Transparency in Coverage, 65464-65523 [2019-25011]

Agencies

• Employee Benefits Security Administration
• DEPARTMENT OF HEALTH AND HUMAN SERVICES
• Internal Revenue Service
• DEPARTMENT OF LABOR
• DEPARTMENT OF THE TREASURY

[Federal Register Volume 84, Number 229 (Wednesday, November 27, 2019)]
[Proposed Rules]
[Pages 65464-65523]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-25011]



[[Page 65463]]

Vol. 84

Wednesday,

No. 229

November 27, 2019

Part II





Department of the Treasury





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Internal Revenue Service





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26 CFR Part 54





Department of Labor





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Employee Benefits Security Administration





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29 CFR Part 2590





Department of Health and Human Services





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45 CFR Subchapter E, Part 147, and Part 158





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Medicare and Medicaid Programs: CY 2020 Hospital Outpatient PPS Policy 
Changes and Payment Rates and Ambulatory Surgical Center Payment System 
Policy Changes and Payment Rates. Price Transparency Requirements for 
Hospitals To Make Standard Charges Public; Transparency in Coverage; 
Final Rule and Proposed Rule

Federal Register / Vol. 84 , No. 229 / Wednesday, November 27, 2019 / 
Proposed Rules

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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 54

[REG-118378-19]
RIN 1545-BP47

DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Part 2590

RIN 1210-AB93

DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Parts 147 and 158

[CMS-9915-P]
RIN 0938-AU04


Transparency in Coverage

AGENCY: Internal Revenue Service, Department of the Treasury; Employee 
Benefits Security Administration, Department of Labor; Centers for 
Medicare & Medicaid Services, Department of Health and Human Services.

ACTION: Proposed rule.

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SUMMARY: These proposed rules set forth proposed requirements for group 
health plans and health insurance issuers in the individual and group 
markets to disclose cost-sharing information upon request, to a 
participant, beneficiary, or enrollee (or his or her authorized 
representative), including an estimate of such individual's cost-
sharing liability for covered items or services furnished by a 
particular provider. Under these proposed rules, plans and issuers 
would be required to make such information available on an internet 
website and, if requested, through non-internet means, thereby allowing 
a participant, beneficiary, or enrollee (or his or her authorized 
representative) to obtain an estimate and understanding of the 
individual's out-of-pocket expenses and effectively shop for items and 
services. These proposed rules also include proposals to require plans 
and issuers to disclose in-network provider negotiated rates, and 
historical out-of-network allowed amounts through two machine-readable 
files posted on an internet website, thereby allowing the public to 
have access to health insurance coverage information that can be used 
to understand health care pricing and potentially dampen the rise in 
health care spending. The Department of Health and Human Services (HHS) 
also proposes amendments to its medical loss ratio program rules to 
allow issuers offering group or individual health insurance coverage to 
receive credit in their medical loss ratio calculations for savings 
they share with enrollees that result from the enrollee's shopping for, 
and receiving care from, lower-cost, higher-value providers.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, no later than 5 p.m. on January 14, 2020.

ADDRESSES: Written comments may be submitted to the addresses specified 
below. Any comment that is submitted will be shared with the Department 
of the Treasury (Treasury Department), Internal Revenue Service (IRS) 
and the Department of Labor (DOL). Please do not submit duplicates.
    All comments will be made available to the public. Warning: Do not 
include any personally identifiable information (such as name, address, 
or other contact information) or confidential business information that 
you do not want publicly disclosed. All comments are posted on the 
internet exactly as received, and can be retrieved by most internet 
search engines. No deletions, modifications, or redactions will be made 
to the comments received, as they are public records. Comments may be 
submitted anonymously.
    In commenting, please refer to file code CMS-9915-P. Because of 
staff and resource limitations, the Departments of Labor, HHS, and the 
Treasury (the Departments) cannot accept comments by facsimile (FAX) 
transmission.
    Comments must be submitted in one of the following three ways 
(please choose only one of the ways listed):
    1. Electronically. You may submit electronic comments on this 
regulation to https://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-9915-P, P.O. Box 8010, 
Baltimore, MD 21244-8010.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-9915-P, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. The comments are posted on 
the following website as soon as possible after they have been received 
https://www.regulations.gov. Follow the search instructions on that 
website to view public comments.

FOR FURTHER INFORMATION CONTACT: 
    Deborah Bryant, Centers for Medicare and Medicaid Services, (301) 
492-4293.
    Christopher Dellana, Internal Revenue Service, (202) 317-5500.
    Matthew Litton or David Sydlik, Employee Benefits Security 
Administration, (202) 693-8335.
    Customer Service Information: Individuals interested in obtaining 
information from the DOL concerning employment-based health coverage 
laws may call the Employee Benefits Security Administration (EBSA) 
Toll-Free Hotline at 1-866-444-EBSA (3272) or visit DOL's website 
(https://www.dol.gov/ebsa). In addition, information from HHS on private 
health insurance for consumers can be found on the Centers for Medicare 
& Medicaid Services (CMS) website (www.cms.gov/cciio) and information 
on health reform can be found at https://www.healthcare.gov.

SUPPLEMENTARY INFORMATION:

I. Background

A. Executive Order

    On June 24, 2019, President Trump issued Executive Order 13877, 
``Executive Order on Improving Price and Quality Transparency in 
American Healthcare to Put Patients First.'' \1\ Section 3(b) of 
Executive Order 13877 directs the Secretaries of the Departments of 
Labor, Health and Human Services (HHS), and the Treasury (the 
Departments) to issue an advance notice of proposed rulemaking (ANPRM), 
consistent with applicable law, soliciting comment on a proposal to 
require health care providers, health insurance issuers, and self-
insured group health plans to provide or facilitate access to 
information about expected out-of-pocket costs for items or services to 
patients before they receive care. The Departments have considered the 
issue, including by consulting with stakeholders, and have determined 
that a notice of proposed rulemaking (NPRM), rather than an ANPRM, 
would allow for more specific and useful feedback from commenters, who 
would

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be able to respond to specific proposals. Additionally, increases in 
health care costs and out-of-pocket liability without transparent, 
meaningful information about health care pricing have left consumers 
with little ability to make cost-conscious decisions when purchasing 
health care items and services. An NPRM, rather than an ANPRM, would 
enable the Departments to more quickly address this pressing issue.
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    \1\ 84 FR 30849 (June 27, 2019). The Executive Order was issued 
on June 24, 2019 and was published in the Federal Register on June 
27, 2019.
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B. Benefits of Transparency in Health Coverage and Past Efforts To 
Promote Transparency

    As explained earlier in this preamble, these proposed rules will 
fulfill the Departments' responsibility under Executive Order 13877. 
These proposed rules also would implement legislative mandates under 
sections 1311(e)(3) of the Patient Protection and Affordable Care Act 
(PPACA) and section 2715A of the Public Health Service (PHS) Act. The 
overarching goal of these proposed rules is to support a market-driven 
health care system by giving consumers the information they need to 
make informed decisions about their health care and health care 
purchases. Specifically, the purposes of these proposed rules are to 
provide consumers with price and benefit information that will enable 
them to evaluate health care options and to make cost-conscious 
decisions; reduce surprises in relation to consumers' out-of-pocket 
costs for health care services; create a competitive dynamic that will 
begin to narrow price differences for the same services in the same 
health care markets; foster innovation by providing industry the 
information necessary to support informed, price-conscious consumers in 
the health care market; and, over time, potentially lower overall 
health care costs. The Departments are of the view that this price 
transparency effort will equip consumers with information to actively 
and effectively participate in the health care system, the prices for 
which should be driven and controlled by market forces. For these 
reasons and those explained in more detail later in this preamble, 
these price transparency efforts are crucial to providing consumers 
with information about health care costs and to stabilizing health care 
spending.
    As explained in the report ``Reforming America's Healthcare System 
through Choice and Competition,'' \2\ consumers have an important role 
to play in controlling costs, but consumers must have meaningful 
information in order to create the market forces necessary to achieve 
lower health care costs. Most health care consumers rely on third-party 
payers, including the government and private health insurance, to 
reimburse health care providers for a large portion of their health 
care costs. Third-party payers negotiate prices with health care 
providers and reimburse the providers on the consumer's behalf, which 
conceals from consumers the true market price of their care. When 
consumers seek care, they do not typically know whether they could have 
received the same service from another provider offering lower prices. 
Because a large portion of insured consumers' out-of-pocket financial 
liability has historically, for many consumers, not been dependent on 
the provider's negotiated rate with the third-party payer, there has 
been little or no incentive for some consumers to consider price and 
seek out lower-cost care.\3\ However, as health care spending continues 
to rise, consumers are shouldering a greater portion of their health 
care costs.\4\
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    \2\ Azar, A.M., Mnuchin, S.T., and Acosta, A. ``Reforming 
America's Healthcare System Through Choice and Competition.'' 
December 3, 2018. Available at: https://www.hhs.gov/sites/default/files/Reforming-Americas-Healthcare-System-Through-Choice-and-Competition.pdf.
    \3\ Id.
    \4\ Claxton, G., Levitt, L., Long M. ``Payments for cost sharing 
increasing rapidly over time.'' Peterson-Kaiser Health System 
Tracker. April 2016. Available at: https://www.healthsystemtracker.org/brief/payments-for-cost-sharing-increasing-rapidly-over-time/.
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    In the private health insurance market, consumers are responsible 
for a greater share of their health care costs through higher 
deductibles and shifts from copayments to coinsurance.\5\ A deductible 
is the amount a consumer pays for covered health services before his or 
her health plan starts to pay.\6\ Generally, the amount the consumer 
pays for a specific item or service furnished by a network provider 
before the deductible is met is the rate the group health plan or 
health insurance issuer has negotiated with the provider, also referred 
to as the negotiated rate. A study of large employer health plans found 
that the portion of payments paid by consumers for deductibles 
increased from 20 percent to 51 percent between 2003 and 2017.\7\ 
Furthermore, enrollment in health plans with high deductibles is also 
increasing. In 2018, the Centers for Disease Control and Prevention 
estimated that 47 percent of persons under age 65 with private health 
insurance were enrolled in health plans with high deductibles, up from 
25.3 percent in 2010.\8\
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    \5\ Ray, M., Copeland, R., Cox, C. ``Tracking the rise in 
premium contributions and cost-sharing for families with large 
employer coverage,'' Peterson-Kaiser Health System Tracker. August 
14, 2019. Available at: https://www.healthsystemtracker.org/brief/tracking-the-rise-in-premium-contributions-and-cost-sharing-for-families-with-large-employer-coverage/.
    \6\ https://www.healthcare.gov/glossary/deductible/.
    \7\ Claxton, G., Levitt, L., Long, M. ``Payments for cost 
sharing increasing rapidly over time.'' Peterson-Kaiser Health 
System Tracker. April 2016. Available at: https://www.healthsystemtracker.org/brief/payments-for-cost-sharing-increasing-rapidly-over-time/.
    \8\ Cohen, R., Martinez, M., Zammitti, E. ``Health insurance 
Coverage: Early Release of Estimates from the National Health 
Interview Survey, January-March 2018.'' August 2018. Available at: 
https://www.cdc.gov/nchs/data/nhis/earlyrelease/Insur201808.pdf.
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    Coinsurance is the percentage of costs a participant, beneficiary, 
or enrollee pays for a covered item or service after he or she has paid 
his or her deductible.\9\ Copayments (sometimes called ``copays'') are 
a fixed amount ($20, for example) that a consumer pays for a covered 
item or service, usually when he or she receives the service. Copays 
can vary for different items or services within the same plan, like 
prescription drugs, laboratory tests, and visits to specialists.\10\ 
Copayments are both more predictable for consumers, because the 
copayment amount is set in advance, and often less expensive for 
consumers than coinsurance amounts. For instance, assuming an 
individual has met his or her deductible, if a plan or issuer has 
negotiated the cost of a procedure with a particular provider to be 
$1,000, and the plan or issuer has a 20 percent coinsurance 
requirement, the individual would be responsible for paying a $200 
coinsurance amount toward the cost of the procedure.
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    \9\ https://www.healthcare.gov/glossary/co-insurance/.
    \10\ https://www.cms.gov/CCIIO/Resources/Files/Downloads/uniform-glossary-final.pdf.
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    In the health care market, where consumers generally are 
responsible for paying higher deductibles and have more cost sharing in 
the form of coinsurance, out-of-pocket liability is often directly 
contingent upon the reimbursement rate a health plan has negotiated 
with a provider. The fact that more consumers are bearing greater 
financial responsibility for the cost of their health care provides the 
opportunity to establish a consumer-driven health care market. If 
consumers have better pricing information and can shop for health care 
items and services more efficiently, they can increase competition and 
demand for lower prices.\11\ Currently, however, consumers

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have little insight into negotiated rates until after services are 
rendered. As a result, it can be difficult for consumers to estimate 
potential out-of-pocket costs because of the wide variability in health 
care prices for the same service.\12\
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    \11\ Azar, A.M., Mnuchin, S.T., and Acosta, A. ``Reforming 
America's Healthcare System Through Choice and Competition.'' 
December 3, 2018. Available at: https://www.hhs.gov/sites/default/files/Reforming-Americas-Healthcare-System-Through-Choice-and-Competition.pdf.
    \12\ Cooper, Z., Craig, S., Gaynor, M., Reenen J. ``The Price 
Ain't Right? Hospital Prices and Health Spending on the Privately 
Insured.'' 134. Q. J. of Econ 51. September 4, 2018. Available at: 
https://academic.oup.com/qje/article/134/1/51/5090426?searchresult=1.
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    Without transparency in pricing, there are little to no market 
forces to drive competition, as demonstrated by significant variations 
in prices for procedures,\13\ even within a local region. For example, 
a study of price variation in the San Francisco area showed that, even 
for a relatively commoditized service such as a lower-back MRI, prices 
ranged from $500 to $10,246.\14\ A study on reference pricing in the 
California Public Employees' Retirement System found a range of $12,000 
to $75,000 for the same joint replacement surgery, $1,000 to $6,500 for 
cataract removal, and $1,250 to $15,500 for arthroscopy of the 
knee.\15\ Variability in pricing, such as in these examples, suggests 
that there is substantial opportunity for increased transparency to 
save money by shifting patients from high to lower-cost providers.\16\
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    \13\ Id.
    \14\ Pinder, J. ``Why do MRI prices vary so much? And a note 
about our data.'' Clear Health Costs. July 17, 2014. Available at: 
https://clearhealthcosts.com/blog/2014/07/prices-vary-much-mini-case-study-mri/.
    \15\ Boynton, A., Robinson, J. ``Appropriate Use of Reference 
Pricing Can Increase Value.'' Health Affairs Blog. July 7, 2015. 
Available at: https://www.healthaffairs.org/do/10.1377/hblog20150707.049155/full/.
    \16\ Sinaiko, A., Rosenthal, M. ``Examining a Health Care Price 
Transparency Tool: Who Uses it, and How They Shop for Care.'' 35 
Health Affairs 662. April 2016. Available at: https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2015.0746.
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    Many empirical studies have investigated the impact of price 
transparency on markets, with most research showing that price 
transparency leads to lower and more uniform prices, consistent with 
predictions of standard economic theory. One study notes special 
characteristics of the health market, including that: (1) Diseases and 
treatments affect each patient differently, making health care 
difficult to standardize and making price dispersion difficult to 
monitor; (2) patients cannot always know what they want or need, and 
physicians must serve as their agents; and (3) patients are in a poor 
position to choose a hospital because they do not have a lot of 
information about hospital quality and costs.\17\ This study suggests 
that these special characteristics of the health care market, among 
other relevant factors, make it difficult to draw conclusions based on 
empirical evidence gathered from other markets. Nevertheless, the same 
study concluded that despite these complications, greater price 
transparency, such as access to posted prices, might lead to more 
efficient outcomes and lower prices.
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    \17\ Congressional Research Service Report to Congress: Does 
Price Transparency Improve Market Efficiency? Implications of 
Empirical Evidence in Other Markets for the Healthcare Sector, July 
24, 2007. Available at: https://fas.org/sgp/crs/secrecy/RL34101.pdf.
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    In Kentucky, public employees are provided with a price 
transparency tool that allows them to shop for health care services and 
share in any cost-savings realized by seeking lower-cost care. Over a 
3-year period, 42 percent of eligible employees used the program to 
look up information about prices and rewards and 57 percent of those 
chose at least one more cost-effective provider, saving state taxpayers 
$13.2 million and resulting in $1.9 million in cash benefits paid to 
public employees for seeking lower cost care.\18\ In 2007, New 
Hampshire launched a website that allows consumers with private health 
insurance to compare health care costs and quality.\19\ In a recent 
study of the New Hampshire price transparency tool, researchers found 
that health care price transparency can shift care to lower-cost 
providers and save consumers and payers money.\20\ The study 
specifically focused on X-rays, CT scans, and MRI scans; determined 
that the transparency tool reduced the costs of medical imaging 
procedures by 5 percent for patients and 4 percent for issuers; and 
estimated savings of $7.9 million for patients and $36 million for 
issuers over a 5-year period. At the end of the 5-year period, out-of-
pocket costs for these services in New Hampshire were 11 percent lower 
than for medical imaging services not included in the transparency 
tool. Individuals who had not yet satisfied their deductible saw almost 
double the savings, and prices for services listed in the tool became 
less dispersed over time.\21\ The Departments are of the view that 
health care markets could work more efficiently and provide consumers 
with lower cost health care if individuals could see an estimate of 
their out-of-pocket liability prior to making their health care 
purchases.
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    \18\ Rhoads, J. ``Right to Shop for Public Employees: How Health 
Care Incentives are Saving Money in Kentucky.'' Dartmouth Inst. for 
Health Pol'y and Clinical Prac. March 8, 2019. Available at: https://thefga.org/wp-content/uploads/2019/03/RTS-Kentucky-HealthCareIncentivesSavingMoney-DRAFT8.pdf.
    \19\ ``Compare Health Costs & Quality of Care in New 
Hampshire.'' NH HealthCost. https://nhhealthcost.nh.gov/.
    \20\ Brown, Z. ``Equilibrium Effects of Health Care Price 
Information.'' 100 Rev. of Econ. and Stat. 1. July 16, 2018. 
Available at: https://www-personal.umich.edu/~zachb/
zbrown_eqm_effects_price_transparency.pdf.)
    \21\ Id.
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    A study of enrollees in plans with high deductibles found that 
respondents wanted additional health care pricing information so they 
could make more informed decisions about where to seek care based on 
price.\22\ Another study found that 71 percent of respondents said that 
out-of-pocket spending was either important or very important to them 
when choosing a doctor.\23\
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    \22\ Sinaiko, A., Mehrotra, A., Sood, N. ``Cost-Sharing 
Obligations, High-Deductible Health Plan Growth, and Shopping for 
Health Care: Enrollees with Skin in the Game.'' 176 JAMA Intern. 
Med. 395. March 2016. Available at: https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2482348.
    \23\ Ateev, M., Dean, K., Sinaiko, A., Neeraj, S. ``Americans 
Support Price Shopping For Health Care, But Few Actually Seek Out 
Price Information.'' 36 Health Affairs. 1392. August 2017. Available 
at: https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2016.1471.
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    Currently, the information that consumers need to make informed 
decisions based on the prices of health care services is not readily 
available. The 2011 Government Accountability Office (GAO) report, 
``Health Care Price Transparency: Meaningful Price Information is 
Difficult for Consumers to Obtain Prior to Receiving Care,'' found that 
the lack of transparency in health care prices, coupled with the wide 
pricing disparities for particular procedures within the same market, 
can make it difficult for consumers to understand health care prices 
and to effectively shop for value.\24\ The report references a number 
of barriers that make it difficult for consumers to obtain price 
estimates in advance for health care services. Such barriers include, 
for example, the difficulty of predicting health care service needs in 
advance, a complex billing structure resulting in bills from multiple 
providers, the variety of insurance benefit structures, and the lack of 
public disclosure of rates negotiated between providers and third-party 
payers.
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    \24\ https://www.gao.gov/products/GAO-11-791.
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    The GAO report also explored various price transparency 
initiatives, including tools that consumers could use to generate price 
estimates before receiving a health care service. The report notes that 
pricing information displayed by tools varies across initiatives, in 
large

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part due to limits reported by the initiatives in their access or 
authority to collect certain necessary price data. According to the GAO 
report, transparency initiatives that provided consumers with a 
reasonable estimate of their complete costs integrated pricing data 
from both providers and plans and issuers. The GAO report, therefore, 
recommended that HHS determine the feasibility, and the next steps, of 
making estimates of out-of-pocket costs \25\ for health care services 
available to consumers.\26\
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    \25\ GAO defines an estimate of a consumer's complete health 
care cost as pricing information on a service that identifies a 
consumer's out-of-pocket cost, including any negotiated discounts, 
and all costs associated with a service or services.
    \26\ https://www.gao.gov/products/GAO-11-791.
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    States have been at the forefront of transparency initiatives and 
some have required disclosure of pricing information for years. More 
than half of the states have passed legislation establishing price 
transparency websites or mandating that health plans, hospitals, or 
physicians make pricing information available to patients.\27\ As of 
early 2012, there were 62 consumer-oriented, state-based health care 
price comparison websites. Half of these websites were launched after 
2006, and most were hosted by a state government agency (46.8 percent) 
or hospital association (38.7 percent). Most websites reported prices 
of inpatient care for medical conditions (72.6 percent) or surgeries 
(71.0 percent). Information about prices of outpatient services such as 
diagnostic or screening procedures (37.1 percent), radiology studies 
(22.6 percent), prescription drugs (14.5 percent), or laboratory tests 
(9.7 percent) were reported less often.\28\ However, it is important to 
note that the state efforts directed at plans are not applicable to 
self-insured group health plans. As a result, the data collected does 
not include data from self-insured group health plans and a significant 
portion of consumers would not have access to information on their 
plans.
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    \27\ Frakt, A., Mehrotra, A. ``What Type of Price Transparency 
Do We Need in Health Care?'' 170 Ann. Intern. Med. 561. April 16, 
2019. Available at: https://mfprac.com/web2019/07literature/literature/Misc/HealthTransparency_Frankt.pdf.
    \28\ Kullgren, J., Duey, K, Werner, R. ``A Census of State 
Health Care Price Transparency Websites.'' 309 JAMA 2437. June 19, 
2013. Available at: https://jamanetwork.com/journals/jama/fullarticle/1697957.
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    States have adopted a variety of approaches to improve price 
transparency.\29\ In 2012, Massachusetts began requiring issuers to 
provide, upon request, the estimated amount insured patients would be 
responsible to pay for proposed admissions, procedures, or services 
based upon the information available to the issuer at the time, and 
also began requiring providers to disclose the charge for the 
admission, procedure, or service upon request by the patient within 2 
working days.\30\ Sixteen states have implemented all-payer claims 
databases that include health care prices and quality information; and 
of these 16 states, 8 states make both price and quality information 
available to the public through state-based websites.\31\
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    \29\ ``2017 Price Transparency & Physician Quality Report 
Card.'' Catalyst for Payment Reform. Available at: https://www.catalyze.org/product/2017-price-transparency-physician-quality-report-card/.
    \30\ Jenkins, K. ``CMS Price Transparency Push Trails State 
Initiatives.'' Nat'l L. Rev. February 8, 2019. Available at: https://www.natlawreview.com/article/cms-price-transparency-push-trails-state-initiatives.
    \31\ ``The State Of State Legislation Addressing Health Care 
Costs And Quality,'' Health Affairs Blog. August 22, 2019. Available 
at: https://www.healthaffairs.org/do/10.1377/hblog20190820.483741/full/.
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    Health insurance issuers and self-insured group health plans also 
have moved in the direction of increased price transparency. For 
example, some group health plans are using price transparency tools to 
incentivize employees to make cost conscious decisions when purchasing 
health care services. Most large issuers have embedded cost estimator 
tools into their enrollee websites, and some provide their enrollees 
with comparative cost information, which includes rates that the 
issuers and plans have negotiated with in-network providers and 
suppliers.
    In the HHS 2020 Notice of Benefit and Payment Parameters (2020 
Payment Notice) proposed rule,\32\ HHS sought input on ways to provide 
consumers with greater transparency with regard to their own health 
care data, Qualified Health Plan (QHP) offerings on the Federally-
facilitated Exchanges (FFEs),\33\ and the cost of health care services. 
Additionally, HHS sought comment on ways to further implement section 
1311(e)(3) of PPACA, as implemented by 45 CFR 156.220(d), under which, 
upon the request of an enrollee, a QHP issuer must make available in a 
timely manner the amount of enrollee cost sharing under the enrollee's 
coverage for a specific service furnished by an in-network provider. 
HHS was particularly interested in what types of data would be most 
useful to improving consumers' abilities to make informed health care 
decisions, including decisions related to their coverage specifications 
and ways to improve consumer access to information about health care 
costs.
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    \32\ 84 FR 227 (Jan. 24, 2019).
    \33\ The term ``Exchanges'' means American Health Benefit 
Exchanges established under section 1311 of PPACA. See section 
2791(d)(21) of the PHS Act.
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    Commenters on the 2020 Payment Notice overwhelmingly supported the 
idea of increased price transparency. Many commenters provided 
suggestions for defining the scope of price transparency requirements, 
such as providing costs for both in-network and out-of-network health 
care, and providing health care cost estimates that include an 
accounting for consumer-specific benefit information, like progress 
toward meeting deductibles and out-of-pocket limits, as well as 
remaining visits under visit limits. Commenters expressed support for 
implementing price transparency requirements across all private markets 
and for price transparency efforts to be a part of a larger payment 
reform effort and a provider empowerment and patient engagement 
strategy. Some commenters advised HHS to carefully consider how such 
policies should be implemented, warning against federal duplication of 
state efforts and requirements that would result in group health plans 
and health insurance issuers passing along increased administrative 
costs to consumers, and cautioning that the proprietary and competitive 
nature of payment data should be protected.
    In the summer and fall of 2018, HHS hosted listening sessions 
related to the goal of empowering consumers by ensuring the 
availability of useable pricing information. Participants included a 
wide representation of stakeholders from providers, issuers, 
researchers, and consumer and patient advocacy groups. Participants 
noted that currently available pricing tools are underutilized, in part 
because consumers are often unaware that they exist, and even when 
used, the tools sometimes convey inconsistent and inaccurate 
information.
    Participants also commented that tool development can be expensive, 
especially for smaller health plans, which tend to invest less in 
technology because of the limited return on investment. Participants 
also commented that most tools developed to date do not allow for 
comparison shopping. Participants stated that existing tools usually 
use historical claims data, which results in broad, sometimes regional 
estimates, rather than accurate and individualized prices. In addition, 
participants noted pricing tools are rarely available when and where 
consumers are likely to make health care decisions, for example, during 
interactions with providers. This

