successfully, plan members will have the ability to make better health care decisions based on the true cost of care, which has the potential to reduce health care spend and improve health outcomes across the health care system. The question remains, “what will it take?”

The government may have set minimum standards for compliance, but regulators are calling on the private sector to deliver on the promise of price transparency to lower the cost and maintain – or improve – the quality of health care. Some in the health care industry see compliance as a serious burden, but it’s important to recognize that the lack of transparency has been a burden borne by patients, their families, and those ultimately paying for their care – like their employers. Self-insured employers are in a powerful position to use this information to shine a light on what they’re paying for.

Payers, including carriers and third-party administrators, are grappling with the sheer volume and complexity of data they are required to generate and sift through to comply with the TIC Rule. The rules are pushing our health care systems into a new frontier; satisfying the mandates requires massive amounts of human and technical resources that are tasked with dismantling impossibly interdependent systems that have been built over decades. These systems were never built to be easily navigable by the average American; now, that’s the expectation that is being laid out.

It’s clear the industry has a ways to go, as the majority of price comparison tools launched earlier this month show incomplete data, have outdated user experiences, and don’t account for the reality of most modern benefits programs, which require plan members to consider an average of nine point solutions for specific conditions in addition to navigating the cost of various providers and services. Self-insured employers should be looking for partners with navigation solutions that emphasize member engagement and an intuitive user experience so that their investments in price transparency don’t go unnoticed and underutilized.

According to Amino Health advisor and former U.S. Secretary of Health and Human Services, Eric Hargan, “regulators expected the market to innovate beyond what was laid out in the Rule to make price information understandable and actionable to consumers. This involves the format it’s presented in, and – wherever possible – coupling price data with available information about the quality of care.”

The TIC Rule doesn’t mandate the provision of quality data, and all information on care quality is not created equal. People often falsely equate higher cost care with higher quality, despite the reality that the increased costs are unrelated to improved health outcomes. Traditional quality metrics do not evaluate whether the procedure, prescription, or diagnostic test was the appropriate treatment.

As a country, we spend $15.4 billion per year on measuring quality. But to date, most of these metrics focus on the results of a procedure, not on whether the procedure was appropriate. For example, hospitals track if a C-section patient gets an infection, but not whether the surgery was the most appropriate course of action given the circumstances. Increasingly, there’s recognition of this disconnect, and leading organizations are putting more resources into evaluating the appropriateness of care as a key quality metric.

Again, the availability of price information alone won’t necessarily deliver on the intent of the regulation, and self-insured employers have a big role to play in this effort by not settling for mere compliance, but demanding a higher level of innovation.

Related: Transparency alone won’t change behavior: Health care quality data is key

Price transparency is here to stay; it’s likely that self-insured employers and health insurance issuers will be required to reveal more data – not less. Consumers now both have a right, and as these regulations gain visibility, an expectation to have access to better health care information to inform their decisions. Self-insured employers and health insurance issuers have an opportunity to modernize their technology systems, center their plan members, and reduce the cost of health care system wide.

David Vivero is co-founder and CEO at Amino.