[[Page 65468]]

means that patients are not able to consider relevant cost issues when 
discussing referral options or the tradeoffs of various treatment 
options with referring providers. In a national study, there was 
alignment between patients, employers, and providers in wanting to know 
and discuss the cost of care at the point of service.\34\ With access 
to patient-specific cost estimates for services furnished by particular 
providers, referring providers and their patients could take pricing 
information into account when considering treatment options.
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    \34\ ``Let's Talk About Money.'' University of Utah. https://uofuhealth.utah.edu/value/lets-talk-about-money.php.
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    In response to this feedback, CMS has pursued initiatives in 
addition to these proposed rules to improve access to the information 
necessary to empower consumers to make more informed decisions about 
their health care costs. These initiatives have included a multi-step 
effort to implement section 2718(e) of the PHS Act, which was added by 
section 1001 of PPACA (Pub. L. 111-148), as amended by section 10101 of 
the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-
152). Section 2718(e) of the PHS Act requires each hospital operating 
within the United States to, for each year, establish (and update) and 
make public (in accordance with guidelines developed by the Secretary) 
a list of the hospital's standard charges for items and services 
provided by the hospital, including for diagnosis-related groups 
established under section 1886(d)(4) of the Social Security Act (SSA). 
In the Fiscal Year (FY) 2015 Hospital Inpatient Prospective Payment 
Systems and Long Term Care Hospital Prospective Payment Systems (IPPS/
LTCH PPS) final rule,\35\ CMS reminded hospitals of their obligation to 
comply with the provisions of section 2718(e) of the PHS Act and 
provided guidelines for its implementation. At that time, CMS required 
hospitals to either make public a list of their standard charges or 
their policies for allowing the public to view a list of those charges 
in response to an inquiry. In addition, CMS stated that it expected 
hospitals to update the information at least annually, or more often as 
appropriate, to reflect current charges, and encouraged hospitals to 
undertake efforts to engage in consumer-friendly communication of their 
charges to enable consumers to compare charges for similar services 
across hospitals and to help them understand what their potential 
financial liability might be for items and services they obtain at the 
hospital.
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    \35\ 79 FR 49854, 50146, (Aug. 22, 2014).
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    In the FY 2019 IPPS/LTCH PPS final rule,\36\ CMS again reminded 
hospitals of their obligation to comply with section 2718(e) of the PHS 
Act and announced an update to its guidelines. The updated guidelines, 
which have been effective since January 1, 2019, require hospitals to 
make available a list of their current standard charges (whether in the 
form of a ``chargemaster'' or another form of the hospital's choice) 
via the internet in a machine-readable format and to update this 
information at least annually, or more often as appropriate. The intent 
of the guidelines is to improve consumer access to important 
information regarding the cost of their health care through hospital 
websites. Price transparency and the ability to compare standard 
charges across hospitals can empower consumers to be more informed and 
exercise greater control over their purchasing decisions.
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    \36\ 83 FR 41144, 41686 (Aug. 17, 2018).
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    In response to stakeholder feedback and Executive Order 13877, CMS 
took another important step toward improving health care value and 
increasing competition in the Calendar Year 2020 Hospital Outpatient 
Policy Payment System (OPPS) Policy Changes and Payment Rates and 
Ambulatory Surgical Center Payment System Policy Changes and Payment 
Rates: Price Transparency Requirements for Hospitals to Make Standard 
Charges Public (CMS-1717-F2) final rule (OPPS Price Transparency final 
rule) by codifying requirements under section 2718(e) of the PHS Act as 
well as a regulatory scheme under section 2718(b)(3) of the PHS Act 
that enables CMS to enforce those requirements.\37\ To further improve 
public access to meaningful hospital charge information, CMS is 
requiring hospitals to make publicly available their gross charges (as 
found in the hospital's chargemaster), their payer-specific negotiated 
charges, their discounted cash prices, and their de-identified minimum 
and maximum negotiated charges for all items and services they provide 
through a single online machine-readable file that is updated at least 
once annually. Additionally, the final rule requires hospitals to 
display online in a consumer-friendly format the payer-specific 
negotiated charges, discounted cash prices and de-identified minimum 
and maximum negotiated charges for as many of the 70 shoppable services 
selected by CMS that the hospital provides and as many additional 
hospital-selected shoppable services as are necessary for a combined 
total of at least 300 shoppable services (or if the hospital provides 
less than 300 shoppable services, then as many as the hospital 
provides). CMS defines shoppable services as a service that can be 
scheduled by a health care consumer in advance, and has further 
explained that shoppable services are typically those that are 
routinely provided in non-urgent situations that do not require 
immediate action or attention to the patient, thus allowing patients to 
price shop and schedule such services at times that are convenient for 
them.
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    \37\ Published elsewhere in this issue of the Federal Register.
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    The Departments have concluded that the final rules under section 
2718(e) of the PHS Act would not result in consumers receiving complete 
price estimates for health care items and services because, as the GAO 
concluded, complete price estimates require pricing information from 
both providers and health insurance issuers.\38\ In addition, because 
section 2718(e) of the PHS Act applies only to items and services 
provided by hospitals, the final requirements under that section would 
not improve the price transparency of items and services provided by 
other health care entities. Accordingly, the Departments have concluded 
that additional price transparency efforts are necessary to empower a 
more price-conscious and responsible health care consumer, promote 
competition in the health care industry, and lower the overall rate of 
growth in health care spending.
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    \38\ https://www.gao.gov/products/GAO-11-791.
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    Despite these price transparency efforts, there continues to be a 
lack of easily accessible pricing information for consumers to use when 
shopping for health care services. While there are several efforts 
across states, many still do not require private market plans and 
issuers to provide real-time, out-of-pocket cost estimates to 
participants, beneficiaries, and enrollees.\39\ Furthermore, states do 
not have authority to require such disclosures to participants and 
beneficiaries of self-insured group health plans, which compose a 
significant portion of the private market.\40\ These proposed rules are 
meant, in part, to address this lack of easily accessible pricing 
information,

[[Page 65469]]

and represent a critical part of the Departments' overall strategy for 
reforming health care markets by promoting transparency, competition, 
and choice across the health care industry.
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    \39\ ``2017 Price Transparency & Physician Quality Report 
Card.'' Catalyst for Payment Reform. Available at: https://www.catalyze.org/product/2017-price-transparency-physician-quality-report-card/.
    \40\ Self-Insured Health Benefit Plans 2019: Based on Filings 
through Statistical Year 2016. January 7, 2019. Available at: 
https://www.dol.gov/sites/dolgov/files/EBSA/researchers/statistics/retirement-bulletins/annual-report-on-self-insured-group-health-plans-2019-appendix-b.pdf.
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    The Departments, therefore, believe that additional rulemaking is 
necessary and appropriate to ensure consumers can exercise meaningful 
control over their health care and health care spending. The 
disclosures that the Departments are proposing to require would ensure 
consumers have ready access to the information they need to estimate 
their potential out-of-pocket costs for health care items and services 
before a service is delivered. These proposed rules would also empower 
consumers by incentivizing market innovators to help consumers 
understand how their plan or coverage pays for health care and to shop 
for health care based on price, which is a fundamental factor in any 
purchasing decision.

C. Statutory Background and Enactment of PPACA

    The Patient Protection and Affordable Care Act was enacted on March 
23, 2010 and the Health Care and Education Reconciliation Act of 2010 
was enacted on March 30, 2010 (collectively, PPACA). As relevant here, 
PPACA reorganized, amended, and added to the provisions of part A of 
title XXVII of the PHS Act relating to health coverage requirements for 
group health plans and health insurance issuers in the group and 
individual markets. The term ``group health plan'' includes both 
insured and self-insured group health plans.
    PPACA also added section 715 to the Employee Retirement Income 
Security Act of 1974 (ERISA) and section 9815 to the Internal Revenue 
Code (Code) to incorporate the provisions of part A of title XXVII of 
the PHS Act, PHS Act sections 2701 through 2728 into ERISA and the 
Code, making them applicable to plans and issuers providing health 
insurance coverage in connection with group health plans.
1. Transparency in Coverage
    Section 2715A of the PHS Act provides that group health plans and 
health insurance issuers offering group or individual health insurance 
coverage shall comply with section 1311(e)(3) of PPACA, except that a 
plan or coverage that is not offered through an Exchange shall only be 
required to submit the information required to the Secretary and the 
state's insurance commissioner, and make such information available to 
the public. Section 1311(e)(3) of PPACA addresses transparency in 
health care coverage and imposes certain reporting and disclosure 
requirements for health plans that are seeking certification as QHPs 
that may be offered on an Exchange.
    Paragraph (A) of section 1311(e)(3) of PPACA requires plans seeking 
certification as a QHP to submit the following information to state 
insurance regulators, the Secretary of HHS, and the Exchange and to 
make that information available to the public:
     Claims payment policies and practices,
     Periodic financial disclosures,
     Data on enrollment,
     Data on disenrollment,
     Data on the number of claims that are denied,
     Data on rating practices,
     Information on cost sharing and payments with respect to 
any out-of-network coverage, and
     Information on enrollee and participant rights under this 
title.
    Paragraph (A) also requires plans seeking certification as a QHP to 
submit any ``[o]ther information as determined appropriate by the 
Secretary.''
    Paragraph (C) requires those plans, as a requirement of 
certification as a QHP, to permit individuals to learn the amount of 
cost sharing (including deductibles, copayments, and coinsurance) under 
the individual's coverage that the individual would be responsible for 
paying with respect to the furnishing of a specific item or service by 
an in-network provider in a timely manner upon the request of the 
individual. Paragraph (C) specifies that, at a minimum, such 
information shall be made available to such individual through an 
internet website and such other means for individuals without access to 
the internet.
    On March 27, 2012, HHS issued the Exchange Establishment final rule 
\41\ that implemented sections 1311(e)(3)(A) through (C) of PPACA at 45 
CFR 155.1040(a) through (c) and 156.220. The Exchange Establishment 
final rule created standards for QHP issuers to submit specific 
information related to transparency in coverage. QHPs are required to 
post and make data related to transparency in coverage available to the 
public in plain language and submit this same data to HHS, the 
Exchange, and the state insurance commissioner. In the preamble to the 
Exchange Establishment final rule, HHS noted that ``health plan 
standards set forth under this final rule are, for the most part, 
strictly related to QHPs certified to be offered through the Exchange 
and not the entire individual and small group market. Such policies for 
the entire individual and small and large group markets have been, and 
will continue to be, addressed in separate rulemaking issued by HHS, 
and the Departments of Labor and the Treasury.''
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    \41\ https://www.govinfo.gov/content/pkg/FR-2012-03-27/pdf/2012-6125.pdf.
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2. Medical Loss Ratio (MLR)
    Section 2718(a) and (b) of the PHS Act, as added by PPACA, 
generally requires health insurance issuers to submit an annual MLR 
report to HHS, and provide rebates to enrollees if the issuers do not 
achieve specified MLR thresholds. HHS proposes to amend its MLR program 
rules under section 2718(c) of the PHS Act, under which the 
methodologies for calculating measures of the activities reported under 
section 2718(a) of the PHS Act shall be designed to take into account 
the special circumstances of smaller plans, different types of plans, 
and newer plans. Specifically, HHS proposes to recognize the special 
circumstances of a different and newer type of plan for purposes of MLR 
reporting and calculations when that plan shares savings with consumers 
who choose lower-cost, higher-value providers. HHS proposes to revise 
45 CFR 158.221 to add a new paragraph (b)(9) to allow such shared 
savings, when offered by an issuer, to be factored into an issuer's MLR 
numerator calculation beginning with the 2020 MLR reporting year.

II. Overview of the Proposed Rules Regarding Transparency--the 
Departments of the Treasury, Labor, and Health and Human Services

    The Departments propose the price transparency requirements set 
forth in these proposed rules in new 26 CFR 54.9815-2715A, 29 CFR 
2590.715-2715A, and 45 CFR 147.210. Paragraph (a) of the proposed rules 
sets forth the scope and relevant definitions. Paragraph (b) of the 
proposed rules includes: (1) A requirement that group health plans and 
health insurance issuers in the individual and group markets disclose 
to participants, beneficiaries, or enrollees (or their authorized 
representatives) upon their request, through a self-service tool made 
available by the plan or issuer on an internet website, cost-sharing 
information for a covered item or service from a particular provider or 
providers, and (2) a requirement that plans and issuers make such 
information available in paper form. Paragraph (c) of the proposed 
rules would require that plans and issuers disclose to the public, 
through two machine-readable files, the negotiated

[[Page 65470]]

rates for in-network providers, and unique amounts a plan or issuer 
allowed for items or services furnished by out-of-network providers 
during a specified time period.
    The Departments request comments on all aspects of these proposed 
rules. In the preamble discussion that follows, the Departments also 
solicit comments on a number of specific issues related to the proposed 
rules where stakeholder feedback would be particularly useful in 
evaluating whether and how to issue final rules.
    Sections III and IV of this preamble include requests for 
information on topics closely related to this rulemaking. Due to the 
design and capability differences among the information technology 
systems of plans and issuers, as well as difficulties consumers 
experience in deciphering information relevant to health care and 
health insurance, the Departments seek comment on additional price 
transparency requirements that could supplement the proposed 
requirements of paragraphs (b) and (c) of these proposed rules. For 
example, in section III, the Departments seek comment on whether the 
Departments should require plans and issuers to disclose information 
necessary to calculate a participant's, beneficiary's, or enrollee's 
cost-sharing liability through a publicly-available, standards-based 
application programming interface (API).
    Section IV of this preamble requests comment on how existing 
quality data on health care provider items and services can be 
leveraged to complement the proposals in these proposed rules. Although 
these proposed rules do not include any health care quality disclosure 
requirements, the Departments appreciate the importance of health care 
quality information in providing consumers the information necessary to 
make value-based health care decisions.\42\
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    \42\ ``2017 Price Transparency & Physician Quality Report 
Card.'' Catalyst for Payment Reform. Available at: https://www.catalyze.org/product/2017-price-transparency-physician-quality-report-card/.
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A. Proposed Requirements for Disclosing Cost-Sharing Information to 
Participants, Beneficiaries, or Enrollees

    As described earlier in this preamble, the Departments' intention 
regarding these proposed rules is to enable participants, 
beneficiaries, and enrollees to obtain an estimate of their potential 
cost-sharing liability for covered items and services they might 
receive from a particular health care provider, consistent with the 
requirements of section 2715A of the PHS Act and section 1311(e)(3)(C) 
of PPACA. Accordingly, paragraph (b) of these proposed rules would 
require group health plans and health insurance issuers to disclose 
certain information relevant to a determination of a consumer's out-of-
pocket costs for a particular health care item or service in accordance 
with specific method and format requirements, upon the request of a 
participant, beneficiary, or enrollee (or his or her authorized 
representative).
1. Information Required To Be Disclosed to Participants, Beneficiaries, 
or Enrollees
    Based on significant research and stakeholder input, the 
Departments conclude that requiring group health plans and health 
insurance issuers to disclose to participants, beneficiaries, or 
enrollees cost-sharing information in the manner most familiar to them 
is the best means to empower individuals to understand their potential 
cost-sharing liability for covered items and services that might be 
furnished by particular providers. The Departments, therefore, modeled 
these proposed price transparency requirements on existing notices that 
plans and issuers generally provide to participants, beneficiaries, or 
enrollees after health care items and services have been furnished.
    Specifically, section 2719 of the PHS Act requires non-
grandfathered plans and issuers to provide a notice of adverse benefit 
determination \43\ (commonly referred to as an explanation of benefits 
(EOB)) to participants, beneficiaries, or enrollees after health care 
items or services are furnished and claims for benefits are 
adjudicated. EOBs typically include the amount billed by a provider for 
items and services, negotiated rates with in-network providers or 
allowed amounts for out-of-network providers, the amount the plan paid 
to the provider, and the individual's obligation for deductibles, 
copayments, coinsurance, and any other balance under the provider's 
bill. Consumers are accustomed to seeing cost-sharing information as it 
is presented in an EOB. This proposal similarly would require plans and 
issuers to provide the specific price and benefit information on which 
an individual's cost-sharing liability is based.
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    \43\ An adverse benefit determination means an adverse benefit 
determination as defined in 29 CFR 2560.503-1, as well as any 
rescission of coverage, as described in 29 CFR 2590.715-2712(a)(2) 
(whether or not, in connection with the rescission, there is an 
adverse effect on any particular benefit at that time). See 26 CFR 
54.9815-2719, 29 CFR 2590.715-2719 and 45 CFR 147.136. Plans subject 
to the requirements of ERISA (including grandfathered health plans) 
are also subject to a requirement to provide an adverse benefit 
determination under 29 CFR 2560.503-1.
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    The Departments have concluded that proposing to require plans and 
issuers to disclose to participants, beneficiaries, or enrollees price 
and benefit information that is analogous to the information that 
generally appears on an EOB would be the most effective and reasonable 
way to present cost-sharing information prior to the receipt of care, 
in a manner that can be understood by these individuals. Providing 
individuals with access to information generally included in EOBs 
before they receive covered items and services would enable individuals 
to understand their cost-sharing liability for the item or service and 
consider price when choosing a provider from whom to receive the item 
or service. Cost-sharing liability estimates would be required to be 
built upon accurate information, including actual negotiated rates, 
out-of-network allowed amounts, and individual-specific accumulated 
amounts. This does not mean the Departments would require that the 
estimate reflect the amount that is ultimately charged to a 
participant, beneficiary, or enrollee. Instead, the estimate would 
reflect the amount a participant, beneficiary, or enrollee would be 
expected to pay for the covered item or service for which cost-sharing 
information is sought. Thus, these proposed rules would not require the 
cost-sharing liability estimate to include costs for unanticipated 
items or services the individual could incur due to the severity of the 
his or her illness or injury, provider treatment decisions, or other 
unforeseen events.
    In designing this price transparency proposal, the Departments also 
considered stakeholder input regarding the importance of protecting 
proprietary information. As explained earlier in this preamble, all of 
the information that would be required to be disclosed under these 
proposed rules is currently disclosed in EOBs that plans and issuers 
provide to individuals as a matter of course after services have been 
furnished and payment has been adjudicated. Therefore, the Departments 
are of the view that the proposed requirement that plans and issuers 
disclose this same information, to the same parties, before services 
are rendered does not pose any greater risk to plan or issuer 
proprietary information.
    Consistent with how the information for an item or service would 
typically be presented on an EOB, the Departments propose to allow 
plans and issuers to provide participants, beneficiaries, and

[[Page 65471]]

enrollees with cost-sharing information for either a discrete item or 
service or for items or services for a treatment or procedure for which 
the plan bundles payment, according to how the plan or issuer 
structures payment for the item or service. Accordingly, these proposed 
rules set forth seven content elements that a plan or issuer must 
disclose, upon request, to a participant, beneficiary, or enrollee (or 
his or her authorized representative) for a covered item or service, to 
the extent relevant to the individual's cost-sharing liability for the 
item or service. These seven content elements generally reflect the 
same information that is included in an EOB after health care services 
are provided. The Departments have determined that each of the content 
elements is necessary and appropriate to implement the mandates of 
section 2715A of the PHS Act and section 1311(e)(3)(C) of PPACA by 
permitting individuals under a plan or coverage to learn the amount of 
their cost-sharing liability for specific items or services under a 
plan or coverage from a particular provider. The Departments propose 
that plans and issuers must satisfy these elements through disclosure 
of actual data relevant to an individual's cost-sharing liability that 
is accurate at the time the request is made. The Departments 
acknowledge that plans and issuers may not have processed all of an 
individual's outstanding claims when the individual requests the 
information; therefore, plans and issuers would not be required to 
account for outstanding claims that have not yet been processed.
    Furthermore, under these proposals, the cost-sharing information 
would need to be disclosed to the participant, beneficiary, or enrollee 
in plain language. The proposed rules define ``plain language'' to mean 
written and presented in a manner calculated to be understood by the 
average participant, beneficiary, or enrollee. Determining whether this 
standard has been satisfied requires an exercise of considered judgment 
and discretion, taking into account such factors as the level of 
comprehension and education of typical participants, beneficiaries, or 
enrollees in the plan or coverage and the complexity of the terms of 
the plan. Accounting for these factors would likely require limiting or 
eliminating the use of technical jargon and long, complex sentences, so 
that the information provided will not have the effect of misleading, 
misinforming, or failing to inform participants, beneficiaries, or 
enrollees.
a. First Content Element: Estimated Cost-Sharing Liability
    The first content element that plans and issuers would be required 
to disclose under these proposed rules would be an estimate of the 
cost-sharing liability for the furnishing of a covered item or service 
by a particular provider or providers. The calculation of the cost-
sharing liability estimate would be required to be computed based on 
the other relevant cost-sharing information that plans and issuers 
would be required to disclose, as described later in this section of 
the preamble.
    The proposed rules define ``cost-sharing liability'' to mean the 
amount a participant, beneficiary, or enrollee is responsible for 
paying for a covered item or service under the terms of the plan or 
coverage. Cost-sharing liability calculations must consider all 
applicable forms of cost sharing, including deductibles, coinsurance 
requirements, and copayments. The term cost-sharing liability does not 
include premiums, balance billing amounts for out-of-network providers, 
or the cost of non-covered items or services. For QHPs offered through 
Exchanges, an estimate of cost-sharing liability for a requested 
covered item or service provided must reflect any cost-sharing 
reductions the individual would receive under the coverage.
    The proposed rules define ``items or services'' to mean all 
encounters, procedures, medical tests, supplies, drugs, durable medical 
equipment, and fees (including facility fees), for which a provider 
charges a patient in connection with the provision of health care. This 
proposed definition of items or services is intended to be flexible 
enough to allow plans and issuers to disclose cost-sharing information 
for either discrete items or services for which an individual is 
seeking cost-sharing information, or, if the issuer bundles payment for 
items or services associated with a treatment or procedure, for a set 
of items or services included in the bundle. These proposed rules 
further define ``covered items or services'' to mean items or services 
for which the costs are payable, in whole or in part, under the terms 
of a plan or coverage. The Departments solicit comment on whether other 
types of information are necessary to provide an estimate of cost-
sharing liability prior to an individual's receipt of items or services 
from a provider or providers. The Departments also solicit comment on 
these definitions.
b. Second Content Element: Accumulated Amounts
    The second content element would be a participant's, beneficiary's, 
or enrollee's accumulated amounts. These proposed rules define 
``accumulated amounts'' to mean the amount of financial responsibility 
that a participant, beneficiary, or enrollee has incurred at the time 
the request for cost-sharing information is made, either with respect 
to a deductible or an out-of-pocket limit (such as the annual 
limitation on cost sharing provided in section 2707(b) of the PHS Act, 
as incorporated into ERISA and the Code, or a maximum out-of-pocket 
amount the plan or issuer establishes that is lower than the 
requirement under the PHS Act). In the case where an individual is 
enrolled in a family plan or coverage (or other-than-self-only 
coverage), these accumulated amounts would include the financial 
responsibility a participant, beneficiary, or enrollee has incurred 
toward meeting his or her individual deductible and/or out-of-pocket 
limit as well as the amount of financial responsibility that the 
individuals enrolled under the plan or coverage have incurred toward 
meeting the other-than-self-only coverage deductible and/or out-of-
pocket limit, as applicable.\44\ For this purpose, accumulated amounts 
would include any expense that counts toward the deductible or out-of-
pocket limit (such as copayments and coinsurance), but would exclude 
expenses that would not count toward a deductible or out-of-pocket 
limit (such as premium payments, out-of-pocket expenses for out-of-
network services, or amounts for items or services not covered under a 
plan or coverage).
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    \44\ The Departments read section 2707(b) as requiring non-
grandfathered group health plans to comply with the maximum annual 
limitation on cost sharing promulgated under section 1302(c)(1) of 
PPACA, including the HHS clarification that the self-only maximum 
annual limitation on cost sharing applies to each individual, 
regardless of whether the individual is enrolled in self-only 
coverage or in other-than-self-only coverage. Accordingly, the self-
only maximum annual limitation on cost sharing applies to an 
individual who is enrolled in family coverage or other coverage that 
is not self-only coverage under a group health plan. See 80 FR 
10749, 10824-10825 (Feb. 27, 2015); see also FAQs About Affordable 
Care Act Implementation (Part XXVII), Q1, available at https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/ACA-FAQs-Part-XXVII-MOOP-2706-FINAL.pdf and https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xxvii.pdf.
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    Furthermore, to the extent a plan or issuer imposes a cumulative 
treatment limitation on a particular covered item or service (such as a 
limit on the number of items, days, units, visits, or

[[Page 65472]]

hours covered in a defined time period) independent of individual 
medical necessity determinations, the accumulated amounts would also 
include the amount that has accrued toward the limit on the item or 
service (such as the number of items, days, units, visits, or hours the 
participant, beneficiary, or enrollee has used).
    The Departments understand that certain cumulative treatment 
limitations may vary by individual based on a determination of medical 
necessity and that it may not be reasonable for a plan or issuer to 
account for this variance as part of the accumulated amounts. 
Therefore, plans and issuers would be required to provide cost-sharing 
information with respect to an accumulated amount for a cumulative 
treatment limitation that reflects the status of the individual's 
progress toward meeting the limitation, and would not include any 
individual determination of medical necessity that may affect coverage 
for the item or service. For example, if the terms of an individual's 
plan or coverage limit coverage of physical therapy visits to 10 per 
plan or policy year, subject to a medical necessity determination, and 
at the time the request for cost-sharing information is made the 
individual has had claims paid for three physical therapy visits, the 
plan or coverage would make cost-sharing information disclosures based 
on the fact that the individual could be covered for seven more 
physical therapy visits in that plan or policy year, regardless of 
whether or not a determination of medical necessity has been made at 
that time.
c. Third Content Element: Negotiated Rate
    The third content element under these proposed rules would be the 
negotiated rate, reflected as a dollar amount, for an in-network 
provider or providers for a requested covered item or service, to the 
extent necessary to determine the participant's, beneficiary's, or 
enrollee's cost-sharing liability. These proposed rules define 
``negotiated rate'' to mean the amount a plan or issuer, or a third 
party (such as a third-party administrator (TPA)) on behalf of a plan 
or issuer, has contractually agreed to pay an in-network provider for a 
covered item or service pursuant to the terms of an agreement between 
the provider and the plan, issuer, or third party on behalf of a plan 
or issuer. The Departments understand that some provider contracts 
express negotiated rates as a formula (for example, 150 percent of the 
Medicare rate), but disclosure of formulas is not likely to be helpful 
or understandable for many participants, beneficiaries, and enrollees 
viewing this information. For this reason, these proposed rules would 
require disclosure of the rate that results from using such a formula, 
which would be required to be expressed as a dollar amount.
    Negotiated rates generally are an essential input for the 
calculation of a participant's, beneficiary's, or enrollee's cost-
sharing liability. For example, cost-sharing liability for a covered 
service with a 30 percent coinsurance requirement cannot be determined 
without knowing the negotiated rate of which an individual must pay 30 
percent. Additionally, if an individual has not met an applicable 
deductible and the cost for a covered item or service from an in-
network provider is less than the remaining deductible, then the cost-
sharing liability will in fact be the negotiated rate. The Departments 
acknowledge, however, that if the negotiated rate does not impact an 
individual's cost-sharing liability under a plan or coverage for a 
covered item or service (for example, the copayment for the item or 
service is a flat dollar amount or zero dollars and the individual has 
met a deductible, or a deductible does not apply to that particular 
item or service), disclosure of the negotiated rate may be unnecessary 
to calculate cost-sharing liability for that item or service. 
Therefore, the Departments propose that disclosure of a negotiated rate 
would not be required under these proposed rules if it is not relevant 
for calculating an individual's cost-sharing liability for a particular 
item or service. The Departments seek comment on whether there are any 
reasons disclosure of negotiated rates should nonetheless be required 
under these circumstances.
    Under these proposed rules, plans and issuers would be required to 
disclose to participants, beneficiaries, or enrollees an estimate of 
cost-sharing liability for items and services, including prescription 
drugs. This would allow individuals to request cost-sharing information 
for a specific billing code (as described later in this preamble) 
associated with a prescription drug or by descriptive term (such as the 
name of the prescription drug), which will permit individuals to learn 
the estimated cost of a prescription drug obtained directly through a 
provider, such as a pharmacy or mail order service. In addition to 
allowing individuals to obtain cost-sharing information by using a 
billing code or descriptive term, the rules would also permit 
individuals to learn the cost of a set of items or services that 
include a prescription drug or drugs that is subject to a bundled 
payment arrangement for a treatment or procedure. The proposed rules 
define the term ``bundled payment'' to mean a payment model under which 
a provider is paid a single payment for all covered items or services 
provided to a patient for a specific treatment or procedure. However, 
the Departments acknowledge that outside of a bundled payment 
arrangement, plans and issuers often base cost-sharing liability for 
prescription drugs on the undiscounted list price, such as the average 
wholesale price or wholesale acquisition cost, which frequently differs 
from the price the plan or issuer has negotiated for the prescription 
drug.\45\ In these instances, providing the individual with a rate that 
has been negotiated between the issuer or plan and its pharmacy benefit 
manager could be misleading, as this rate would reflect rebates and 
other discounts, and could be lower than what the individual would 
pay--particularly if the individual has not met his or her deductible. 
However, arguably, requiring the issuer to disclose only the rate upon 
which the individual's cost-sharing liability estimate is based would 
perpetuate the lack of transparency around drug pricing.
---------------------------------------------------------------------------

    \45\ ``Follow the Dollar: How the pharmaceutical distribution 
and payment system shapes the prices of brand medicines.'' PhRMA. 
November 2017. Available at https://www.phrma.org/report/follow-the-dollar-report.
---------------------------------------------------------------------------

    The Departments seek comment regarding whether a rate other than 
the negotiated rate, such as the undiscounted price, should be required 
to be disclosed for prescription drugs, and whether and how to account 
for any and all rebates, discounts, and dispensing fees to ensure 
individuals have access to meaningful cost-sharing liability estimates 
for prescription drugs. The Departments also solicit comment as to 
whether there are certain scenarios in which drug pricing information 
should not be included in an individual's estimated cost-sharing 
liability. For example, would the cost to an individual for a drug 
outside of a bundled payment arrangement be so impacted by factors 
beyond the negotiated rate for the drug, and not reasonably knowable by 
the plan or issuer, that the cost-sharing liability estimate for that 
drug would not be meaningful for the individual and should not be 
provided outside of a cost-sharing liability estimate for a bundled 
payment? Alternatively, should drug costs be required to be included in 
a cost-sharing liability estimate in all scenarios, including when the 
consumer

[[Page 65473]]

searches for cost-sharing information for a particular drug by billing 
code or descriptive term in connection with items and services for 
which the plan or issuer does not bundle payment? The Departments also 
seek comment on whether the relationship between plans or issuers and 
pharmacy benefit managers \46\ allows plans and issuers to disclose 
rate information for drugs, or if contracts between plans and issuers 
and pharmacy benefit managers would need to be amended to allow plans 
and issuers to provide a sufficient level of transparency. If those 
contracts would need to be amended, the Departments seek comment on the 
time that would be needed to make those changes.
---------------------------------------------------------------------------

    \46\ Pharmacy benefit managers are third-party companies that 
manage prescription drug benefits on behalf of health insurers, 
Medicare Part D drug plans, self-insured group health plans, and 
other payers.
---------------------------------------------------------------------------

d. Fourth Content Element: Out-of-Network Allowed Amount
    The fourth content element would be the out-of-network allowed 
amount for the requested covered item or service. This element would 
only be relevant when a participant, beneficiary, or enrollee requests 
cost-sharing information for a covered item or service furnished by an 
out-of-network provider. These proposed rules define ``out-of-network 
allowed amount'' to mean the maximum amount a plan or issuer would pay 
for a covered item or service furnished by an out-of-network provider. 
Under these proposed rules, plans and issuers would be required to 
disclose an estimate of cost-sharing liability for a participant, 
beneficiary, or enrollee. Therefore, when disclosing an estimate of 
cost-sharing liability for an out-of-network item or service, the plan 
or issuer would disclose the out-of-network allowed amount and any 
cost-sharing liability the participant, beneficiary, or enrollee would 
be responsible for paying. For instance, if a plan has established an 
out-of-network allowed amount of $100 for an item or service from a 
particular out-of-network provider and the participant, beneficiary, or 
enrollee is responsible for paying 30 percent of the out-of-network 
allowed amount ($30), the plan would disclose both the allowed amount 
($100) and the individual's cost-sharing liability ($30), indicating 
that the individual is responsible for 30 percent of the out-of-network 
allowed amount.
    Because the proposed definition of cost-sharing liability does not 
include amounts charged by out-of-network providers that exceed the 
out-of-network allowed amount, which participants, beneficiaries, or 
enrollees must pay (sometimes referred to as balance bills), it may be 
difficult for participants, beneficiaries, or enrollees to determine 
their likely out-of-pocket costs for covered items and services 
furnished by an out-of-network provider. Nonetheless, under section 
1311(e)(3)(A)(vii) of PPACA and section 2715A of the PHS Act, Congress 
intended that participants, beneficiaries, enrollees, and other members 
of the public have access to accurate and timely information on cost 
sharing and payments with respect to any out-of-network coverage. In 
the Departments' view, requiring plans and issuers to disclose out-of-
network allowed amounts and a participant's, beneficiary's, or 
enrollee's cost-sharing obligation for covered items and services is 
necessary and appropriate to fulfill this statutory mandate, and would 
give individuals information necessary to estimate their out-of-pocket 
costs if they request additional information from an out-of-network 
provider about how much the provider would charge for a particular item 
or service.
e. Fifth Content Element: Items and Services Content List
    The fifth content element would be a list of those covered items 
and services for which cost-sharing information is disclosed. This 
requirement would be relevant only when a participant, beneficiary, or 
enrollee requests cost-sharing information for an item or service that 
is subject to a bundled payment arrangement that includes multiple 
items or services, rather than one discrete item or service. This 
requirement would not apply when an individual requests cost-sharing 
information for an item or service not subject to a bundled payment 
arrangement. In cases in which an individual requests a cost-sharing 
liability estimate for a covered item or service that is subject to a 
bundled payment arrangement, plans and issuers would be required to 
disclose a list of each covered item and service included in the 
bundled payment arrangement and the individual's cost-sharing liability 
for those covered items and services as a bundle, but not a cost-
sharing liability estimate separately associated with each covered item 
or service included in the bundle. In the Departments' view, in order 
to support consumers' ability to shop for services, consumers need to 
know precisely what items and services are included in the cost-sharing 
information provided.
f. Sixth Content Element: Notice of Prerequisites to Coverage
    The sixth content element would be a notice, whenever applicable, 
informing the individual that a specific covered item or service for 
which the individual requests cost-sharing information may be subject 
to a prerequisite for coverage. The proposed rules define the term 
``prerequisite'' to mean certain requirements relating to medical 
management techniques for covered items and services that must be 
satisfied before a plan or issuer will cover the item or service. 
Specifically, prerequisites include concurrent review, prior 
authorization, and step-therapy or fail-first protocols. The definition 
of prerequisite in these proposed rules is intended to capture medical 
management techniques that apply to an item or service that require 
action by the participant, beneficiary, or enrollee before the plan or 
issuer will cover the item or service. Accordingly, the proposed 
definition of prerequisite does not include medical necessity 
determinations generally, or other forms of medical management 
techniques that do not require action by the participant, beneficiary, 
or enrollee. The Departments solicit comment on whether there are any 
additional medical management techniques that should be explicitly 
included as prerequisites in the final rules.
g. Seventh Content Element: Disclosure Notice
    The seventh and final content element would be a notice that 
communicates certain information in plain language and includes several 
specific disclosures. First, this notice would include a statement that 
out-of-network providers may bill participants, beneficiaries, or 
enrollees for the difference between providers' billed charges and the 
sum of the amount collected from the plan or issuer and the amount 
collected from the patient in the form of cost sharing (the difference 
often referred to as balance billing) and that these estimates do not 
account for those potential additional amounts. The Departments 
understand that there are numerous state laws that address balance-
billing practices such that the notice described in this proposed 
content element regarding balance bills may be misleading or inaccurate 
for beneficiaries, participants, or enrollees enrolled in a plan or 
coverage in certain states. The Departments request comment on whether 
any modifications to this content element would be appropriate to allow 
plans and issuers to accurately advise participants,

[[Page 65474]]

beneficiaries, or enrollees of their potential exposure to or 
protection from any balance bills.
    Second, the notice would be required to convey that actual charges 
for the participant's, beneficiary's, or enrollee's covered items and 
services may be different from those described in a cost-sharing 
liability estimate, depending on the actual items and services received 
at the point of care.
    Third, the notice would be required to include a statement that the 
estimated cost-sharing liability for a covered item or service is not a 
guarantee that coverage will be provided for those items and services.
    Finally, under these proposed rules, plans and issuers would be 
permitted to include any additional information, including other 
disclaimers that the plan or issuer determines appropriate, as long as 
the additional information does not conflict with the information 
required to be provided. Plans and issuers would be permitted to 
include additional language so long as the language could not 
reasonably be read to disclaim the plan's or issuer's responsibility 
for providing a participant, beneficiary, or enrollee with accurate 
cost-sharing information. For example, plans and issuers may choose to 
provide a disclaimer that informs consumers who are seeking estimates 
of cost-sharing liability for out-of-network allowed amounts that they 
may have to obtain a price estimate from the out-of-network provider in 
order to fully understand their out-of-pocket cost liability. Plans and 
issuers may also provide a disclaimer indicating how long the price 
estimate will be valid, based on the last date of the contract term for 
the negotiated rate or rates if multiple providers with different 
contract terms are involved. The Departments are of the view that this 
type of disclaimer could provide participants, beneficiaries, and 
enrollees with a better understanding of how their cost estimate may 
change over time, and seek comment on whether a disclaimer indicating 
the expiration of the cost estimate should be required. Furthermore, 
plans and issuers may also include disclaimer information regarding 
prescription drug cost estimates and whether rebates, discounts, and 
dispensing fees may impact the actual cost to the consumer.
    The Departments have developed model language that plans and 
issuers could use, but would not be required to use, to satisfy the 
disclosure notice requirements described above. This model language is 
being proposed contemporaneously with, but separate from, these 
proposed rules. The Departments seek comment on the proposed model 
language and any additional information that stakeholders believe 
should be included in the proposed model notice or any information that 
should be omitted from the proposed model notice. As noted later in the 
preamble, to obtain copies of the proposed model notice, please visit 
CMS's website at www.cms.hhs.gov/PaperworkReductionActof1995, or call 
the Reports Clearance Office at 410-786-1326. If you wish to comment, 
please submit your comments electronically as specified in the 
ADDRESSES section of these proposed rules and identify the rule (CMS-
9915-P), the ICR's CFR citation, CMS ID number, and OMB control number.
    The Departments further clarify that this proposed disclosure 
notice would be in addition to the information that QHP issuers are 
currently required to publish on their websites pursuant to 45 CFR 
156.220(a)(7) regarding cost sharing and payments with respect to out-
of-network coverage. In addition, some portions of this disclosure may 
overlap with network adequacy disclosure standards under 45 CFR 
156.230(e). That section requires QHP issuers to, notwithstanding 45 
CFR 156.130(c), count the cost sharing paid by an enrollee for an out-
of-network essential health benefit (EHB) provided by an out-of-network 
ancillary provider in an in-network setting toward the enrollee's 
annual limitation on cost sharing or provide a notice to the enrollee 
that additional costs may be incurred for an EHB, including balance 
billing charges.
    The Departments request comment on the proposed notice disclaimers 
and whether any additional disclaimers would be necessary or beneficial 
to consumers' learning about their potential cost-sharing liability for 
covered items and services. For example, should the Departments require 
a notice that explains that the cost-sharing information provided may 
not account for claims an individual has submitted that the plan or 
issuer has not yet processed?
    The Departments are also considering whether to require plans and 
issuers to provide a participant, beneficiary, or enrollee information 
regarding non-covered items or services for which the individual 
requests cost-sharing information. For example, there could be a 
requirement that a plan or issuer provide a statement, as applicable, 
indicating that the item or service for which the individual has 
requested cost-sharing information is not a covered benefit under the 
terms of the plan or coverage, and expenses charged for that item or 
service will not be reimbursed by the plan or coverage.
2. Required Methods for Disclosing Information to Participants, 
Beneficiaries, or Enrollees
    Section 1311(e)(3)(C) of PPACA requires that cost-sharing 
information be made available through an internet website and other 
means for individuals without access to the internet. Therefore, these 
proposed rules would require that group health plans and health 
insurance issuers disclose to participants, beneficiaries, or enrollees 
(or their authorized representatives) the cost-sharing information 
described earlier in this preamble in two ways: (1) Through a self-
service tool that meets certain standards and is available on an 
internet website, and (2) in paper form.
a. First Delivery Method: Internet-Based Self-Service Tool
    Under these proposed rules, plans and issuers would be required to 
make available a self-service tool on an internet website for their 
participants, beneficiaries, or enrollees to use, without a 
subscription or other fee, to search for cost-sharing information for 
covered items and services. The tool would be required to allow users 
to search for cost-sharing information for a covered item or service 
provided by a specific in-network provider, or by all in-network 
providers. The tool also would be required to allow users to search for 
the out-of-network allowed amount for a covered item or service 
provided by out-of-network providers. The tool would be required to 
provide users real-time responses that are based on cost-sharing 
information that is accurate at the time of the request.
    In order for plans and issuers to provide accurate cost-sharing 
information, the Departments understand that the participant, 
beneficiary, or enrollee will have to input certain data elements into 
the tool. Therefore, plans and issuers would be required to make 
available a tool that allows users to search for cost-sharing 
information: (1) By billing code (for example, CPT Code 87804) or, (2) 
by a descriptive term (for example, ``rapid flu test''), at the option 
of the user. The tool also would be required to allow users to input 
the name of a specific in-network provider in conjunction with a 
billing code or descriptive term, to produce cost-sharing information 
and a cost-sharing liability estimate for a covered item or service 
provided by that in-network provider. With respect to a request for 
cost-sharing information for all in-network providers, if a plan or 
issuer utilizes a multi-tiered network,

[[Page 65475]]

the tool would be required to produce the relevant cost-sharing 
information for the covered item or service for each tier. To the 
extent that cost-sharing information for a covered item or service 
under a plan or coverage varies based on factors other than the 
provider, the tool would also be required to allow users to input 
sufficient information for the plan or issuer to disclose meaningful 
cost-sharing information. For example, if the cost-sharing liability 
estimate for a prescription drug depends on the quantity and dosage of 
the drug, the tool would be required to allow the user to input a 
quantity and dosage for the drug for which he or she is seeking cost-
sharing information. Similarly, to the extent that the cost-sharing 
liability estimate varies based on the facility at which an in-network 
provider furnishes a service (for example, at an outpatient facility 
versus in a hospital setting), the tool would be required to either 
permit a user to select a facility, or display in the results cost-
sharing liability information for every in-network facility at which 
the in-network provider furnishes the specified item or service. The 
Departments request comment on whether there are any scenarios under 
which plans and issuers may not be able to ascertain the in-network 
facilities at which an in-network provider furnishes services.
    As stated previously, the Departments acknowledge that plans and 
issuers may not have sufficient information on providers outside of 
their network to provide the participant, beneficiary, or enrollee a 
complete estimate of out-of-pocket expenses, since the plan or issuer 
may not know what the out-of-network provider will bill for an item or 
service. However, if the plan or issuer provides coverage for out-of-
network items or services, the plan or issuer generally will have 
established an out-of-network allowed amount that the participant, 
beneficiary, or enrollee could use, in conjunction with information he 
or she may request from the out-of-network provider about what the 
total bill for services may be, to compute an estimate of his or her 
out-of-pocket expenses. It is the Departments' understanding that a 
plan or issuer may require certain information, in addition to the 
identification of a covered item or service, before it can provide an 
out-of-network allowed amount for a covered item or service, and that 
plans and issuers may have different ways of establishing an out-of-
network provider's allowed amount for a covered item or service (such 
as by zip code or state). Therefore, plans and issuers would be 
required to allow users to search for the out-of-network allowed amount 
for a covered item or service provided by out-of-network providers by 
inputting a billing code or descriptive term and the information that 
is necessary for the plan or issuer to produce the out-of-network 
allowed amount (such as the zip code for the location of the out-of-
network provider).
    To the extent a user's search returns multiple results, the tool 
would be required to have functionalities that would allow users to 
refine and reorder results (also referred to as sort and filter 
functionalities) by geographic proximity and the amount of estimated 
cost-sharing liability to the beneficiary, participant, or enrollee. 
The Departments solicit comment on whether the tool should be required 
to have additional refining and reordering functionality, including 
whether it would be helpful or feasible to refine and reorder by 
provider subspecialty (such as providers who specialize in pediatric 
psychiatry), or by the quality rating of the provider, if the plan or 
issuer has available data on provider quality.
    It is the Departments' intention that these proposed rules would 
require plans and issuers to create a user-friendly internet-based 
self-service tool, but these proposed rules do not include a definition 
for ``user-friendly'' since there are a variety of ways a tool can be 
designed to be user-friendly. The Departments want to preserve plan and 
issuer flexibility to create tools that are best for their 
participants, beneficiaries, or enrollees, by soliciting user feedback 
and consumer-testing in the development of their tools. However, it is 
the Departments' view that a user-friendly tool would mean a tool that 
allows intended users to search for the cost-sharing information 
outlined in paragraph (b)(1) of these proposed rules efficiently and 
effectively, without unnecessary effort. The Departments are of the 
view that plans and issuers can look to federal plain language 
guidelines,\47\ the requirements for a Summary Plan Description's 
method of presentation at 29 CFR 2520.102-2(a), and general industry 
standards for guidance when designing and developing their consumer 
tools. The Departments solicit comment on whether there is different or 
additional guidance that should be consulted.
---------------------------------------------------------------------------

    \47\ https://www.plainlanguage.gov/guidelines.
---------------------------------------------------------------------------

    These proposed rules require that the self-service tool be made 
available on an internet website to provide consistency with section 
1311(e)(3)(C) of PPACA, which uses the term ``internet website.'' 
However, the Departments seek feedback on whether this term should be 
interpreted to include other comparable methods of accessing internet-
based content. The statute was enacted in 2010 when the primary mode of 
accessing internet-based content was through a personal computer. Since 
that time, ownership of mobile devices with internet access and use of 
internet-based mobile applications has become much more common. The 
Departments acknowledge that there may be technical differences between 
a website and other methods of viewing internet-based content, such as 
mobile applications. However, the Departments also understand that 
technology evolves over time, and it is the Departments' view that 
Congress did not intend to limit the ability to access information via 
alternative methods of viewing internet-based content that may be 
available now or in the future.
    Mobile applications also may provide additional benefits beyond 
those of traditional websites. Due to the portability of mobile 
devices, a self-service tool that is similar to the kind required for 
an internet website under these proposed rules that is made available 
through a mobile application might provide participants, beneficiaries, 
enrollees, and their health care providers greater opportunities to use 
the tool together at the point of care to evaluate treatment options 
based on price. The Departments further understand that mobile 
applications may, in certain cases, offer greater privacy and security 
protections than an internet website for the information protected by 
applicable privacy and security requirements, such as the Health 
Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy 
Rules (45 CFR parts 160 and 164) (HIPAA Rules) that would be accessible 
through the proposed tool. Accordingly, the Departments seek comment on 
whether the final rules should permit the proposed disclosure 
requirements to be satisfied with a self-service tool that is made 
available through a website or comparable means of accessing the 
internet, such as a mobile application, or whether multiple means, such 
as websites and mobile applications, should be required. The 
Departments also seek comment on the relative resources required for 
building an internet website versus an internet-based mobile 
application.
b. Second Delivery Method: Paper Form
    With respect to a delivery method that would not require a 
participant, beneficiary, or enrollee (or his or her authorized 
representative) to have

[[Page 65476]]

access to the internet, plans and issuers would have to furnish, at the 
request of the of the participant, beneficiary, or enrollee (or his or 
her authorized representative), without a fee, all of the information 
required to be disclosed under paragraph (b)(1) of these proposed 
rules, as outlined earlier in this preamble, in paper form. A plan or 
issuer would be required to provide the information in accordance with 
the requirements under paragraph (b)(2)(i) of these proposed rules and 
as described earlier in this preamble. That is, the plan or issuer 
would be required to allow an individual to request cost-sharing 
information for a discrete covered item or service by billing code or 
descriptive term, according to the participant's, beneficiary's, or 
enrollee's request. Further, the plan or issuer would be required to 
provide cost-sharing information for a covered item or service in 
connection with an in-network provider or providers, or an out-of-
network allowed amount for a covered item or service provided by an 
out-of-network provider, according to the participant's, beneficiary's, 
or enrollee's request, permitting the individual to specify the 
information necessary for the plan or issuer to provide meaningful 
cost-sharing liability information (such as dosage for a prescription 
drug or zip code for an out-of-network allowed amount). To the extent 
the information the individual requests returns more than one result, 
the individual would also be permitted to request that the plan or 
issuer refine and reorder the information disclosed by geographic 
proximity and the amount of the cost-sharing liability estimates.
    This information would be required to be mailed to a participant, 
beneficiary, or enrollee no later than 2 business days after a 
participant's, beneficiary's, or enrollee's request is received. This 
would mean that cost-sharing information must be mailed via the U.S. 
Postal Service or some other delivery system within 2 business days of 
receipt of an individual's request. Nothing in these proposed rules 
prohibits a plan or issuer from providing individuals with the option 
to request disclosure of the information required under paragraph 
(b)(1) of these proposed rules through other methods (such as, over the 
phone, through face-to-face encounters, by facsimile, or by email).
    The Departments request comment on these proposed disclosure 
methods, including whether additional methods of providing information 
should be required, rather than permitted. The Departments are 
particularly interested in feedback on whether plans and issuers should 
be required to provide the information over the phone, or by email, at 
the request of a participant, beneficiary, or enrollee.
    The Departments also are considering requiring all plans and 
issuers to allow individuals to seek cost-sharing information by 
inputting a description of a treatment or procedure (such as knee 
replacement) that often involves the provision of multiple items and 
services. The Departments are interested in feedback on whether it 
would be feasible for plans and issuers to allow individuals to request 
cost-sharing information by such a treatment or procedure if the plan 
or issuer makes payments based on a discrete billing code for each item 
and service associated with a treatment or procedure, and not as a 
bundled payment for all items and services associated with the 
treatment or procedure. For instance, if an individual requests cost-
sharing information for a knee replacement, and the plan or issuer does 
not bundle payment for multiple items and services provided in 
connection with a knee replacement, would it be unduly burdensome for a 
plan or issuer to disclose meaningful cost-sharing information for 
items and services typically provided in connection with a knee 
replacement?
3. Special Rule To Prevent Unnecessary Duplication
    These proposed rules include a special rule to streamline the 
provision of the required disclosures and avoid unnecessary duplication 
of the disclosures with respect to group health coverage. The proposed 
special rule is similar to the one that applied with respect to the 
requirement for group health plans and health insurance issuers to 
provide certificates of creditable coverage before that requirement was 
generally superseded by PPACA.\48\
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    \48\ As of December 31, 2014, group health plans are generally 
no longer required to provide HIPAA certificates of creditable 
coverage. See 26 CFR 9801-5 and 29 CFR 2590.701-5. An exception to 
this general rule is expatriate health plans, which must satisfy the 
provisions of title XXVII of the PHS Act, Chapter 100 of the Code, 
and part 7 of subtitle B of title I of ERISA that would otherwise 
apply if PPACA had not been enacted. See section 3(d)(2)(G) of the 
Expatriate Health Coverage Clarification Act (EHCCA), enacted as 
Division M of the Consolidated and Further Continuing Appropriations 
Act of 2015.
---------------------------------------------------------------------------

    The special rule provides that to the extent coverage under a plan 
consists of group health insurance coverage, the plan would satisfy the 
requirements of these proposed rules if the issuer offering the 
coverage is required to provide the information pursuant to a written 
agreement between the plan and issuer. Accordingly, for example, if 
there were a plan and an issuer that enter into a written agreement 
under which the issuer agrees to provide the information required under 
these proposed rules, and the issuer failed to provide full or timely 
information, then the issuer, but not the plan, would violate the 
transparency disclosure requirements.\49\
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    \49\ Under section 4980D(d)(1) of the Code, the excise tax for 
group health plans failing to satisfy these proposed rules is not 
imposed on a small employer (generally fewer than 50 employees) 
which provides health insurance coverage solely through a contract 
with an issuer on any failure which is solely because of the health 
insurance coverage offered by the issuer.
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4. Privacy, Security, and Accessibility
    These proposed requirements for group health plans and health 
insurance issuers to provide cost-sharing liability estimates and 
related cost-sharing information would operate in tandem with existing 
state and federal laws governing the privacy, security, and 
accessibility of the information that would be disclosed under these 
proposed disclosure requirements. For example, the Departments are 
aware that the content proposed to be disclosed by plans and issuers 
may be subject to the privacy, security, and breach notification rules 
under HIPAA or similar state laws in the hands of a HIPAA covered 
entity or business associate. Nothing in these proposed rules is 
intended to alter or otherwise affect plans' and issuers' data privacy 
and security responsibilities under HIPAA Rules or other applicable 
state or federal laws.
    The Departments also expect that plans and issuers will follow 
existing applicable state and federal laws regarding persons who must 
be allowed to access and receive the information that would be 
disclosed under these proposed rules. These proposed rules refer to 
such persons as ``authorized representatives'' and do not establish any 
new class of persons or entities who are authorized to access the 
information that would be provided through the proposed internet-based, 
self-service tool. Accordingly, the Departments expect plans and 
issuers to follow existing laws with regard to persons who may or must 
be allowed to access the cost-sharing information that would be 
required to be disclosed under these proposed rules.

[[Page 65477]]

B. Proposed Requirements for Public Disclosure of Negotiated Rates and 
Historical Allowed Amount Data for Covered Items and Services From Out-
of-Network Providers

    The Departments take the position that health care spending cannot 
be curbed without more competition in the market, and competition 
cannot be achieved without greater price transparency. As explained 
earlier in this preamble, section 2715A of the PHS Act and section 
1311(e)(3)(A) of PPACA require group health plans and health insurance 
issuers to make public certain specified information, as well as other 
information the Secretary of HHS determines to be appropriate to 
provide transparency in health coverage. Thus, these provisions 
evidence Congress' intent that members of the public play a role in 
using health coverage transparency information to promote consumer 
interests. Consistent with this authority, the Departments have 
determined that it would be appropriate to require plans and issuers to 
make public negotiated rates with in-network providers and data 
outlining the different amounts a plan or issuer has allowed for 
covered items or services furnished by out-of-network providers.
    The Departments have concluded that public availability of such 
information would create price transparency for persons who are 
uninsured, as well as insured persons who are considering coverage 
alternatives. The proposal would also support meaningful comparisons 
between plan coverage options and issuer options for all consumers, 
comparisons that would not be supported through the internet-based 
consumer tool proposed earlier in this rule. In proposing requirements 
for public disclosure of negotiated rates and historical out-of-network 
allowed amounts, the Departments are exercising specific authority 
under section 1311(e)(3)(A)(vii) and (ix) of PPACA (as applied to plans 
and issuers in the individual and group markets through section 2715A 
of the PHS Act), which requires plans and issuers to disclose other 
information the Secretary of HHS determines to be appropriate to create 
transparency in health coverage.
    As explained later in this preamble, the proposed disclosure 
requirements would provide consumers, including third-party software 
developers and health care researchers, information about health care 
prices that is necessary to make informed health care purchasing 
decisions. These requirements would also help to expose price 
differences so that consumers can judge the reasonableness of provider 
prices and shop for care at the best price. Accordingly, it is the 
Departments' view that public availability of negotiated rates and 
historical out-of-network allowed amounts is appropriate and necessary 
to empower consumers to make informed decisions about their health 
care, spur competition in health care markets, and to slow or 
potentially reverse the rising cost of health care items and services.
1. Public Disclosure of Negotiated Rates and Historical Out-of-Network 
Allowed Amounts Is Necessary To Create Price Transparency for All 
Consumers and Payers of Health Care Items and Services, as Well as of 
Benefit to State and Federal Regulators
    First, public availability of negotiated rates and historical out-
of-network allowed amounts would empower the nation's 28.5 million 
uninsured consumers \50\ to make more informed health care decisions. 
Uninsured consumers often must pay full cost for health care items and 
services, such that pricing information is critical to their ability to 
evaluate their service options and control their health care spending. 
Uninsured consumers could use publicly-available pricing information to 
find affordable service providers or providers who offer the lowest 
price, depending on the consumer's personal needs and priorities. 
Provider lists of standard charges often do not reflect the true cost 
of particular items and services.\51\ Although a provider's negotiated 
rates with group health plans and health insurance issuers do not 
necessarily reflect the prices providers charge to uninsured patients, 
uninsured consumers could use this information to gain an understanding 
of the payment amounts a particular provider accepts for a service, 
which could inform their own negotiations with that provider for the 
same item or service.
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    \50\ Keith, K. ``Two New Federal Surveys Show Stable Uninsured 
Rate.'' Health Affairs Blog. September 13, 2018. Available at: 
https://www.healthaffairs.org/do/10.1377/hblog20180913.896261/full/.
    \51\ Arora, V., Moriates, C., Shah, N. ``The Challenge of 
Understanding Health Care Costs and Charges.''17 AMA J. Ethics. 
1046. November 2015. Available at: https://journalofethics.ama-assn.org/article/challenge-understanding-health-care-costs-and-charges/2015-11.
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    Second, information on negotiated rates and historical out-of-
network allowed amounts is critical for any consumer, insured or 
uninsured, who wishes to evaluate available options for group or 
individual market coverage. The proposed requirements that plans and 
issuers disclose negotiated rates and out-of-network allowed amounts to 
their participants, beneficiaries, or enrollees (or their authorized 
representatives) through an internet self-service tool or in paper form 
will make critical pricing information available to consumers with 
health insurance coverage. However, the Departments are of the view 
that both insured and uninsured consumers need access to data on 
negotiated rates and out-of-network allowed amounts across plans and 
issuers to be able to shop most effectively for their health care 
coverage.
    Public disclosure of plan and issuer negotiated rates and out-of-
network allowed amounts would create and promote price transparency in 
the health care market for all consumers and payers, including insured 
consumers, uninsured consumers, sponsors of self-insured and fully-
insured group health plans, as well as government sponsors and 
regulators of local, state, and federal health care programs. For any 
consumer, insured or uninsured, who wishes to evaluate available 
options for group or individual market coverage, pricing information is 
also essential.
    Specifically, for those uninsured consumers who wish to purchase 
coverage and become insured, pricing information for different plans or 
coverage and their in-network providers would be key to consumers' 
ability to effectively shop for coverage that best meets their needs at 
prices they can afford. The same is true for insured or uninsured 
consumers who wish to evaluate coverage options under their employer's 
plan or shop for coverage in the individual market. Publicly-available 
negotiated rate data will assist all consumers in choosing the coverage 
that best meets their needs in terms of deductible requirements, 
coinsurance requirements, and maximum out-of-pocket limits--all factors 
directly determined by a plan's or issuer's negotiated rates or out-of-
network allowed amounts. Publicly-available historical allowed amount 
data for covered items and services provided by out-of-network 
providers would enable consumers who require specialized services to 
find the best coverage for their circumstances. For instance, the 
Departments understand that plans and issuers often place limitations 
on benefits for specialized services. This causes many specialists to 
reject insurance, making it difficult, if not impossible, for consumers 
to find in-network providers in their area who are accepting new 
patients or who have sufficient availability or expertise to meet their 
needs. The Departments understand, for example, that many speech 
therapists and pathologists do not accept insurance because of the

[[Page 65478]]

limitations plans and issuers place on coverage for their services. 
Such limitations may include exclusions from coverage for speech issues 
that are developmental in nature, and are not due to a specific illness 
or injury.\52\ Moreover, many plans and issuers that do provide 
coverage for developmental speech issues place annual visit limits on 
speech therapy services. Accordingly, consumers who have a need for 
such specialized services often base their coverage choices primarily, 
if not solely, on a plan's or issuer's out-of-network benefits. 
Historical data outlining different amounts paid to out-of-network 
providers will enable consumers who rely on out-of-network providers to 
compare out-of-network benefits among different plans and issuers.
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    \52\ https://www.asha.org/practice/reimbursement/private-plans/PrivatePlansCoverageSLP/.
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    Third, public disclosure of pricing information is necessary to 
enable consumers to use and understand price transparency data in a 
manner that will increase competition, reduce disparities in health 
care prices, and potentially lower health care costs. The Departments 
are of the view that true downward pressure on health care pricing 
cannot be fully achieved without public disclosure of pricing. General 
economic theory holds that markets work best when there is price 
competition.\53\ When consumers can shop for services and items based 
on price, providers and suppliers compete to lower price and improve 
quality.\54\
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    \53\ https://www.consumer.ftc.gov/sites/default/files/games/off-site/youarehere/pages/pdf/FTC-Competition_How-Comp-Works.pdf.
    \54\ Kessler, D., McClellan, M. ``Is Hospital Competition 
Socially Wasteful?'' 115 Q. J. of Econ. 577. May 2, 2000. Available 
at: https://www.nber.org/papers/w7266.
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    One of the recognized impediments to increased competition through 
health care consumerism is widespread knowledge gaps most consumers 
have when it comes to evaluating health care options. Making this 
information public would facilitate and incentivize the design, 
development, and offering of consumer tools and support services that 
are necessary to address the general inability of consumers to use or 
otherwise make sense of health care pricing information. The 
Departments' proposal to make this information publicly available would 
allow health care software application developers and other innovators 
to compile, consolidate, and present this information to consumers in a 
manner that supports meaningful comparisons between different coverage 
options and providers, and that assists consumers in making informed 
health care and coverage decisions.\55\ One of the primary purposes of 
these proposals to make price information publicly available is to put 
price information in the hands of those best equipped to use it in a 
manner that will support greater consumerism in the health care market 
(for example, information technology developers who build tools to help 
consumers make informed health care decisions).
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    \55\ The Departments recognize that implementation of the API 
discussed in Section III, Request for Information, could go further 
toward the goal of empowering application developers and other 
innovators to support price transparency in the health care market.
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    In developing these proposed rules, the Departments considered 
that, due to the complexity of our health care system and the data that 
drives plan and issuer payments for health care services, such data is 
unlikely to be usable by the average consumer. Put plainly, consumers 
would not (or could not) effectively use pricing information they do 
not understand or cannot decipher. The Departments understand many 
consumers do not fully comprehend the basics of health coverage, much 
less the more complex facets of our health care system that can affect 
an individual's out-of-pocket cost for items and services, including 
its specialized billing codes and payment processes; the various 
specialized terms used in plan and coverage contracts and related 
documents (such as copayment and coinsurance); and the various billing 
and payment structures plans and issuers use to compensate providers 
and assign cost-sharing liability to individuals (bundled payment 
arrangements, for example).\56\ As a result, the Departments have 
determined that the proposal to make public negotiated rates with in-
network providers and historical payment data outlining out-of-network 
allowed amounts is appropriate because it would encourage innovation 
that could help consumers understand and effectively use price 
transparency information. The more consumers use transparent price data 
effectively to find quality services they need at the best available 
prices, the greater the rise in consumerism and competition, as well as 
downward pressure on the costs of health care items and services.
---------------------------------------------------------------------------

    \56\ See https://www.benefitspro.com/2016/09/30/survey-most-workers-dont-understand-health-insuran/?slreturn=20190803010341 (a 
UnitedHealthcare Consumer Sentiment Survey found that even though 32 
percent of respondents were using websites and mobile apps to 
comparison shop for health care, only 7 percent had a full 
understanding of all four basic insurance concepts: Plan premium, 
deductible, coinsurance, and out-of-pocket maximum; although 60 
percent of respondents were able to successfully define plan premium 
and deductible, respondents were not as successful in defining out-
of-pocket maximum (36 percent) and coinsurance (32 percent)).
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    The Departments assume that market actors will be incentivized to 
innovate in the price transparency and health care consumerism space, 
once access to pricing information that allows for meaningful 
evaluation of different options for delivering health care items or 
services, coverage options, and provider options becomes available. The 
Departments further assume that technology developers will be 
incentivized to design and make available web tools and mobile 
applications that can guide consumers in accessing available price 
information, increasing the likelihood that consumers will use the 
information to make informed health care purchasing decisions. 
Ultimately, improved access and usability of this information has the 
potential to increase health insurance literacy, consumerism, and 
competition, resulting in more reasonable, controlled costs for health 
care items and services. Additionally, the information would provide 
industry researchers and experts with baseline data to assist them with 
identifying, designing, and testing new or existing health care 
delivery and coverage models.
    Fourth, along with consumers, sponsors of self-insured and fully-
insured group health plans are also disadvantaged by the lack of price 
transparency. Group health plans bear the increasing cost of their 
participants' and beneficiaries' health care. Without information 
related to what other plans or issuers are actually paying for 
particular items and services, plans currently lack the pricing 
information necessary to shop or effectively negotiate for the best 
coverage for their participants and beneficiaries. Public availability 
of pricing information is appropriate to empower plans to make 
meaningful comparisons between offers from issuers and evaluate the 
prices offered by providers who wish to be included in their pool of 
in-network providers. The pricing information will also assist plans 
that contract with TPAs or issuers to provide a network of physicians. 
That information would provide valuable data a plan could use to assess 
the reasonableness of network access prices offered by TPAs and issuers 
by evaluating the specific prices members of a TPA's or issuer's 
network are accepting for their services. Given that, as of 2017, more 
than 55 percent of the nation's population received

[[Page 65479]]

coverage from their employers,\57\ the ability of group health plans to 
effectively negotiate pricing for coverage and services would be a boon 
to competition in the health care market.
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    \57\ As of 2017, employer-based coverage was the most common, 
covering 56.0 percent of the population for some or all of the 
calendar year. Berchick, E., Hood, E. Barnett, J. ``Health Insurance 
Coverage in the United States: 2017.'' U.S. Government Printing 
Office. September 2018. Available at: https://www.census.gov/content/dam/Census/library/publications/2018/demo/p60-264.pdf.
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    Fifth, public disclosure of price transparency information is also 
appropriate because it would assist health care regulators in carrying 
out their duties to oversee health insurance issuers in their states, 
as well as in designing and maintaining sustainable health care 
programs. Public disclosure of pricing information would enable state 
regulators to monitor actual trends in prices for health care items and 
services. States would be able to assess whether the trend rates 
issuers use in their rate filings are reasonable in order to assess 
whether the rates should be approved. Local, state, and federal 
agencies responsible for implementing health care programs that rely on 
issuers to provide access to care would be privy to actual pricing 
information that would inform their price negotiations with issuers. 
The Departments understand, however, that some government agencies may 
already have access to the information proposed to be made public. The 
Departments, thus, are specifically interested in comments from 
government stakeholders regarding whether and how the price 
transparency proposed to be created under these proposed rules would 
benefit government regulators and health care programs.
    For these reasons, the Departments propose, in paragraph (c), to 
require plans and issuers to make available two machine-readable files 
(as defined later in this preamble) that include information regarding 
negotiated rates with in-network providers, allowed amounts for covered 
items or services furnished by particular out-of-network providers, and 
other relevant information as defined in accordance with specific 
method and format requirements. These proposed rules would also require 
plans and issuers to update this information on a monthly basis to 
ensure it remains accurate.
2. Information Required To Be Disclosed to the Public
    The Departments are of the view that minimum requirements for 
standardized data elements would be necessary to ensure users would 
have access to accurate and useful pricing information. Without such 
baseline requirements, the negotiated rate and allowed amount data for 
out-of-network services made available by each group health plan and 
health insurance issuer could vary dramatically, creating a 
disincentive to health care innovators developing tools and resources 
to enable consumers to accurately and meaningfully use, understand, and 
compare pricing information for covered items and services across 
providers, plans, and issuers. Accordingly, under these proposed rules 
a plan or issuer would be required to publish two machine-readable 
files. The first file would include information regarding rates 
negotiated with in-network providers. The second file would include 
historical data showing allowed amounts for covered items and services 
furnished by out-of-network providers. For convenience, these are 
respectively referred to as the Negotiated Rate File and the Allowed 
Amount File in this preamble. The files would include the following 
content elements.
a. First Content Element: Name or Identifier for Each Plan Option or 
Coverage
    The first content element that plans and issuers would be required 
to include in both the Negotiated Rate File and the Allowed Amount File 
would be the name and identifier for each plan option or coverage 
offered by a plan or issuer. For the identifier, the Departments 
propose that plans and issuers use their Employer Identification Number 
(EIN) or Health Insurance Oversight System (HIOS) IDs, as applicable. 
The Departments seek comment on whether EINs and HIOS IDs are the 
appropriate identifiers for this purpose. The Departments also seek 
comment on whether there are other plan or issuer identifiers that 
should be considered and adopted.
b. Second Content Element: Billing Codes
    The second content element that plans and issuers would be required 
to include in both files would be any billing or other code used by the 
plan or issuer to identify items or services for purposes of claims 
adjudication, or accounting or billing for the item or service, 
including but not limited to, the Current Procedural Terminology (CPT) 
code, the Healthcare Common Procedure Coding System (HCPCS) code, the 
Diagnosis Related Group (DRG), the National Drug Code (NDC), or other 
common payer identifier used by a plan or issuer, such as hospital 
revenue codes, as applicable.
    The Departments propose to require that plans and issuers associate 
each negotiated rate or out-of-network allowed amount with a CPT or 
HCPCS code, DRG, NDC, or other common payer identifier, as applicable, 
because plans, issuers, and providers uniformly understand them and 
commonly use them for billing and paying claims (including for both 
individual items and services and service packages). The Departments 
also propose that plans and issuers must include plain language 
descriptions for each billing code. In the case of items and services 
that are associated with common billing codes (such as the HCPCS 
codes), the plan or issuer could use the codes' associated short text 
description.
c. Third Content Element: Negotiated Rates or Out-of-Network Allowed 
Amounts
Negotiated Rate File
    The third content element that plans and issuers would be required 
to include in the Negotiated Rate File would be negotiated rates under 
a plan or coverage with respect to each covered item or service 
furnished by in-network providers. To the extent a plan or issuer 
reimburses providers for an item or service based on a formula or 
reference based-pricing (such as a percentage of a Medicare 
reimbursement rate), the plan or issuer would be required to provide 
the calculated dollar amount of the negotiated rate for each provider. 
Negotiated rates would have to be associated with the provider's 
National Provider Identifier (NPI), which is accessible by providers, 
plans, and issuers.
    The Departments understand that some plans and issuers do not vary 
negotiated rates across in-network providers. For instance, some plans 
and issuers have a negotiated rate that applies to every provider in a 
certain network tier. In such a case, the plan or issuer must provide 
the negotiated rate for a covered item or service separately for every 
provider that participates in that tier of the network. If the plan or 
issuer reimburses for certain items and services (for example, 
maternity care and childbirth) through a bundled payment arrangement, 
the plan must identify the bundle of items and services by the relevant 
code.
    Plans and issuers would also be required to include in the 
Negotiated Rate File the last date of the contract term for each 
provider-specific negotiated rate that applies to each item or service 
(including rates for both

[[Page 65480]]

individual and bundled items and services).
Allowed Amount File
    The third content element plans and issuers would be required to 
include in the Allowed Amount File would be historical out-of-network 
allowed amounts for covered items and services. These proposed rules 
would require plans and issuers to include in the Allowed Amount File 
each unique out-of-network allowed amount in connection with covered 
items or services furnished by a particular out-of-network provider 
during the 90-day time period that begins 180 days prior to the 
publication date of the Allowed Amount File. As with the Negotiated 
Rate File, where a plan or issuer reimburses providers for an item or 
service based on a formula or reference based-pricing (such as a 
percentage of a Medicare reimbursement rate), the plan or issuer would 
be required to provide the calculated dollar amount of the allowed 
amount for each provider. Allowed amounts would have to be associated 
with the provider's NPI, which is accessible by providers, plans, and 
issuers.
    When disclosing an out-of-network allowed amount under this 
requirement, the plan or issuer would disclose the aggregate of the 
actual amount the plan or issuer paid to the out-of-network provider, 
plus the participant's, beneficiary's, or enrollee's share of the cost. 
For instance, if the out-of-network allowed amount for a covered 
service is $100, and the plan or issuer paid 80 percent of the out-of-
network allowed amount ($80) per the terms of the plan or coverage, the 
participant, beneficiary, or enrollee was responsible for paying twenty 
percent of the out-of-network allowed amount ($20), the plan or issuer 
would report an out-of-network allowed amount of $100. This unique 
payment amount would be associated with the particular covered item or 
service (identified by billing code) and the particular out-of-network 
provider who furnished the item or service (identified by NPI).
    As an example, assume Group Health Plan A intends to publish a 
machine-readable file on July 1 reporting the out-of-network historical 
allowed amount data the Departments propose to require. Under these 
proposed requirements, Group Health Plan A's Allowed Amount File must 
detail each discrete out-of-network allowed amount the plan calculated 
in connection with a covered item or service furnished by an out-of-
network provider between January 1 and April 1. During this 90-day time 
period, Group Health Plan A paid 23 claims from Provider Z seeking 
compensation for rapid flu tests (CPT Code 87804), a service covered 
under the group health plan. Group Health Plan A calculated out-of-
network allowed amounts of $100 for three claims, $150 for 10 claims, 
and $200 for the remaining 10 claims. Under these proposed rules, Group 
Health Plan A would report in the file published on June 30, that it 
calculated three different out-of-network allowed amounts of $100, 
$150, and $200 for rapid flu tests (CPT Code 87804) in connection with 
covered services furnished by Provider Z from January 1 to April 1. On 
July 30, Group Health Plan A would update the file to show the unique 
out-of-network allowed amounts for CPT Code 87804 for Provider Z's 
services rendered from February through April. On August 30, Group 
Health Plan A would update the file to show such payments for services 
rendered from March through May, and so on.
    The Departments specifically seek comment on whether the required 
disclosures of historical out-of-network allowed amounts will provide 
useful information that can assist consumers in locating services at an 
affordable cost, or whether there is additional information that is 
both useful to anticipated users and practical for plans and issuers to 
disclose for this purpose. For instance, the Departments considered 
requiring plans and issuers to disclose in the Allowed Amount File 
amounts out-of-network providers charged participants, beneficiaries, 
and enrollees for covered services. We understand that such charge 
amounts would be included in any claim for out-of-network benefits and 
could be helpful to consumers shopping for services based on price. We 
seek comment on this data element and other information that would 
support the transparency goals of these proposed rules.
    The Departments designed this reporting requirement to elicit 
payment data that reflects recent out-of-network allowed amounts in 
connection with claims for out-of-network covered services. The 
Departments assume these amounts will provide payment data that is 
useful to consumers because it is reflective of current reimbursements. 
Specifically, the Departments propose to require reporting based on 
dates of service within 180 days of the Allowed Amount File publication 
date to ensure that data is composed of recent claims (rather than 
older claims from multiple time periods) and to avoid the reporting of 
payments from different periods of time. Payment data from defined 
periods of time will enable users to make meaningful comparisons across 
plans and coverage options.
    The 90-day reporting period ensures that the public has access to 
reasonable volumes of payment data from which users can make useful and 
accurate inferences about how much a service would cost if furnished by 
a particular provider. The Departments are concerned, however, that 
out-of-network providers may not provide services to participants, 
beneficiaries, or enrollees on a sufficiently frequent basis during a 
90-day period to yield a useful amount of payment data. The Departments 
seek comment generally on these issues and on whether the Departments 
should require that reporting of out-of-network allowed amounts cover a 
longer period of time, such as 120 days, 180 days, or more.
    Similarly, the Departments propose to require plans and issuers to 
report out-of-network allowed amounts for services furnished at least 
90 days in the past to help ensure the availability of reasonable 
volumes of out-of-network allowed amount data in the machine-readable 
file. The Departments are of the view that a 90-day lag between the end 
of a reporting period and the publication of required out-of-network 
allowed amount data will allow plans and issuers sufficient time to 
adjudicate and pay claims from out-of-network providers for the 
relevant reporting period. The Departments also understand, however, 
that claims processing times may vary between plans and issuers, and 
that external factors may increase processing timelines. For example, 
the Departments understand that many out-of-network providers do not 
send claims directly to plans and issuers, but require patients to file 
out-of-network claims. This could mean that an out-of-network claim may 
not reach a plan or issuer for 6 to 12 months after a service is 
rendered. Such delays could negatively affect the volume of out-of-
network allowed amount data and the ultimate usefulness of this data. 
For this reason, the Departments seek comment on whether requiring 
plans and issuers to report out-of-network allowed amounts for items 
and services furnished at least 90 days in the past is sufficient to 
ensure the proposed disclosures will yield sufficient volumes of 
historical data to be useful to consumers who wish to shop for services 
based on price. For instance, the Departments seek comment on whether 
the Departments should require that more time elapses between the end 
of the reporting period and publication of the data, such as 120 days, 
180 days, or more, to increase the likelihood that out-of-network 
claims

[[Page 65481]]

from the relevant reporting period have been adjudicated and paid by 
the time they must be published.
    The Departments are aware that providing this information could 
raise health privacy concerns. For example, there may be instances 
(such as in a small group health plan or with respect to an item or 
service for a rare chronic condition) where, through deduction, 
disclosing the required payment information may enable users to 
identify the patient who received the service. There may also be 
instances when this public disclosure requirement would be inconsistent 
with federal or state laws governing health information that are more 
stringent than HIPAA Rules with regard to the use, disclosure, and 
security of health data that was produced pursuant to a legal 
requirement, such that plans and issuers would be required to further 
de-identify data to the extent a patient could be identified through 
deduction. For example, some of the claims for payment from an out-of-
network provider could relate to services provided for substance use 
disorder, which could implicate disclosure limitations under 42 CFR 
part 2 governing the confidentiality of substance use disorder patient 
records. Thus, some of the out-of-network allowed amounts that the 
Departments propose to make public could be subject to disclosure rules 
and limitations under 42 CFR part 2.
    To address privacy concerns, the Departments propose that plans and 
issuers would not be required to provide out-of-network allowed amount 
data in relation to a particular provider and a particular item or 
service when compliance would require a plan or issuer to report out-
of-network allowed amounts to a particular provider in connection with 
fewer than 10 different claims for payment. Furthermore, the 
Departments note that disclosure of such information would not be 
required if compliance would violate applicable health information 
privacy laws. The Departments are committed to protecting sensitive 
patient health information. For this reason, in addition to proposing 
this exemption, the Departments propose under paragraph (c)(1)(ii) to 
require only unique out-of-network allowed amounts to mask the total 
episodes of care for a particular provider and item or service. The 
Departments believe these mitigation strategies, in addition to 
flexibilities proposed to allow the aggregation of reported data (as 
described later in this preamble), are sufficient to protect patients 
from identification based on information in the Allowed Amount File. 
The Departments solicit comment on whether additional privacy 
protections are required.
    The Departments specifically solicit comment on whether a higher 
minimum claims threshold, such as a threshold of 20 claims, would 
better mitigate privacy concerns and minimize complexity in complying 
with federal or state privacy laws without compromising the integrity 
of the compiled information. The Departments also seek comment on 
additional approaches that could decrease the potential for aggregated 
health information that would be disclosed under these proposed rules 
to be identified, especially with respect to smaller group health 
plans.
3. Required Method and Format for Disclosing Information to the Public
    The Negotiated Rate and Allowed Amounts Files would be required to 
be disclosed as machine-readable files. These proposed rules define 
``machine-readable file'' to mean a digital representation of data or 
information in a file that can be imported or read by a computer system 
for further processing without human intervention, while ensuring no 
semantic meaning is lost. This means that the machine-readable file can 
be imported or read by a computer system without those processes 
resulting in alterations to the ways the data and the commands are 
presented in the machine-readable file. These proposed rules would 
require each machine-readable file to use a non-proprietary, open 
format to be identified by the Departments in technical implementation 
guidance (for example, JSON, XML, CSV). A PDF file, for example, would 
not meet this definition due to its proprietary nature.
    The Departments considered proposing that group health plans and 
health insurance issuers post negotiated rates and historical out-of-
network allowed amount data for all covered items and services using a 
single standardized, non-proprietary file format, specifically JSON. 
The Departments understand that this format generally is easily 
downloadable, and it could simplify the ability of price transparency 
tool developers to access the data. The Departments seek comment on 
whether the final rule should require group health plans and health 
insurance issuers to make the Negotiated Rate and Allowed Amounts Files 
available as JSON files.
    These machine-readable files would also be required to comply with 
technical, non-substantive implementation guidance to be published 
following the finalization of these proposed rules. The guidance will 
provide technical direction that identifies the specific open, non-
proprietary file format in which plans and issuers should produce the 
machine-readable files. It will, among other things, provide the schema 
for the file, which is a description of the manner in which the data 
should be organized and arranged. The guidance would ensure consistent 
implementation of the machine-readable file requirements across all 
plans and issuers, and would ensure stability, predictability, and 
reliability for users of the proposed machine-readable file.
    The Departments believe that providing such specific technical 
direction in separate guidance, rather than in this rule, would better 
enable the Departments to update these specific requirements to keep 
pace with and respond to technological developments. The Departments 
will publish a PRA package that will further describe the specific data 
elements that would be disclosed in the proposed machine-readable 
files.
    The Departments propose to require plans and issuers to publish 
their negotiated rates and historical allowed amount data in two 
machine-readable files, one reporting required negotiated rate data 
with in-network providers, and a second reporting required out-of-
network allowed amount data. The Departments considered allowing plans 
and issuers to have flexibility to publish this information in either 
one or two machine-readable files. The Departments solicit comment on 
whether building and updating one file could be less burdensome for 
plans and issuers than maintaining multiple files, and whether having 
the data in a single file could facilitate use by market innovators.
    The Departments are specifically interested in comments regarding 
whether a single file for disclosure of all the required information 
would likely be extremely large, making it less than optimal for 
anticipated users, such as software application developers and health 
care researchers. The Departments propose to require plans and issuers 
to publish data on negotiated in-network rates and data on historical 
out-of-network allowed amounts in separate machine-readable files to 
account for the dissimilarity between the static rates paid to in-
network providers under contract and the more variable amounts paid to 
out-of-network providers. The Departments seek comment on the benefits 
and challenges to providing all the required data in two separate 
files, as proposed.

[[Page 65482]]

4. Required Accessibility Standards for Disclosure of Information to 
the Public
    These proposed rules include provisions intended to address 
potential barriers that could inhibit the public's ability to access 
and use the information should it become available. For example, some 
plans and issuers require consumers to set up a username and password, 
or require consumers to submit various types of other information, 
including their email address, in order to access data offered by plans 
and issuers. The Departments are concerned that these requirements 
might deter the public from accessing negotiated rate and allowed 
amount information. Accordingly, these proposed rules would require a 
plan or issuer to make available on an internet website the information 
described earlier in this preamble in two machine-readable files that 
must be accessible free of charge, without having to establish a user 
account, password, or other credentials, and without having to submit 
any personal identifying information such as a name or email address.
    The Departments also considered requiring plans and issuers to 
submit the internet addresses for the machine-readable files to CMS, 
and having CMS make the information available to the public. A central 
location could allow the public to access negotiated rate information 
and historical data for out-of-network allowed amounts in one 
centralized location, reducing confusion and increasing accessibility. 
However, the Departments opted to propose flexible rules allowing plans 
and issuers to publish the files in the location plans and issuers 
determine will be most easily accessible by the intended users. The 
Departments also considered that requiring plans and issuers to notify 
CMS of the internet address for their machine-readable files would 
increase burden on plans and issuers. The Departments request comment 
on whether the proposed requirement to allow issuers to display the 
flat files in the location of their choice is superior to requiring 
plans and issuers to report the web addresses of their machine-readable 
files to CMS for public display. The Departments are specifically 
interested in whether the burden associated with reporting file 
locations to CMS is outweighed by the risk that members of the public 
will be unable to easily locate plans' and issuers' machine-readable 
files.
5. Required Timing of Updates of Information To Be Disclosed to the 
Public
    These proposed rules would require a group health plan or health 
insurance issuer to update monthly the information required to be 
included in each machine-readable file. The Departments recognize, 
however, that information in Negotiated Rate Files may change 
frequently and are considering whether to require plans and issuers to 
update their Negotiated Rate Files more often than proposed to ensure 
that consumers have access to the most up-to-date negotiated rate 
information. Accordingly, the Departments also seek comment on whether 
the final rules should require plans' and issuers' Negotiated Rate 
Files to be updated more frequently. For instance, the Departments 
considered requiring plans and issuers to update negotiated rate 
information within 10 calendar days after the effective date of new 
rates with any in-network provider, including rates for in-network 
providers newly added to a plan's provider network and updates made 
necessary by a provider leaving the plan's or issuer's network. The 
Departments seek comment on this alternate proposal and on whether the 
update timelines for negotiated rate information and historical out-of-
network payment data should be the same.
    The proposed rules would also require plans and issuers to clearly 
indicate the date of the last update made to the Negotiated Rate and 
Allow Amount Files in accordance with guidance issued by the 
Departments. The Departments seek comment on this proposal.
6. Special Rules To Prevent Unnecessary Duplication and Allow for 
Aggregation
    Similar to the proposed cost-sharing information disclosure 
requirements for participants, beneficiaries, and enrollees, the 
Departments propose a special rule to streamline the provision of the 
required disclosures that would be included in the proposed machine-
readable files. This special rule has three components--one for insured 
group health plans where a health insurance issuer offering coverage in 
connection with the plan has agreed to provide the required 
information, another for plans and issuers that contract with third 
parties to provide the information on their behalf, and a special rule 
allowing aggregation of out-of-network allowed amount data.
a. Insured Group Health Plans
    The Departments propose that, to the extent coverage under a group 
health plan consists of group health insurance coverage, the plan would 
satisfy the proposed file requirement if the health insurance issuer 
offering the coverage is required to provide the information pursuant 
to a written agreement between the plan and issuer. Accordingly, if a 
plan sponsor and an issuer enter into a written agreement under which 
the issuer agrees to provide the information required under these 
proposed rules, and the issuer fails to provide full or timely 
information, then the issuer, but not the plan, would violate the 
transparency disclosure requirements and be subject to enforcement 
mechanisms applicable to group health plans under the PHS Act.\58\
---------------------------------------------------------------------------

    \58\ Section 2723 of the PHS Act.
---------------------------------------------------------------------------

b. Use of Third Parties To Satisfy Public Disclosure Requirements
    Plans and issuers may wish to engage other entities to assist them 
in complying with the disclosure requirements under these proposed 
rules. In particular, it is the Departments' understanding that most 
health care insurance and coverage claims in the U.S. are processed 
through health care claims clearinghouses \59\ and that these entities 
maintain and standardize health care information, including information 
on negotiated rates and out-of-network allowed amounts. As a result, 
plans and issuers may reduce the burden associated with making 
negotiated rates and out-of-network allowed amounts available in 
machine-readable files by entering a business associate agreement and 
contracting with a health care claims clearinghouse or other HIPAA-
compliant entity to disclose these data on their behalf.\60\ 
Accordingly, these proposed rules would permit a plan or issuer to 
satisfy the public disclosure requirement of paragraph (c) of the

[[Page 65483]]

proposed rules by entering into a written agreement under which another 
party (such as a TPA or health care claims clearinghouse) will make 
public the required information in compliance with this section. 
However, if a plan or issuer chooses to enter into such an agreement 
and the party with which it contracts fails to provide full or timely 
information, the plan or issuer would violate the transparency 
disclosure requirements.
---------------------------------------------------------------------------

    \59\ The Departments propose to adopt the definition of health 
care clearinghouse under 45 CFR 160.103 for purposes of these 
proposed rules. Under that definition, health care clearinghouse 
means a public or private entity, including billing services, 
repricing companies, community health management information systems 
or community health information systems, and ``value-added'' 
networks and switches, that does either of the following functions: 
(1) Processes or facilitates the processing of health information 
received from another entity in a nonstandard format or containing 
nonstandard data content into standard data elements or a standard 
transaction. (2) Receives a standard transaction from another entity 
and processes or facilitates the processing of health information 
into nonstandard format or nonstandard data content for the 
receiving entity.
    \60\ See 45 CFR 164.502(a)(3) and 164.504(e)(2).
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c. Aggregation Permitted for Allowed Amount Files
    In order to further mitigate privacy concerns and to eliminate 
unnecessary duplication, the Departments propose to permit plans and 
issuers to satisfy the requirement of paragraph (c)(1)(ii) of these 
proposed rules by making available out-of-network allowed amount data 
that has been aggregated to include information from more than one plan 
or policy. As previously discussed, a plan or issuer may satisfy the 
disclosure requirement by disclosing out-of-network allowed amounts 
made available by, or otherwise obtained from, an issuer, a service 
provider, or other party with which the plan or issuer has entered into 
a written agreement to provide the information. Accordingly, under such 
circumstances, these proposed rules would permit issuers, service 
providers, or other parties with which the plan or issuer has 
contracted to aggregate out-of-network allowed amounts for more than 
one plan or insurance policy or contract. To the extent a plan or 
issuer is providing out-of-network allowed amount information in the 
aggregate, the Departments propose to apply the 10 minimum claims 
threshold to the aggregated claims data set, and not at the plan or 
issuer level.
7. Additional Comment Solicitation on the Negotiated Rate and Allowed 
Amount Files
    As discussed earlier in this preamble, the Departments assume that 
some group health plans and health insurance issuers may store data in 
different systems, including dated legacy systems, which could make it 
difficult to accurately and efficiently populate a file as required by 
these proposed rules. The Departments understand that clearinghouses 
may provide a solution to plans and issuers in this situation, as many 
clearinghouses already possess the data that would be required to be 
disclosed in these proposed rules. The Departments seek feedback on the 
ways plans and issuers may be able to use a health care claims 
clearinghouse to fulfill the requirements of this rule and the impact 
this may have in reducing the burden of satisfying these proposed 
requirements. The Departments further seek comment on whether plans and 
issuers similarly could use TPAs to reduce the costs and burden of 
complying with these proposed requirements.
    Although the Departments propose in these rules to require plans 
and issuers to make price and payment information public through 
machine-readable files, the Departments considered proposing to require 
plans and issuers to provide rate information through a publicly 
accessible API that would comply with standards defined by the 
Departments. The Departments note that there is currently no standard 
HIPAA transaction applicable to data that will be made available to 
members of the public who are not covered entities.\61\ The Departments 
also understand that issuer and plan systems could be designed in a 
manner that providing API access to information that would be disclosed 
under these proposed rules could be more efficient and less burdensome 
than maintaining the information in machine-readable files. The 
Departments are concerned, however, that many plans and issuers could 
face significant technical issues in complying with such a requirement. 
The Departments, therefore, seek comment on whether plans and issuers 
should have the flexibility to provide access to negotiated rates and 
out-of-network allowed amounts through a publicly accessible API that 
conforms to defined standards.
---------------------------------------------------------------------------

    \61\ See generally 45 CFR part 162, subparts K-S (describing 
standard HIPAA transactions).
---------------------------------------------------------------------------

    Finally, the Departments recognize that the precise impact of 
making pricing information public cannot be predicted. As discussed in 
section VII of the preamble to these proposed rules, the Departments 
are aware that price transparency could have negative unintended 
consequences in markets where pricing will become very transparent, 
including narrowing of prices and increases in average costs. The 
Departments also recognize that information disclosures allowing 
competitors to know the rates plans and issuers are charging may dampen 
incentives for competitors to offer lower prices, potentially resulting 
in higher prices. Some stakeholders also have expressed concern that 
without additional legislative or regulatory efforts public 
availability of negotiated rates may have the unintended consequence of 
increasing costs for services in highly concentrated markets or result 
in anticompetitive behaviors. Notwithstanding these concerns, the 
Departments remain confident that the release of the data will help 
reduce pricing disparities and potentially drive down health care 
costs, as discussed earlier in this preamble. The Departments seek 
comment on these potential concerns and what additional rules would 
help to mitigate risk of these potential consequences.
Interaction of Proposed Requirements With 45 CFR 156.220
    The Departments recognize that group and individual market health 
insurance issuers that offer QHPs through an Exchange are already 
subject to reporting requirements under 45 CFR 156.220 that implement 
the transparency in coverage requirements of section 1311(e)(3) of 
PPACA. Pursuant to 45 CFR 156.220, issuers of QHPs offered through an 
individual market Exchange or a Small Business Health Options (SHOP) 
Exchange, including stand-alone dental plans, must submit specific 
information about their plans' coverage to the appropriate Exchange, 
HHS, and the state insurance commissioner, as well as make the 
information available to the public in plain language.
    The Departments acknowledge the similar purposes served by 45 CFR 
156.220 and these proposed rules. The Departments, however, do not 
intend for these proposed rules, if finalized, to alter requirements 
under section 45 CFR 156.220. Accordingly, if these proposed rules are 
finalized as proposed, QHP issuers would need to comply with 
requirements under both rules. If necessary and to the extent 
appropriate, HHS may issue future guidance to address QHP issuers' 
compliance with both section 45 CFR 156.220 and these proposed rules 
once they are finalized.

III. Request for Information: Disclosure of Pricing Information Through 
a Standards-Based API

    The Departments are considering further expanding access to pricing 
information--both individuals' access to estimates about their own 
cost-sharing liability, and information about negotiated in-network 
rates and data for out-of-network allowed amounts in future rulemaking. 
Specifically, the Departments are considering whether to require, 
through future rulemaking, that group health plans and health insurance 
issuers make available as discrete data elements through a standards-
based API the cost-sharing information that would be disclosed through 
the proposed internet-based self-service tool, as well as the in-
network negotiated rates and out-of-network allowed amounts that

[[Page 65484]]

this rule proposes to be publicly disclosed through machine-readable 
files. Standards-based APIs are also sometimes referred to as ``open'' 
APIs to convey that certain technical information for the API is openly 
published to facilitate uniform use and data sharing in a secure, 
standardized way.
    The availability of patient cost-sharing information prior to the 
ordering and delivery of services can enable both patients and 
clinicians to make more informed decisions about the course of 
treatment and the cost to the patient. Requiring such access through a 
standards-based API could have a number of benefits for patients, 
providers, and the public at large. It would help promote the 
Departments' goal of allowing technology innovators to compile, 
consolidate and present pricing data in a usable format for consumers, 
thereby helping to make that data more relevant for consumers. For 
example, providing real-time access to the pricing information as 
discrete data elements through this mechanism would enable this 
information to be incorporated into third-party applications used by 
health care consumers or into electronic medical records for point-of-
care decision-making and referral opportunities by clinicians. 
Additionally, being able to access these data elements through 
standards-based APIs would allow health care consumers to use a third-
party application of their choice to obtain personalized, actionable 
health care service price estimates, rather than being required to use 
a specific application or online tool developed or identified by their 
plan or issuer. Widespread adoption of published, common, technical, 
content, and vocabulary standards are an important factor in fostering 
an environment in which third-party vendors can tailor products and 
services to better serve consumers through making health information 
accessible and actionable, including information that can support 
better financial decisions about their health care.
    APIs are messengers or translators that work behind the scenes to 
ensure that software programs can talk to one another.\62\ An API can 
be thought of as a set of commands, functions, protocols, or tools 
published by one software developer (``A'') that enable other software 
developers to create programs (applications or ``apps'') that can 
interact with A's software without the other software developer needing 
to know the internal workings of A's software, all while maintaining 
consumer data privacy standards. This is how API technology enables the 
seamless user experiences associated with applications familiar from 
other aspects of many consumers' daily lives, such as travel and 
personal finance. Standardized, transparent, and procompetitive API 
technology can similarly benefit consumers of health care services. A 
standards-based, transparent API's technical requirements are 
consistent with other system APIs that have been developed to the same 
standards and are openly published, supporting interoperability. 
Technical consistency is fundamental to scale API-enabled 
interoperability and reduce the level of custom development and costs 
necessary to access, exchange, and use health information. Publishing 
specific technical and business information, such as how to demonstrate 
authorization to access specific data, necessary for applications to 
interact successfully with an API in production, is commonplace in many 
other industries and has fueled innovation, growth, and competition. In 
addition, a standards-based API does not allow any and all applications 
or application developers unfettered access to sensitive information 
within a database or data system. Instead, a standards-based API can 
enable an application to securely access a specific set of data based 
on established technical specifications and authentication and access 
controls. These controls can be implemented consistent with the 
organization's identity authentication or access authorization 
verification processes that comply with all applicable privacy and 
security laws and regulations.
---------------------------------------------------------------------------

    \62\ For more information on APIs, see https://www.healthit.gov/api-education-module/story_html5.html.
---------------------------------------------------------------------------

    On March 4, 2019, HHS Office of the National Coordinator for Health 
Information Technology (ONC) published a proposed rule, ``21st Century 
Cures Act: Interoperability, Information Blocking, and the ONC Health 
IT Certification Program'' (ONC 21st Century Cures Act proposed rule), 
which proposed updates to the standards, implementation specifications 
and certification criteria as well as Condition and Maintenance of 
Certification requirements for health information technology (health 
IT) under the ONC Health IT Certification Program. The ONC 21st Century 
Cures Act proposed rule specifically describes the requirements health 
IT developers must meet to comply with the API Condition of 
Certification as established by the 21st Century Cures Act and to be 
certified as meeting API-focused certification criteria under the ONC 
Health IT Certification Program. In the proposed rule, ONC proposed a 
set of technical API standards including the HL7 Fast Healthcare 
Interoperability Resources (FHIR) standard and complementary security 
and app registration protocols, OAuth 2.0 and OpenID Connect Core, for 
adoption by HHS at 45 CFR 170.215. ONC also proposed the adoption of a 
standard called the ``United States Core Data for Interoperability 
(USCDI)'' at 45 CFR 170.213 (84 FR 7424), which would establish a set 
of data classes and constituent data elements to support nationwide 
interoperability. The USCDI standard also references content and 
vocabulary standards relevant to included data that are adopted under 
45 CFR part 170.
    On March 4, 2019, CMS also published a proposed rule, ``Medicare 
and Medicaid Programs; Patient Protection and Affordable Care Act; 
Interoperability and Patient Access for Medicare Advantage Organization 
and Medicaid Managed Care Plans, State Medicaid Agencies, CHIP Agencies 
and Chip Managed Care Entities, Issuers of Qualified Health Plans in 
the Federally-Facilitated Exchanges and Health Care Providers'' (CMS 
Interoperability & Patient Access proposed rule).\63\ This rule would 
require Medicare Advantage organizations, Medicaid and CHIP Fee-for-
Service programs, Medicaid managed care plans, CHIP managed care 
entities, and QHP issuers in the FFEs to provide enrollees with access 
to select data, including claims data, through a standards-based API 
that conforms to the technical standards proposed for adoption in the 
ONC 21st Century Cures Act proposed rule at 45 CFR 170.215. If the CMS 
Interoperability & Patient Access proposed rule is finalized, certain 
entities, such as FFE QHP issuers and companies that participate in 
both Medicare (by offering a Medicare Advantage plan) and the 
individual or group market, would be required to provide certain data 
through a standards-based API, while also being subject to future 
rulemaking under section 2715A of the PHS Act.
---------------------------------------------------------------------------

    \63\ 84 FR 7610 (March 04, 2019).
---------------------------------------------------------------------------

    Sections 13111 and 13112 of the Health Information Technology for 
Economic and Clinical Health Act (HITECH Act) require that federal 
agencies utilize, where available, health information technology 
systems and products that meet standards and implementation 
specifications adopted under section 3004 of the PHS Act. Consistent 
with section 3004 of the PHS

[[Page 65485]]

Act and sections 13111 and 13112 of the HITECH Act, and to limit 
additional burden, the Departments would align, to the extent possible, 
any standards adopted in future rulemaking under section 2715A of the 
PHS Act that rely on standards-based APIs with the standards adopted by 
HHS under section 3004 of the PHS Act. This would include the technical 
standards for APIs proposed in the ONC 21st Century Cures Act proposed 
rule for HHS adoption at 45 CFR 170.215, which are also referenced in 
the CMS Interoperability & Patient Access proposed rule, though the 
Departments recognize that the content and vocabulary standards in the 
CMS Interoperability & Patient Access proposed rule relating to claims 
and clinical data are not applicable to pricing data.
    The API standards proposed for HHS adoption in the ONC 21st Century 
Cures Act proposed rule are published standards. Notably, the FHIR 
standard is a consensus technical standard that holds great potential 
for supporting interoperability and enabling new entrants and 
competition throughout the health care industry. FHIR leverages modern 
computing techniques to enable users to access health care information 
over the internet via a standardized RESTful API. Specifically, FHIR 
includes both technical specifications for API transport (RESTFul + 
JSON) and also specifications for API content known as ``resources,'' 
which are a type of software architecture that provides 
interoperability between the internet and computer systems. Developers 
can create tools that interact with FHIR APIs to provide actionable 
data to their stakeholders. In the short time since FHIR was first 
created, the health care industry has rapidly embraced the standard 
through substantial investments in industry pilots, specification 
development, and the deployment of FHIR APIs supporting a variety of 
business needs.
    The Departments request comment on whether API technical standards, 
based on the FHIR standard, as aligned with the ONC 21st Century Cures 
Act proposed rule and the CMS Interoperability & Patient Access 
proposed rule, should be required in the future across group health 
plans and health insurance coverage in the group and individual 
markets.\64\ Specifically, the Departments are seeking comment on 
whether the Departments should propose an approach under which plans 
and issuers would be required to develop and implement procedures to 
make data available through APIs using the HL7[supreg] FHIR[supreg] IG: 
PSS for Patient Cost Transparency.\65\ Recognizing that this IG is 
currently under development, the Departments could propose a staged 
approach to the implementation of this API requirement: (1) Starting 
prior to when the IG is final (for example, starting January 1, 2022), 
payers could be required to make data available through an API; and (2) 
starting on or after the final IG publication date (anticipated to be 
October 1, 2023), plans and issuers could be required to make data 
available through APIs using the HL7[supreg] FHIR[supreg] IG: PSS for 
Patient Cost Transparency. The Departments are considering an approach 
under which initially plans and issuers would not be required to 
utilize the FHIR standard for this API, but the Departments would 
strongly encourage such use. While the IG for Patient Cost Transparency 
would not yet be finalized during this period, prior iteration(s) of 
the standard for trial use would be publicly available and could 
provide a development roadmap for payers wishing to deploy a FHIR-based 
API. The Departments are soliciting comment on the appropriateness of 
this proposed approach, the challenges it may present, and whether 
these suggested timeframes are appropriate.
---------------------------------------------------------------------------

    \64\ The Departments note that there is currently no standard 
HIPAA transaction applicable to data that will be made available to 
members of the public who are not covered entities. See generally 45 
CFR 162.923.
    \65\ https://www.hl7.org/special/Committees/projman/searchableProjectIndex.cfm?action=edit&ProjectNumber=1514.
---------------------------------------------------------------------------

    The Departments request comment on what pricing information should 
be disclosed through an API, including whether all data elements 
required to be provided through the internet-based self-service tool 
and the negotiated in-network rate and allowed amount data for out-of-
network providers machine-readable files should be required, whether a 
more limited set of data elements should be required in future 
rulemaking, and whether there are additional data elements that should 
be required.
    The Departments recognize that requiring plans and issuers to 
disclose information related to cost-sharing liability, negotiated 
rates, and allowed-amounts for items and services furnished by out-of-
network providers through a standards-based API would place additional 
burdens on issuers. The Departments seek comment on the possible scope 
of this burden. The Departments request comment on the potential 
operational impact on plans and issuers of using an API standard that 
aligns with the CMS Interoperability & Patient Access proposed rule to 
make pricing information more accessible. With adequate time for 
implementation, the Departments believe an API solution would not only 
greatly benefit patients, but may prove less burdensome for issuers and 
plans than requiring that the disclosures be made via machine-readable 
files. The Departments seek comment on plans' and issuers' readiness to 
disclose such data elements through an API, and the amount of time 
plans and issuers would need to implement such standards.
    While the Departments expect that such a requirement would be 
justified by the increase in access to pricing information for 
consumers and the public, the Departments welcome comment on the 
utility of providing access via a standards-based API in the future, if 
a plan or issuer based tool and negotiated in-network rate and 
historical payments to out-of-network providers files are already 
available, as proposed elsewhere in this rule. The Departments are of 
the view that requiring plans and issuers to make pricing data 
available through a standards-based API would spur competition and 
reduce the burden on application developers to innovate around 
providing more user-friendly and effective applications for consumers. 
The ability to develop an application that can effectively interconnect 
with multiple APIs based on a single standard rather than having to 
build for separate proprietary APIs (or machine-readable files) allows 
application developers to focus development on meeting consumer needs. 
These applications would then allow consumers to realize the potential 
associated with greater access to these data. The Departments 
anticipate that a future rule that would propose the use of a 
standards-based API consistent with the API technical standards 
proposed for HHS adoption in the ONC 21st Century Cures Act proposed 
rule, to the extent such proposals are finalized, would encourage 
innovation and ensure that the pricing data are standardized in ways 
that promote interoperability and the use of electronic technological 
and third-party innovation. Access to pricing data through standards-
based APIs would encourage application developers to try out different 
application features in order to determine what features are most 
engaging and user friendly for consumers. The Departments are also 
interested in comments from

[[Page 65486]]

application developers about potential uses for these data.\66\
---------------------------------------------------------------------------

    \66\ See 84 FR 7628-7639.
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    If the Departments move forward with a proposal in future 
rulemaking to require plans and issuers to make pricing information 
available through an API, the Departments have determined that the 
specific business and technical documentation necessary to interact 
with the proposed APIs would need to be made freely and publicly 
accessible. The Departments understand transparency about API 
technology is critical to ensuring that any interested application 
developer could easily obtain information needed to develop 
applications technically compatible with a plan's or issuer's API. 
Transparency would also be needed so that application developers would 
understand how to successfully interact with a plan's or issuer's API, 
including by satisfying any requirements the organization may establish 
for verification of developers' identity and their applications' 
authenticity, consistent with its security risk analysis and related 
organizational policies and procedures to ensure it maintains an 
appropriate level of privacy and security protection for data required 
to be disclosed. The Departments would likely propose to use the 
documentation requirements for standards-based APIs as defined in the 
ONC 21st Century Cures Act proposed rule and the CMS Interoperability & 
Patient Access proposed rule, to the extent those standards are 
finalized (see 84 FR 7634 through 7635). The Departments request 
comment on the future applicability of the documentation requirements 
for standards-based APIs as defined in the ONC 21st Century Cures Act 
proposed rule and the CMS Interoperability & Patient Access proposed 
rule, for the purposes of this use case specific to price transparency, 
and on what other documentation requirements are necessary to ensure 
transparency and consistency of pricing information.
    The CMS Interoperability & Patient Access proposed rule proposed 
requirements for routine testing and monitoring of standards-based APIs 
(see 84 FR 7635). The Departments seek comment on whether there are 
reasons why different testing and monitoring requirements should apply 
to plans and issuers in the group and individual markets, for use 
specifically regarding price transparency and, if so, what requirements 
should apply. The Departments are also interested in comments regarding 
whether requiring the same testing and monitoring requirements would 
produce efficiencies for entities subject to both the CMS 
Interoperability & Patient Access proposed rule and section 2715A of 
the PHS Act.
    The Departments recognize that while a specific standard for the 
standards-based API would need to be codified in regulation, the need 
for continually evolving standards development has historically 
outpaced the Departments' ability to amend regulatory text. In order to 
address how standards development can outpace agencies' rulemaking 
schedule, the Departments are considering proposing the approach for 
permitting stakeholders to utilize updated standards required for the 
API, as proposed in the CMS Interoperability & Patient Access proposed 
rule, to the extent it is finalized as proposed (see 84 FR 7630-7631), 
which references the Standards Version Advancement Process discussed in 
the ONC 21st Century Cures Act proposed rule (84 FR 7497-7498). 
However, the Departments are interested in comments regarding the 
impact on plans and issuers of updating APIs, and the frequency with 
which such updates should occur for this test case. The Departments 
also welcome comments on the circumstances in which voluntary use of 
updated versions of adopted standards set forth in future rulemaking 
should be allowed, and if the Departments should maintain alignment 
with the approach described in the CMS Interoperability and Patient 
Access proposed rule.\67\
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    \67\ The Departments direct readers to the ONC 21st Century 
Cures Act proposed rule for further discussion on the voluntary 
advancement to updated versions of standards adopted for HHS use: 
https://www.federalregister.gov/d/2019-02224/p-1003.
---------------------------------------------------------------------------

    The Departments are also interested in comments regarding potential 
privacy and security risks associated with a requirement that plans and 
issuers make pricing information available through a standards-based 
API. In the hands of a HIPAA-covered entity, such as a health care 
provider or health plan, or its business associate, individually 
identifiable pricing information about one's health care is PHI as 
defined at 45 CFR 160.103. As explained in the ONC 21st Century Cures 
Act proposed rule \68\ direct-to-consumer health information technology 
products and services are a growing sector of the health IT market, but 
are often not regulated by the HIPAA Rules. Rather, the privacy and 
security practices of consumer-facing health IT products and services 
are typically regulated by the Federal Trade Commission Act (FTC Act). 
However, the FTC Act applies to acts and practices that are unfair and 
deceptive (15 U.S.C. 45(a)(1)), and does not prescribe privacy 
requirements to be adopted or followed that can be leveraged for the 
purpose of recognizing reasonable and necessary privacy-protective 
practices in these proposed rules.\69\
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    \68\ 84 FR 7424 (March 4, 2019).
    \69\ See HHS, Examining Oversight of the Privacy & Security of 
Health Data Collected by Entities Not Regulated by HIPAA, available 
at: https://www.healthit.gov/sites/default/files/non-covered_entities_report_june_17_2016.pdf.
---------------------------------------------------------------------------

    Although nothing would prevent an enrollee from requesting 
information through the API that is unrelated to the individual's 
actual health status or needs, the Departments anticipate that 
individuals typically would be seeking information related to their own 
potential health conditions and needs. For example, an individual is 
more likely to request cost-sharing information with in-network 
obstetricians if she is pregnant than if she is not. Revealing what 
information has been requested by individual enrollees could, thus, 
reveal sensitive information about their health status. Ensuring the 
privacy and security of these data if they are transmitted through the 
API would be of critical importance. To the extent that information 
that could be requested via the API would be considered PHI, covered 
entities and business associates would be able to disclose that 
information only to the extent permitted or required by the HIPAA 
Rules, and other federal and state laws. The Departments request 
comment on privacy and security standards that would be sufficient to 
protect the sensitive health data the Departments could propose in 
future rulemaking to be transmitted via an API, or whether additional 
privacy and security standards should be required.
    If an enrollee directs a covered entity to send his PHI to a third-
party application chosen by the individual, and that third-party 
application developer is neither a covered entity nor business 
associate under HIPAA Rules, (such as an application developer retained 
by the covered entity to transmit the PHI to the individual), the PHI 
to be transmitted through the API would not be protected under HIPAA 
Rules after being transmitted through the standards-based API and 
received by the third party, and covered entities would not be 
responsible for the security of that PHI once it has been received by 
the third-party application.\70\ The Departments

[[Page 65487]]

recognize that this could present a risk to sensitive information about 
enrollees' health status if the third party subsequently misuses the 
data or has a security breach. Nevertheless, the Departments are of the 
view that consumers should have access to this information to empower 
them to make informed health care decisions. To this end, the 
Departments believe consumers should be able to share such data with 
third-party applications of their choosing, but that they should 
understand that they are accepting the potential privacy and security 
risks that come from using a third-party application that is not 
required to comply with the HIPAA Rules.
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    \70\ HHS Office for Civil Rights, FAQ on Access, Health Apps and 
APIs, https://www.hhs.gov/hipaa/for-professionals/privacy/guidance/access-right-health-apps-apis/ (``Once health information 
is received from a covered entity, at the individual's direction, by 
an app that is neither a covered entity nor a business associate 
under HIPAA, the information is no longer subject to the protections 
of the HIPAA Rules. If the individual's app--chosen by an individual 
to receive the individual's requested ePHI--was not provided by or 
on behalf of the covered entity (and, thus, does not create, 
receive, transmit, or maintain ePHI on its behalf), the covered 
entity would not be liable under the HIPAA Rules for any subsequent 
use or disclosure of the requested ePHI received by the app.''). See 
also, 45 CFR 164.524(a)(1), (c)(2)(ii), and (c)(3)(ii).
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    The Departments are committed to maximizing enrollees' access to 
and control over their health information, including information 
designed to enable them to be more adept consumers of health care. The 
use of third-party applications to access pricing information is likely 
to introduce privacy risks of which consumers may be unaware, 
particularly if they do not understand that third-party application 
developers that are not providing an application on behalf of a covered 
entity are not business associates, and are not bound by the HIPAA 
Rules. The Departments seek comment regarding what information plans, 
issuers and third-party application developers should make available to 
individuals to better help them understand essential information about 
the privacy and security of their information, and what to do if they 
believe they have been misled or deceived about an application's terms 
of use or privacy policy. The Departments also seek comment regarding 
the manner and timing under which such information should be provided.
    The Departments are considering requirements that would specify 
that consistent with the HIPAA Privacy Rule, plans and issuers 
generally may not deny access to a third party when an enrollee 
requests that the information be made accessible as proposed in this 
rule. As noted in guidance from HHS Office for Civil Rights, 
disagreement with the individual about the worthiness of the third 
party as a recipient of PHI, or even concerns about what the third 
party might do with the PHI, are not grounds for denying an access 
request.\71\ However, a HIPAA covered entity is not expected to 
tolerate unacceptable levels of risk to the PHI in its systems, as 
determined by its own risk analysis.\72\ Accordingly, it may be 
appropriate for a plan or issuer to deny or terminate specific 
applications' connection to its API under certain circumstances in 
which the application poses an unacceptable risk to the PHI on its 
systems or otherwise violates the terms of use of the API technology. 
In the CMS Interoperability & Patient Access proposed rule, CMS 
proposed that applicable entities could, in accordance with the HIPAA 
Security Rule, deny access to the API if the entity reasonably 
determines, based on objective, verifiable criteria that are applied 
fairly and consistently, that allowing that application to connect or 
remain connected to the API would present an unacceptable level of risk 
to the security of PHI on the entity's systems. The Departments are 
considering proposing a similar standard in future rulemaking for this 
specific use case. The Departments seek comment on this, as well as 
whether there are other specific circumstances under which plans and 
issuers should be permitted to decline to establish or permitted to 
terminate a third-party application's connection to the entity's API 
while remaining in compliance with a requirement to offer patients 
access through standards-based APIs for purposes of this specific use 
case.
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    \71\ See https://www.hhs.gov/hipaa/for-professionals/faq/2037/are-there-any-limits-or-exceptions-to-the-individuals-right/. See also, 45 CFR 164.524(a)(2), (3) and (4).
    \72\ See 45 CFR 164.524(c)(2) and (3) and 164.308(a)(1), OCR 
HIPAA Guidance/FAQ-2036: https://www.hhs.gov/hipaa/for-professionals/faq/2036/can-an-individual-through-the-hipaa-right/, and OCR HIPAA Guidance/FAQ-2037: https://www.hhs.gov/hipaa/for-professionals/faq/2037/are-there-any-limits-or-exceptions-to-the-individuals-right/.
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    In addition, and to address the concerns related to the risk to PHI 
within a system, the Departments further note that there are extant 
best practices and technical specifications for security related to 
authorization and access to data through APIs, which can be applied to 
health care use cases. In the ONC 21st Century Cures Act proposed rule, 
the ONC proposed technical standards for an API including complementary 
security and app registration protocols--OAuth 2.0 and OpenID Connect 
Core. Specifically, ONC proposed to adopt the ``OpenID Connect Core 1.0 
incorporating errata set 1'' standard in 45 CFR[thinsp]170.215(b), 
which complements the SMART Application Launch Framework Implementation 
Guide Release 1.0.0[thinsp][87] (SMART Guide). The OpenID standard is 
typically paired with OAuth 2.0 implementations and focuses on user 
authentication. ONC proposed to adopt the SMART Guide in 45 
CFR[thinsp]170.215(a)(5) as an additional implementation specification 
associated with the FHIR standard. This guide is referenced by the US 
FHIR Core IG and is generally being implemented by the health IT 
community as a security layer with which FHIR deployment is being 
combined (from both a FHIR server and FHIR application perspective). 
The use of these technical standards creates the ability for plans and 
issuers to use industry best practices to control authorization and 
access to the API and establish appropriate technical requirements for 
the security of third-party application access.
    Further, the implementation of OpenID Connect paired with OAuth 2.0 
allows organizations to securely deploy and manage APIs consistent with 
their organizational practices to comply with existing privacy and 
security laws and regulations. The organization publishing the API 
retains control over how patients authenticate when interacting with 
the API. For example, a patient may be required to use the same 
credentials they created and use to access their health information 
through the internet-based self-service tool as they do when 
authorizing an app to access their data. Since patients complete the 
authentication process directly with the organization, the app would 
not have access to their credentials. The Departments are of the view 
that implementing these security controls and safeguards would help to 
protect health information technology from nefarious actors.

IV. Request for Information: Provider Quality Measurement and Reporting 
in the Private Health Insurance Market

    Quality, in addition to price, is essential for making value-based 
purchasing decisions.\73\ Thus, the Departments are of the view that 
information relating to the quality of prospective health care services 
is critical to achieving the objective of increasing the value of 
health care. The Departments understand that for this

[[Page 65488]]

reason, many existing cost estimator tools display provider quality 
information along with cost-sharing information.\74\ Many of the cost 
estimator tools use existing provider-level CMS quality measures and 
data. For instance, in Colorado, pricing information for health care 
items and services is displayed along with five-star ratings from the 
CMS Hospital Consumer Assessment of Healthcare Providers and Systems 
(HCAHPS) survey results.\75\ In Maine, consumers are able to compare 
median provider payments alongside patient experience HCAHPS survey 
results and other clinical quality measures, such as measures from CMS' 
Hospital Compare about how well the provider prevents health care 
associated infections.\76\
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    \73\ Damberg, C., Sorbero, M., Lovejoy, S., Martsolf, G., Raaen, 
L., Mandel, D. ``Measuring Success in Health Care Value-Based 
Purchasing Programs.'' 4 RAND Health, 2014; 4(3); Q. 9. 2014. 
Available at: https://www.rand.org/pubs/periodicals/health-quarterly/issues/v4/n3/09.html.
    \74\ https://www.truthinhealthcare.org/consumer-resources/cost-comparison-tools/.
    \75\ Center for Improving Value in Health Care. 2019 Public 
Facility and Quality Reporting. Available here: https://www.civhc.org/wp-content/uploads/2018/12/Prometheus-and-Imaging-Methodology_FAQs_for-Preview.pdf.
    \76\ https://www.comparemaine.org/?page=methodology.
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    Over the years, CMS has made much progress in improving health care 
quality measurement and making such quality information publicly 
available through various mechanisms, including public use files on the 
CMS website.\77\ In addition, CMS makes quality of health care 
information publicly available at https://data.Medicare.gov for a 
number of different health care providers and suppliers, including 
hospitals, nursing homes, and physicians. As exemplified in both 
Colorado and Maine, such data are available for the public and could be 
used by providers and suppliers of health care and pricing tool 
developers and integrated into cost-estimator tools.
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    \77\ https://www.cms.gov/CCIIO/Resources/Data-Resources/marketplace-puf.html.
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    The Departments also understand that many group health plans and 
health insurance issuers use other provider-level quality metrics as 
part of their provider directories and cost- estimator tools and are of 
the view that quality metrics play a large role in helping their 
participants, beneficiaries, and enrollees utilize these tools. From 
stakeholder engagement, the Departments know that the quality 
information included in these tools varies from issuer to issuer. 
Similar to states discussed earlier, some issuers have also used HCAHPS 
to provide meaningful information for consumers on patients' overall 
satisfaction with hospitals. In addition to CMS measures and data, 
plans and issuers have also used quality metrics information from the 
National Committee for Quality Assurance's (NCQA) Healthcare 
Effectiveness Data and Information Set (HEDIS); Bridges to Excellence, 
Center for Improvement in Healthcare (CIHQ), DNV GL--Healthcare 
Accreditations and Certifications, Castle Connelly Top Doctors, the 
Joint Commission on Accreditation of Healthcare Organizations (``the 
Joint Commission''), the Core Quality Measures Collaborative, and 
quality based recognition programs (such as from associations like the 
American Board of Medical Specialties). In addition, some plans and 
issuers have also relied on including validated consumer reviews, since 
consumers often select providers through word of mouth or referral from 
a provider or friend, relative, or neighbor. In general, the 
Departments understand that plans and issuers have also found it 
beneficial to include information on providers' accreditation, 
certification status, education, and professional achievements in their 
provider directory tools. This may include information from sources 
such as Leapfrog Hospital Safety Grade, board certification information 
on providers, health facilities accreditation program, and the Joint 
Commission.
    The Departments are also aware that there are state and private 
sector efforts to develop and report on provider quality. In Minnesota, 
MN Community Measurement develops measures that are used in both the 
public and private sectors to report on provider quality.\78\ 
Nationally recognized accrediting entities, such as NCQA, URAC, The 
Joint Commission, and National Quality Forum (NQF) have also been at 
the forefront of providing health care quality measures for both health 
plan and provider-level reporting.
---------------------------------------------------------------------------

    \78\ https://mncm.org/.
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    The Departments are of the view that these public and private 
sector quality initiatives can be leveraged to complement the price 
transparency proposals discussed elsewhere in this proposed rule. The 
Departments are interested in how these public and private sector 
quality measures might be used to compliment cost-sharing information 
for plans and issuers in the private health insurance market.
    To enhance the Departments' efforts in promoting competition in the 
health care market that is based on value, the Departments are 
interested in stakeholder input on a number of quality reporting 
related issues, including the following:
    1. Whether, in addition to the price transparency requirements the 
Departments propose in these rules, the Departments should also impose 
requirements for the disclosure of quality information for providers of 
health care items and services.
    2. Whether health care provider quality reporting and disclosure 
should be standardized across plans and issuers or if plans and issuers 
should have the flexibility to include provider quality information 
that is based on metrics of their choosing, or state-mandated measures.
    3. What type of existing quality of health care information would 
be most beneficial to beneficiaries, participants, and enrollees in the 
individual and group markets? How can plans and issuers best enable 
individuals to use health care quality information in conjunction with 
cost-sharing information in their decision making before or at the time 
a service is sought?
    4. Would it be feasible to use health care quality information from 
existing CMS quality reporting programs, such as the Medicare Quality 
Payment Program (QPP) \79\ or the Quality Measures Inventory (QMI) \80\ 
for in-network providers in the individual and group markets?
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    \79\ https://qpp.cms.gov/.
    \80\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/MMS/Quality-Measures-Inventory.html#targetText=Quality%20Measures%20Inventory,quality%2C%20reporting%20and%20payment%20programs.&targetText=It%20is%20important%20to%20note,or%20CMS%20Program%2FMeasure%20Leads.
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    5. Could quality of health care information from state-mandated 
quality reporting initiatives or quality reporting initiatives by 
nationally recognized accrediting entities, such as NCQA, URAC, The 
Joint Commission, and NQF, be used to help participants, beneficiaries 
and enrollees meaningfully assess health care provider options?
    6. What gaps are there in current measures and reporting as it 
relates to health care services and items in the individual and group 
markets?
    7. The Departments are also interested in understanding any 
limitations plans and issuers might have in reporting on in-network 
provider quality in the individual and group markets.
    8. The Departments seek more information about how and if quality 
data is currently used within plans' and issuers' provider directories 
and cost-estimator tools. The Departments also seek information on the 
data sources for quality information, and whether plans and issuers are 
using internal claims data or publicly-available data.
    The OPPS Price Transparency final rule, discussed elsewhere in this 
preamble, also included a request for

[[Page 65489]]

comment on quality measurement relating to price transparency. The 
Departments intend to review and consider the public input related to 
quality in response to that rule for future rulemaking.

V. Overview of the Proposed Rule Regarding Issuer Use of Premium 
Revenue Under the Medical Loss Ratio Program: Reporting and Rebate 
Requirements--The Department of Health and Human Services

    Consumers with health insurance often lack incentives to seek care 
from lower-cost providers, for example when consumers' out-of-pocket 
costs are limited to a set copayment amount regardless of the costs 
incurred by the issuer. Innovative benefit designs can be used to 
increase consumer engagement in health care purchasing decisions. HHS 
proposes to allow issuers that empower and incentivize consumers 
through the introduction of new or different plans that include 
provisions encouraging consumers to shop for services from lower-cost, 
higher-value providers, and that share the resulting savings with 
consumers, to take credit for such ``shared savings'' payments in their 
medical loss ratio (MLR) calculations. HHS believes this proposal would 
preserve the statutorily-required value consumers receive for coverage 
under the MLR program, while encouraging issuers to offer new or 
different plan designs that support competition and consumer engagement 
in health care.

Formula for Calculating an Issuer's Medical Loss Ratio (45 CFR 158.221)

    Section 2718(b) of the PHS Act requires a health insurance issuer 
offering group or individual health insurance coverage (including 
grandfathered health insurance coverage) to provide rebates to 
enrollees if the issuer's MLR falls below specified thresholds 
(generally, 80 percent in the individual and small group markets and 85 
percent in the large group market). Section 2718(b) of the PHS Act 
generally defines MLR as the percentage of premium revenue (after 
certain adjustments) an issuer expended on reimbursement for clinical 
services provided to enrollees and on activities that improve health 
care quality. Consistent with section 2718(c) of the PHS Act, the 
standardized methodologies for calculating an issuer's MLR must be 
designed to take into account the special circumstances of smaller 
plans, different types of plans, and newer plans.
    Several states have recently considered or adopted legislation \81\ 
to promote health care cost transparency and encourage issuers to 
design and make available plans that ``share'' savings with enrollees 
who shop for health care services and choose to obtain care from lower-
cost, higher-value providers. In addition, at least two states and a 
number of self-insured group health plans \82\ have incorporated such 
shared savings provisions into their health plans. Under some plan 
designs, the savings are calculated as a percentage of the difference 
between the rate charged by the provider chosen by the consumer for a 
medical procedure and the average negotiated rate for that procedure 
across all providers in the issuer's network. Under other plan designs, 
the shared savings are provided as a flat dollar amount according to a 
schedule that places providers in one or more tiers based on the rate 
charged by each provider for a specified medical procedure. Under 
various plan designs, the shared savings may be provided in form of a 
gift card, a reduction in cost sharing, or a premium credit. HHS is of 
the view that such unique plan designs would motivate consumers to make 
more informed choices by providing consumers with tangible incentives 
to shop for care at the best price. As explained elsewhere in this 
preamble, there is ample evidence that increased transparency in health 
care costs would lead to increased competition among providers.\83\ HHS 
is of the view that allowing flexibility for issuers to include savings 
they share with enrollees in the numerator of the MLR would increase 
issuers' willingness to undertake the investment necessary to develop 
and administer plan features that may have the effect of increasing 
health care cost transparency which in turn would lead to reduced 
health care costs.
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    \81\ See, for example, 24-A Maine Rev. Stat. Ann. sec. 4318-A 
(adopted June 19, 2017); Neb. Rev. Stat. sec. 44-1401 et seq. 
(adopted Apr. 23, 2018); Utah Code Ann. sec. 31A-22-647 (adopted 
March 19, 2018); AZ SB 1471 (2018); N.H. HB 1784-FN (2018); MA H2184 
(2017).
    \82\ See, for example, the State of New Hampshire employee 
medical benefit, the Site of Service and Vitals SmartShopper 
Programs, https://das.nh.gov/riskmanagement/active/medical-benefits/cost-savings-programs.aspx#vitals-smartshopper; Utah Public 
Employees Health Program Cost Comparison Tool, https://www.pehp.org/general/how-to-use-cost-saving-tools.
    \83\ Congressional Research Service Report to Congress: Does 
Price Transparency Improve Market Efficiency? Implications of 
Empirical Evidence in Other Markets for the Healthcare Sector, July 
24, 2007.
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    HHS has in the past exercised its authority under section 2718(c) 
of the PHS Act to take into account the special circumstances of 
different types of plans by providing adjustments to increase the MLR 
numerator for ``mini-med'' and ``expatriate'' plans,\84\ student health 
insurance plans,\85\ as well as for QHPs that incurred Exchange 
implementation costs \86\ and certain non-grandfathered plans (that is, 
``grandmothered'' plans).\87\ This authority has also been exercised to 
recognize the special circumstances of new plans \88\ and smaller 
plans.\89\ Consistent with this approach, HHS is proposing to exercise 
its authority to account for the special circumstances of new and 
different types of plans that provide ``shared savings'' to consumers 
who choose lower-cost, higher-value providers by adding a new paragraph 
45 CFR 158.221(b)(9) to allow such shared savings payments to be 
included in the MLR numerator. HHS makes this proposal to ensure, 
should the proposal be finalized as proposed, that issuers would not be 
required to pay MLR rebates based on a plan design that would provide a 
benefit to consumers that is not currently captured in any existing MLR 
revenue or expense category. HHS proposes that the amendment to 45 CFR 
158.221 become effective beginning with the 2020 MLR reporting year 
(for reports filed by July 31, 2021). HHS invites comments on this 
proposal.
---------------------------------------------------------------------------

    \84\ See 45 CFR 158.221(b)(3) for ``mini-med'' plans and 45 CFR 
158.221(b)(4) for ``expatriate'' plans. Also see the Health 
Insurance Issuers Implementing Medical Loss Ratio (MLR) Requirements 
Under the Patient Protections and Affordable Care Act; Interim Final 
Rule; 75 FR 74863 at 74872 (December 1, 2010).
    \85\ See 45 CFR 158.221(b)(5). Also see the Student Health 
Insurance Coverage; Final Rule, 77 FR 16453 at 16458-16459 (March 
21, 2012).
    \86\ See 45 CFR 158.221(b)(7). Also see the Exchange and 
Insurance Market Standards for 2015 and Beyond; Final Rule; 79 FR 
30240 at 30320 (May 27, 2014).
    \87\ See 45 CFR 158.221(b)(6). Also see 79 FR at 30320 (May 27, 
2014).
    \88\ See 45 CFR 158.121. Also see 75 FR at 74872-74873 (Dec. 01, 
2010) and the HHS Notice of Benefit and Payment Parameters for 2018 
Final Rule; 81 FR 94058 at 94153-94154 (Dec. 22, 2016).
    \89\ See 45 CFR158.230 and 158.232. Also see 75 FR at 74880 
(Dec. 01, 2010).
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VI. Applicability

A. In General

    The Departments propose to require group health plans and health 
insurance issuers of individual market and group market health 
insurance coverage, including self-insured group health plans, to 
disclose pricing information as discussed in these proposed rules, with 
certain exceptions as discussed in more detail in this section of the 
preamble. The Departments are of the view that consumers across the 
private health

[[Page 65490]]

insurance market will benefit from the availability of pricing 
information that is sufficient to support informed health care 
decisions on an element as basic as price. Although the Departments 
considered making the proposed requirements applicable to a more 
limited part of the private health insurance market, the Departments 
are of the view that consumers across the market should come to expect 
and receive the same access to standardized, meaningful pricing 
information and estimates. This broader applicability also has the 
greatest potential to reform health care markets.
    The Departments also considered limiting applicability to 
individual market plans and insured group health plans; but concluded 
that limiting applicability would be inconsistent with section 2715A of 
the PHS Act. The Departments are concerned that a more limited approach 
might encourage plans and issuers to simply shift costs to sectors of 
the market where these proposed requirements would not apply and where 
consumers have less access to pricing information. The Departments are 
of the view that consumers in all private market health plans should be 
able to enjoy the benefits of greater price transparency and that a 
broader approach will have the greatest impact toward the goal of 
controlling the cost of health care industry-wide.
    The Departments anticipate that pricing information related to 
items and services that are subject to capitation arrangements under a 
specific plan or contract could meet transparency standards by 
disclosing only the consumer's anticipated liability. For example, some 
providers participate in accountable care organizations (ACOs) and may 
be reimbursed based on a capitation payment. ACOs are groups of 
doctors, hospitals, and other health care providers that come together 
to provide coordinated care for their patients. The goal of ACOs is to 
ensure that patients get the right care at the right time, while 
avoiding unnecessary duplication of services and preventing medical 
errors. When an ACO succeeds both in delivering high-quality care and 
spending health care dollars more wisely, the ACO will share in the 
savings it achieves. Under such arrangements, the group health plan or 
health insurance issuer may reimburse the providers a set dollar 
payment per patient per unit of time to cover a specified set of 
services and administrative costs without regard to the actual number 
of services provided. The Departments also understand that there may be 
certain plan benefit structures where full disclosure of these data is 
not aligned with the goals of these proposed rules, such as a staff 
model health maintenance organization (HMO). The Departments seek 
comment on whether there are certain reimbursement or payment models 
that should be partially or fully exempt from these requirements, or 
should otherwise be treated differently. Further, the Departments seek 
comment on how consumers may be more informed about their cost-sharing 
requirements under these reimbursement or payment models.
    By statute, certain plans and coverage are not subject to the 
transparency provisions under section 2715A of the PHS Act and, 
therefore, would not be subject to these proposed rules. This includes 
grandfathered health plans, excepted benefits, and short-term, limited-
duration insurance, as discussed later in this section of the preamble.
    Grandfathered health plans are health plans that were in existence 
as of March 23, 2010, the date of enactment of PPACA, and that are only 
subject to certain provisions of PPACA, as long as they maintain status 
as grandfathered health plans under the applicable rules.\90\ Under 
section 1251 of PPACA, section 2715A of the PHS Act does not apply to 
grandfathered health plans. These proposed rules would not apply to 
grandfathered health plans (as defined in 26 CFR 54.9815-1251, 29 CFR 
2590.715-1251, 45 CFR 147.140).
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    \90\ 26 CFR 54.9815-1251, 29 CFR 2590.715-1251, and 45 CFR 
147.140.
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    In accordance with sections 2722 and 2763 of the PHS Act, section 
732 of ERISA, and section 9831 of the Code, the requirements of title 
XXVII of the PHS Act, part 7 of ERISA, and chapter 100 of the Code do 
not apply to any group health plan (or group health insurance coverage 
offered in connection with a group health plan) or individual health 
insurance coverage in relation to its provision of excepted benefits, 
if certain conditions are satisfied. Excepted benefits are described in 
section 2791 of the PHS Act, section 733 of ERISA, and section 9832 of 
the Code. Section 2715A of the PHS Act is contained in title XXVII of 
the PHS Act, and, therefore, these proposed rules would not apply to a 
plan or coverage consisting solely of excepted benefits.
    The Departments propose that the proposed rules would not apply to 
health reimbursement arrangements, or other account-based group health 
plans, as defined in 26 CFR 54.9815-2711(d)(6)(i), 29 CFR 2590.715-
2711(d)(6)(i), and 45 CFR[thinsp]147.126(d)(6)(i), that simply make 
certain dollar amounts available, with the result that cost-sharing 
concepts are not applicable to those arrangements.
    These proposed rules also would not apply to short-term, limited-
duration insurance. Under section 2791(b)(5) of the PHS Act, short-
term, limited-duration insurance is excluded from the definition of 
individual health insurance coverage and generally is therefore, exempt 
from requirements of title XXVII of the PHS Act that apply in the 
individual market, including section 2715A of the PHS Act.\91\
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    \91\ See 26 CFR 54.9801-2, 29 CFR 2590.701-2, and 45 CFR 
144.103.
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    These proposed rules would apply to ``grandmothered'' plans. 
Grandmothered plans refer to certain non-grandfathered health insurance 
coverage in the individual and small group markets with respect to 
which CMS has announced it will not take enforcement action even though 
the coverage is out of compliance with certain specified market 
requirements. Under current guidance, such coverage may be renewed 
through policy years beginning on or before October 1, 2020, provided 
that all such coverage comes into compliance with the specified 
requirements by January 1, 2021.\92\ While grandmothered plans are not 
treated as being out of compliance with certain specified market 
reforms, section 2715A of the PHS Act is not among those specified 
reforms. Therefore, the Departments propose these rules would apply to 
``grandmothered'' plans. The Departments seek comment on whether 
grandmothered plans may face special challenges in complying with these 
transparency reporting provisions and whether the proposed rules should 
or should not apply to grandmothered plans.
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    \92\ CMS Insurance Standards Bulletin Series--INFORMATION--
Extension of Limited Non-Enforcement Policy through 2020. March 25, 
2019. Available at: https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Limited-Non-Enforcement-Policy-Extension-Through-CY2020.pdf.
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    Except as otherwise provided for the proposed MLR requirements, the 
Departments also propose that the requirements discussed in these 
proposed rules would become effective for plan years (or in the 
individual market policy years) beginning on or after 1 year after the 
finalization of this rule. The Departments request feedback about this 
proposed timing. In particular, the Departments are interested in 
information and request comment from group health plans, health 
insurance issuers, and TPAs on the timing necessary to develop cost

[[Page 65491]]

estimation tools and machine-readable files.

B. Good Faith Special Applicability

    These proposed rules include a special applicability provision to 
address circumstances in which a group health plan or health insurance 
issuer, acting in good faith, makes an error or omission in its 
disclosures under these proposed rules. Specifically, a plan or issuer 
will not fail to comply with this section solely because it, acting in 
good faith and with reasonable diligence, makes an error or omission in 
a disclosure, provided that the plan or issuer corrects the information 
as soon as practicable. Additionally, to the extent such error or 
omission is due to good faith reliance on information from another 
entity, these proposed rules include a special applicability provision 
that holds the plan or issuer harmless, unless the plan or issuer 
knows, or reasonably should have known, that the information is 
incomplete or inaccurate. Under these proposed rules, if a plan or 
issuer has knowledge that such information is incomplete or inaccurate, 
the plan or issuer must correct the information as soon as practicable 
in accordance with paragraph (d)(4) of these proposed rules.
    Furthermore, these proposed rules also include a special 
applicability provision to account for circumstances in which a plan or 
issuer fails to make the required disclosures available due to its 
internet website being temporarily inaccessible. Accordingly, these 
proposed rules provide that a plan or issuer will not fail to comply 
with this section solely because, despite acting in good faith and with 
reasonable diligence, its internet website is temporarily inaccessible, 
provided that the plan or issuer makes the information available as 
soon as practicable. The Departments solicit comments on whether, in 
addition to these special applicability provisions, additional measures 
should be taken to ensure that plans and issuers that have taken 
reasonable steps to ensure the accuracy of required cost-information 
disclosures are not exposed to liability by virtue of providing such 
information as required under these proposed rules.

VII. Economic Impact Analysis and Paperwork Burden

A. Summary/Statement of Need

    This regulatory action is taken, in part, in light of Executive 
Order 13877 directing the Departments to issue an ANPRM, soliciting 
comments consistent with applicable law, requiring health care 
providers, health insurance issuers, and self-insured group health 
plans to provide or facilitate access to information about expected 
out-of-pocket costs for items or services to patients before they 
receive care. As discussed elsewhere in the preamble, the Departments 
have considered the issue, including consulting with stakeholders, and 
have determined that an NPRM would allow for greater specificity from 
commenters, who would be able to respond to specific proposals. In 
addition, despite the growing number of initiatives and the growing 
consumer demand for, and awareness of the need for pricing information, 
there continues to be a gap in easily accessible pricing information 
for consumers to use for health care shopping purposes. An NPRM enables 
the Departments to more quickly address this pressing issue. The 
proposed new requirements added to 26 CFR part 54, 29 CFR part 2590, 
and 45 CFR part 147 are aimed at addressing this gap, and are a 
critical part of the Administration's overall strategy for reforming 
health care markets by promoting transparency and competition, creating 
choice in the health care industry, and enabling consumers to make 
informed choices about their health care. By requiring group health 
plans and health insurance issuers to disclose to participants, 
beneficiaries, or enrollees (or their authorized representatives) such 
individual's cost-sharing information for covered items or services 
furnished by a particular provider, it provides them sufficient 
information to determine their potential out-of-pocket costs related to 
needed care and encourage them to consider price when making decisions 
about their health care.

B. Overall Impact

    The Departments have examined the impacts of this rule as required 
by Executive Order 12866 on Regulatory Planning and Review (September 
30, 1993), Executive Order 13563 on Improving Regulation and Regulatory 
Review (January 18, 2011), the Regulatory Flexibility Act (RFA) 
(September 19, 1980, Pub. L. 96-354), section 202 of the Unfunded 
Mandates Reform Act of 1995 (March 22, 1995, Pub. L. 104-4), Executive 
Order 13132 on Federalism (August 4, 1999), the Congressional Review 
Act (5 U.S.C. 804(2)), and Executive Order 13771 on Reducing Regulation 
and Controlling Regulatory Costs (January 30, 2017).
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
A regulatory impact analysis (RIA) must be prepared for rules with 
economically significant effects ($100 million or more in any 1 year).
    Section 3(f) of Executive Order 12866 defines a ``significant 
regulatory action'' as an action that is likely to result in a rule: 
(1) Having an annual effect on the economy of $100 million or more in 
any 1 year, or adversely and materially affecting a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or state, local or tribal governments or communities 
(also referred to as ``economically significant''); (2) creating a 
serious inconsistency or otherwise interfering with an action taken or 
planned by another agency; (3) materially altering the budgetary 
impacts of entitlement grants, user fees, or loan programs or the 
rights and obligations of recipients thereof; or (4) raising novel 
legal or policy issues arising out of legal mandates, the President's 
priorities, or the principles set forth in the Executive Order. A RIA 
must be prepared for major rules with economically significant effects 
($100 million or more in any 1 year), and a ``significant'' regulatory 
action is subject to review by the Office of Management and Budget 
(OMB). The Departments have concluded that this rule is likely to have 
economic impacts of $100 million or more in at least 1 year, and, 
therefore, meets the definition of ``significant rule'' under Executive 
Order 12866. Therefore, the Departments have provided an assessment of 
the potential costs, benefits, and transfers associated with this rule. 
In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by OMB.
    These proposed rules aim to enable participants, beneficiaries, or 
enrollees to obtain information about their potential cost-sharing 
liability for covered items and services that they might receive from a 
particular health care provider or providers by requiring plans and 
issuers to disclose cost-sharing information as described at 26 CFR 
54.9815-2715A, 29 CFR 2590.715-2715A, and 45 CFR 147.210. As discussed 
previously in these proposed rules, there has been a shift in the 
health care market from copayments to coinsurance, coupled with 
increases in

[[Page 65492]]

plans with high deductibles which generally require sizeable out-of-
pocket expenditures prior to receiving coverage under the terms of the 
plan or policy; therefore, participants, beneficiaries, or enrollees 
are now beginning to shoulder a greater portion of their health care 
costs. With access to accurate and actionable pricing information, 
participants, beneficiaries, and enrollees would be able to consider 
the costs of an item or service when making decisions related to their 
health care. The Departments are of the view that disclosure of pricing 
information is crucial for participants, beneficiaries, and enrollees 
to engage in informed health care decision-making.
    In addition, these proposals would require plans and issuers to 
make public negotiated rates of in-network providers and historical 
allowed amounts paid to out-of-network providers for all covered items 
and services. The Departments are of the view that these requirements 
would ensure that all consumers have the pricing information they need 
in a readily accessible format, which could inform their choices and 
have an impact on the disparities in health care costs. Public 
availability of information on in-network provider negotiated rates and 
allowed amounts for out-of-network services would allow consumers who 
wish to shop between plans to better understand what the cost of their 
care from a particular provider would be under each plan or policy. 
Furthermore, the Departments are of the view that the availability of 
price information to the public would empower the 28.5 million 
uninsured consumers \93\ to make more informed health care decisions. 
Public availability of this information would also allow third-party 
developers to provide consumers more accurate information on provider, 
plan and issuer value and ensure that such information is available to 
consumers where and when it is needed (for example, via integration 
into electronic health records, price transparency tools, and consumer 
mobile applications).
---------------------------------------------------------------------------

    \93\ This is based on 2017 uninsured data from Keith, K. ``Two 
New Federal Surveys Show Stable Uninsured Rate.'' Health Affairs 
Blog. September 13, 2018. Available at: https://www.healthaffairs.org/do/10.1377/hblog20180913.896261/full/.
---------------------------------------------------------------------------

1. Impact Estimates of the Transparency in Coverage Provisions and 
Accounting Table
    This NPRM sets forth proposed requirements for group health plans 
and health insurance issuers to disclose to a participant, beneficiary, 
or enrollee, his or her cost-sharing information for covered items or 
services from a particular provider or providers. This NPRM also 
includes proposals to require plans and issuers to disclose in-network 
provider-negotiated rates and historical allowed amounts for out-of-
network items and services provided by out-of-network providers through 
machine-readable files posted on a public internet website. In 
accordance with OMB Circular A-4, Table 1 depicts an accounting 
statement summarizing the Departments' assessment of the benefits, 
costs, and transfers associated with this regulatory action.
    The Departments are unable to quantify all benefits and costs of 
these proposed rules. The effects in Table 1 reflect non-quantified 
impacts and estimated direct monetary costs and transfers resulting 
from the provisions of these proposed rules for plans, issuers, 
beneficiaries, participants, and enrollees.

                        Table 1--Accounting Table
------------------------------------------------------------------------
                                Benefits
-------------------------------------------------------------------------
Non-Quantified:
     Provides consumers with a tool to determine their estimated
     out-of-pocket costs, potentially becoming more informed on the cost
     of their health care which could result in lower overall costs if
     consumers choose lower-cost providers or health care services.
     Potential increase in timely payments by consumers of
     medical bills as a result of knowing their expected overall costs
     prior to receiving services and having the ability to budget for
     expected health care needs.
     Potential profit gains by third-party mobile application
     developers and potential benefits to consumers through the
     development of mobile applications that may be more user-friendly
     and improve consumer access to cost information, potentially
     resulting in reductions in out-of-pocket costs.
     Potentially enable consumers shopping for coverage to
     understand the negotiated rates for providers in different group
     and individual health plans available to them and choose a plan
     that could minimize their out-of-pocket costs.
     States could potentially use the negotiated rate file to
     determine if premium rates are set appropriately.
     Potential reduction in cross-subsidization, which could
     result in lower prices as prices become more transparent.
     Public posting of negotiated rates could facilitate the
     review of anti-trust violations.
------------------------------------------------------------------------


 
                                                                       Low estimate    High estimate                     Discount rate
                               Costs:                                   (million)        (million)       Year dollar       (percent)      Period covered
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annualized Monetized ($/year)......................................           $231.8           $298.4             2019                7        2020-2024
rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
                                                                               224.5            286.5             2019                3        2020-2024
--------------------------------------------------------------------------------------------------------------------------------------------------------


 
 
-------------------------------------------------------------------------
Quantitative:
     Cost to plans and issuers to plan, develop, and build the
     proposed internet self-service tool and to provide negotiated in-
     network rates and out-of-network allowed amounts in machine-
     readable files, maintain appropriate security standards and update
     the machine-readable files per the proposed rules.
     Increase operating costs to plans and issuers as a result
     of training staff to use the internet self-service tool, responding
     to consumer inquiries, and delivering consumer's cost-sharing
     information and required notices.
     Cost to plans and issuers to review all the requirements in
     this proposal.
------------------------------------------------------------------------
Non-Quantified:
     Potential cost incurred by plans and issuers that wish to
     develop a mobile accessible version of their internet-based self-
     service tool. Potential increase in cyber security costs by plans
     and issuers to prevent data breaches and potential loss of
     personally identifiable information.
     Potential increase in out-of-pocket costs for consumers if
     providers increase prices or issuers shift those costs to consumers
     in the form of increased cost sharing other than increased
     deductibles.

[[Page 65493]]

 
     Potential costs to states to review and enforce provisions
     of the proposed rules.
     Potential increase in consumer costs if reductions in cross-
     subsidization are for uncompensated care, as this could require
     providers finding a new way to pay for those uncompensated care
     costs.
     Potential increase in health care costs if consumers
     confuse cost with quality and value of service.
     Potential costs to inform and educate consumers on the
     availability and functionality of internet self-service tool.
     Potential exposure of consumers to identity theft as a
     result of breaches and theft of personally identifiable
     information.
     Potential consumer confusion related to low health care
     literacy and the potential complexity of internet self-service
     tools.
     Potential cost to plans and issuers to a conduct quality
     control review of the information in the negotiated rate and out-of-
     network allowed amounts machine-readable files.
------------------------------------------------------------------------


 
                                                  Estimate                       Discount rate
                 Transfers:                      (million)       Year dollar       (percent)      Period covered
----------------------------------------------------------------------------------------------------------------
Federal Annualized Monetized ($/year).......             $9.3             2019                7        2020-2024
rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
                                                          9.5             2019                3        2020-2024
----------------------------------------------------------------------------------------------------------------
Other Annualized Monetized ($/year).........            150.6             2019                7        2020-2024
rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
                                                        153.7             2019                3        2020-2024
----------------------------------------------------------------------------------------------------------------


 
 
-------------------------------------------------------------------------
Quantitative:
     Transfers from the federal government to consumers in the
     form of increased premium tax credits by approximately $12 million
     per year beginning in 2021 as a result of estimated premium
     increases by issuers in the individual market to comply with these
     proposed rules.
     Transfer from consumers to issuers in the form of reduced
     MLR rebate payments in the individual and group markets by
     approximately $67 million per year by allowing issuers to take
     credit for ``shared savings'' payments in issuers' MLR
     calculations.
     Transfers from providers to consumers and issuers of
     approximately $128 million per year as a result of lower medical
     costs for issuers and consumers by allowing issuers to share with
     consumers the savings that result from consumers shopping for care
     from lower-cost providers.
------------------------------------------------------------------------
Non-Quantified:
     Potential transfer from providers to consumers facing
     collections to reduce the overall amounts owed to providers if they
     are able to use competitor pricing as a negotiating tool.
     Potential transfer from providers to consumers if there is
     an overall decrease in health care costs due to providers reducing
     prices to compete for customers.
     Potential transfer from consumers to providers if there is
     an increase in health care costs if providers and services increase
     their negotiated rates to match those of competitors.
     Potential transfer from issuers to consumers if premiums go
     down and potential transfer from consumers to issuers if premiums
     increase.
     Potential transfer from issuers to consumers and the
     federal government in the form of decreased premiums and premium
     tax credits as a result of issuers adopting provisions encouraging
     consumers to shop for services from lower-cost providers and
     sharing the resulting savings with consumers.
------------------------------------------------------------------------

    Table 1 provided the anticipated benefits and costs (quantitative 
and non-quantified) to plans and issuers to disclose cost-sharing 
information as described at 26 CFR 54.9815-2715A, 29 CFR 2590.715-
2715A, and 45 CFR 147.210 and make public negotiated rates of in-
network providers and out-of-network allowed amounts paid for covered 
items and services. The following information describes benefits and 
costs--qualitative and non-quantified--to plans and issuers separately 
for these two requirements.
2. Proposed Requirements for Disclosing Cost-Sharing Information to 
Participant, Beneficiaries, or Enrollees Under 26 CFR 54.9815-2715A(b), 
29 CFR 2590.715-2715A(b), and 45 CFR 147.210(b)
Costs
    In paragraph (b) of the proposed rules, the Departments are 
proposing to require group health plans and health insurance issuers to 
disclose certain relevant information in accordance with a prescribed 
method and format requirements, upon the request of a participant, 
beneficiary or enrollee (or an authorized representative on behalf of 
such individual). Under this requirement, the Departments are proposing 
seven content elements, which are described in paragraph (b)(1) of the 
proposed rules and discussed earlier in this preamble. The quantitative 
cost associated with meeting these requirements are detailed in the 
corresponding information collection requirement (ICR) that is 
discussed later in this preamble.
    In addition to the costs described in the corresponding ICR, the 
Departments recognize there may be other costs associated with this 
requirement that are difficult to quantify given the lack of 
information and data. For example, while the Departments are of the 
view that the overall effect of this proposal would lower health care 
costs, the Departments recognize that price transparency may have the 
opposite effect because in some markets where pricing is very 
transparent, pricing can narrow and average costs can increase.\94\ 
Additionally, states may incur additional costs to review and enforce 
the requirements proposed in this rule.
---------------------------------------------------------------------------

    \94\ Kutscher, B. ``Report: Consumers demand price transparency, 
but at what cost?'' Modern Healthcare. June 2015. Available at: 
https://www.modernhealthcare.com/article/20150623/NEWS/150629957/consumers-demand-price-transparency-but-at-what-cost.
---------------------------------------------------------------------------

    As described in the corresponding ICR section, the Departments 
assume most self-insured group health plans would work with a TPA to 
meet the requirements of these proposed rules. The Departments 
estimated cost assumes in the high-range estimate that all health 
insurance issuers and TPAs (on behalf of self-insured group health 
plans) would need to develop and build their internet-based self-
service tools from scratch. However, the Departments also provide a 
low-range estimate assuming that most plans, issuers, and TPAs would 
modify an existing web-based tool. The Departments recognize that some 
plans, issuers, and TPAs may also voluntarily elect to develop a mobile 
application, which would result in additional costs. Additionally, TPAs 
generally work with multiple self-insured group health plans, and as a

[[Page 65494]]

result, the costs for each TPA and self-insured group health plan may 
be lower to the extent they are able to leverage any resulting 
economies of scale.
    Moreover, health care data breach statistics clearly show there has 
been an upward trend in data breaches over the past 9 years, with 2018 
having more reported data breaches than any other year since records 
first started being published. Between 2009 and 2018, there have been 
2,546 health care data breaches resulting in the theft and exposure of 
189,945,874 health care records, equating to more than 59 percent of 
the United States population. Health care data breaches are now being 
reported at a rate of more than one per day.\95\ Based on this 
information, the Departments recognize the requirements of these 
proposed rules provide additional opportunities for health care data 
breaches. Plans and issuers may incur additional expenses to ensure a 
consumer's PHI and personally identifiable information (PII) is secure 
and protected. Additionally, as consumers accessing the internet-based 
self-service tool may be required to input personal data to access the 
consumer-specific pricing information, consumers may be exposed to 
increased risk and experience identity theft as a result of breaches 
and theft of PII.
---------------------------------------------------------------------------

    \95\ See Report on Healthcare Data Breach Statistics, available 
at: https://www.hipaajournal.com/healthcare-data-breach-statistics/.
---------------------------------------------------------------------------

Benefits
    Informed Consumer. A consumer armed with pricing information could 
potentially have greater control over their own health care spending, 
which could foster competition among providers resulting in less 
disparity in health care prices or a reduction in health care prices. 
Consumers who use this tool would be able to access their cost sharing 
paid to date, their progress toward meeting their accumulators such as 
deductibles and out-of-pocket limits, their estimated cost-sharing 
liability for an identified item or service, the negotiated rates with 
in-network providers for covered items and services, and the out-of-
network allowed amounts for covered items and services. Additionally, 
consumers might gain some peace of mind in knowing where they stand 
financially with regard to their current health care needs and have the 
ability to plan ahead for any items and services they could require in 
the near future. The Departments are of the view that access to this 
information is essential to enable consumers to make informed decisions 
regarding specific services or treatments, budget appropriately to pay 
any out-of-pocket expenses, and determine what impact any change in 
providers or items or services would have on the cost of a particular 
service or treatment.
    Consumers may become more cost conscious. The Departments are of 
the view that consumers may begin to focus on costs of services because 
under this proposal, plans and issuers would be required to disclose 
cost-sharing information that puts consumers' cost-sharing liability in 
the context necessary for truly cost-conscious decision-making. 
Consumers may know they have a coinsurance of 20 percent for an item or 
service, but many are unaware of what dollar amount of which they will 
be responsible for paying 20 percent. Knowing that dollar amount could 
motivate consumers to seek lower-cost providers and services. As 
discussed earlier in the preamble, there has been recent evidence in 
New Hampshire and Kentucky that supports the Departments' assumption 
that having access to pricing information, along with currently 
available information on provider quality and incentives to shop for 
lower prices, can result in consumers choosing providers with lower 
costs for items and services, thus lowering overall health care costs. 
The Departments acknowledge that this may only hold true if cost 
sharing varies between providers. Cost sharing in HMOs and Exclusive 
Provider Organizations (EPOs) generally is through fixed copayment 
amounts regardless of the provider who furnishes a covered item or 
service and, therefore, the proposed rules would provide little 
incentive for consumers to choose less costly providers in this 
context.
    Timely Payment of Medical Bills. The Departments anticipate that 
consumers with access to the information provided in response to the 
proposed rules would be more likely to pay their bills on time. A 
recent Transunion survey found that 79 percent of respondents said they 
would be more likely to pay their bills in a timely manner if they had 
price estimates before getting care.\96\ In addition, a non-profit 
hospital network, found that the more information they shared with 
patients, the better prepared those patients are for meeting their 
responsibilities. They further note that they find it valuable to 
explain to patients what their benefits are, provide an estimate of 
what the patient might owe for a service, and discuss any pre-payment 
requirements so that the patient understands what to expect during the 
billing process and what their options are. The hospital network 
reports that providing price estimates to patients has resulted in 
increased point of service cash collections from $3 million in 2010 to 
$6 million in 2011.\97\
---------------------------------------------------------------------------

    \96\ Kutscher, B. ``Report: Consumers demand price transparency, 
but at what cost?'' Modern Healthcare. June 2015. https://www.modernhealthcare.com/article/20150623/NEWS/150629957/consumers-demand-price-transparency-but-at-what-cost.
    \97\ HFMA Executive Roundtable: Reimagining Patient Access. 
December 2015. Available at: https://api.hfma.org/Content.aspx?id=43731.
---------------------------------------------------------------------------

    Increased Competition Among Providers. The Departments are of the 
view that the requirements of these proposed rules would lead to 
competition among providers as consumers would be aware of and compare 
the out-of-pocket cost of a covered item or service prior to receiving 
that item or service, which might force higher-cost providers to lower 
their prices in order to compete for the price sensitive consumer.
3. Proposed Requirements for Public Disclosure of In-Network Negotiated 
Rates and Historical Payments of Out-of-Network Allowed Amounts Through 
Machine-Readable Files Under 26 CFR 54.9815-2715A(c), 29 CFR 2590.715-
2715A(c), and 45 CFR 147.210(c).
Costs
    In paragraph (c) of these proposed rules, the Departments are 
proposing to require that group health plans and health insurance 
issuers make available to the public on an internet website two digital 
files in a machine-readable format. The first file (the Negotiated Rate 
File) would include information regarding rates negotiated with in-
network providers. The second file (the Allowed Amount File) would 
publish data showing allowed amounts for covered items and services 
furnished by out-of-network providers over a 90-day period. Plans and 
issuers would be required to make the required information available in 
accordance with certain method and format requirements described at 
paragraph (c)(2) of the proposed rules and update the files monthly. 
The quantitative cost associated with meeting the proposed requirements 
are detailed in the associated ICR section.
    Non-Quantified Costs for Public Disclosure of In-network Negotiated 
Rates: In addition to the costs described in the associated ICR, the 
Departments recognize there may be other costs associated with the 
requirement to make in-network negotiated rates available publicly that 
are difficult to quantify given the current lack of information and 
data. While the Departments are of the view that the overall effect of 
this

[[Page 65495]]

proposal would lower health care prices, there are instances in very 
transparent markets, where pricing can narrow and average costs can 
increase.\98\ The Departments also recognize that plans and issuers may 
experience additional costs (for example, quality control reviews) to 
ensure they comply with the requirements of these proposed rules. In 
addition, the Departments are aware that information disclosures 
allowing competitors to determine the rates their competitors are 
charging may dampen each competitor's incentive to offer a low price 
\99\ or result in a higher price equilibrium. While health insurance 
issuers with the highest negotiated rates may see a decrease in their 
negotiated rates, as their providers respond to consumer and smaller 
health insurance issuers' concerns of paying more for the same item and 
service, issuers with the lowest negotiated rates may see their lower 
cost providers adjust their rates upward to become equal across the 
board. However, most research suggests that when better price 
information is available, prices for goods sold to consumers fall. For 
example, in an advertising-related study, researchers found that the 
act of advertising the price of a good or service is associated with 
lower prices.\100\
---------------------------------------------------------------------------

    \98\ Kutscher, B. ``Report: Consumers demand price transparency, 
but at what cost?'' Modern Healthcare. June 2015. Available at: 
https://www.modernhealthcare.com/article/20150623/NEWS/150629957/consumers-demand-price-transparency-but-at-what-cost.
    \99\ Koslov, T., Jex, E. ``Price transparency or TMI?'' 
Available at: https://www.ftc.gov/news-events/blogs/competition-matters/2015/07/price-transparency-or-tmi.
    \100\ Austin, D., Gravelle, J. ``Report: Does Price Transparency 
Improve Market Efficiency? Implications of Empirical Evidence in 
Other Markets for the Health Sector.'' CRS Report for Congress. June 
2007. Available at: https://fas.org/sgp/crs/secrecy/RL34101.pdf.
---------------------------------------------------------------------------

    A potential additional non-quantified cost could be the cost to 
remove ``gag clauses'' from contracts between health insurance issuers 
and providers. Contracts between issuers and providers often include a 
gag clause, which prevents issuers from disclosing negotiated rates. 
The Departments recognize that issuers and providers may incur a one-
time expense for their attorneys to review and update their provider 
contracts to remove any relevant gag clause.
    Another potential cost is the impact on a plan's or issuer's 
ability or incentive to establish a robust network of providers. A 
health insurance provider network is a group of health care providers 
that have contracted with a group health plan or health insurance 
issuer to provide care at a specified price the provider must accept as 
payment in full. Many times, plans and issuers want consumers to use 
the providers in their network because these providers have met the 
health plan's quality standards and agreed to accept a negotiated rate 
for their services in exchange for the patient volume they will receive 
by being part of the plan's network.\101\ Some plans and issuers offer 
a narrow network. Narrow networks operate with a smaller provider 
network, meaning a consumer will have few choices when it comes to in-
network health care providers but often lower monthly premiums and out-
of-pocket costs.\102\ The Departments recognize that making negotiated 
rates public may create a disincentive for plans and issuers to 
establish a contractual relationship with a provider (including in 
narrow networks) because providers may be unwilling to give a discount 
to issuers and plans when that discount will be made public. The 
requirements of this proposal could also result in a reduction in 
revenue for those smaller health insurance issuers that are unable to 
pay higher rates to providers and may require them to narrow their 
provider networks, which could affect access to care for some 
consumers. Due to a smaller issuer's potential inability to pay 
providers with higher rates, smaller issuers may further narrow their 
networks to include only providers with lower rates, possibly making it 
more difficult for smaller issuers to fully comply with network 
adequacy standards described at 45 CFR 156.230 or applicable state 
network adequacy requirements.
---------------------------------------------------------------------------

    \101\ See Davis, E. ``Health Insurance Provider Network 
Overview'' Verywell Health, August 2019. Available at: https://www.verywellhealth.com/health-insurance-provider-network-1738750.
    \102\ Anderman, T ``What to Know About Narrow Network Health 
Insurance Plans'', Consumer Reports, November 2018. Available at: 
https://www.consumerreports.org/health-insurance/what-to-know-about-narrow-network-health-insurance-plans/.
---------------------------------------------------------------------------

    Non-Quantified Cost for Public Disclosure of Out-of-network Allowed 
Amounts: In addition to the costs described in the associated ICR and 
the previous analysis related to the public disclosure of negotiated 
rates, the Departments recognize that there may be other costs 
associated with the requirement to make historical payments of out-of-
network allowed amounts publicly available that are difficult to 
quantify, given the current lack of information and data. For example, 
as a result of balance billing by providers, plans and issuers may be 
forced to increase their allowed amounts (such as the usual and 
customary and reasonable amount) to meet the demands of the price 
sensitive consumer.
    Furthermore, while plans and issuers must de-identify data (such as 
claim payment information for a single provider) and ensure certain 
sensitive data are adequately protected, unauthorized disclosures of 
PHI and PII may increase as a result of manual preparation and 
manipulation of the required data.
Benefits
    The Departments are of the view that requiring plans and issuers to 
make available information regarding negotiated in-network provider 
rates and 90-days of historical allowed amount data for out-of-network 
allowed amounts for covered items and services to the public would 
benefit plans and issuers, regulatory authorities, consumers, and the 
overall health care market.
    Group Health Plans and Health Insurance Issuers: Plans and issuers 
may benefit from these proposals because under these proposed rules a 
plan or issuer would know the negotiated rates of their competitors. 
This may allow plans and issuers that are paying higher rates for the 
same items or services to negotiate with certain providers to lower 
their rates, thereby lowering provider reimbursement rates. The 
Departments acknowledge, however, as noted in the costs section earlier 
in this preamble, that knowledge of other providers' negotiated rates 
could also drive up rates if a provider discovers it is currently being 
paid less than other providers by a plan or issuer and, thereby, 
negotiates higher rates.
    In addition, these proposed rules may result in more plans and 
issuers using a reference pricing structure. Under this structure, 
participants, beneficiaries, or enrollees who select a provider 
charging above the reference price (or contribution limit) must pay the 
entire difference and these differences do not typically count toward 
that individual's deductible or the annual out-of-pocket limit. Plans 
and issuers may want to use a reference pricing structure to pass on 
any potential additional costs associated with what they can identify 
as higher cost providers to the participant, beneficiary, or enrollee. 
The Departments recognize that reference pricing might not impact every 
consumer. For example, CalPERS provides exceptions from reference 
pricing when a member lives more than 50 miles from a facility that 
offers the service below the price limit. It also exempts the patient 
if the patient's physician gives a clinical justification

[[Page 65496]]

for using a high-priced facility or hospital setting. Another example 
is a business with a self-insured group health plan that exempts 
laboratory tests for patients with a diagnosis of cancer from its 
reference pricing program. However, reference pricing has generally 
been shown to result in price reductions, not merely slowdowns in the 
rate of price growth. For example, in the first 2 years after 
implementation, reference pricing saved CalPERS $2.8 million for joint 
replacement surgery, $1.3 million for cataract surgery, $7.0 million 
for colonoscopy, and $2.3 million for arthroscopy.\103\
---------------------------------------------------------------------------

    \103\ Boynton, A., Robinson, J. ``Appropriate Use of Reference 
Pricing Can Increase Value.'' Health Affairs Blog. June 2015. 
Available at: https://www.healthaffairs.org/do/10.1377/hblog20150707.049155/full/.
---------------------------------------------------------------------------

    Regulatory Authorities: In many states, health insurance issuers 
must obtain prior approval for rate changes from the state's Department 
of Insurance. Regulatory authorities such as state Departments of 
Insurance might benefit from this proposal because knowledge of 
provider negotiated rates and historical out-of-network allowed amounts 
paid to out-of-network providers could support determinations of 
whether premium rates, including requests for premium rate increases, 
are reasonable and justifiable.
    Consumers: Access to the negotiated rates between plans and issuers 
and in-network providers and the amount plans and issuers paid out-of-
network providers for covered items and services would allow consumers 
to understand the impact of their choices for health care coverage 
options and providers on the cost of a particular service or treatment. 
Introducing this information into the consumer's health care decision-
making process would give the consumer a greater degree of control over 
their own health care costs. Furthermore, having access to publicly 
available out-of-network allowed amounts would provide consumers who 
are shopping for coverage the ability to compare the different plan or 
issuer payments for items and services, including items and services 
from providers that might be out-of-network. While the Departments are 
of the view that consumers would benefit from the requirements of this 
proposal, the Departments recognize that utilizing the required 
information would not be appropriate or reasonable in an emergency 
situation.
    Overall Health Insurance Market: This proposal may induce an 
uninsured person to obtain health insurance, depending on premium 
rates, after learning the actual dollar difference between the usual 
and customary rates that they pay for items and services as an 
uninsured consumer and the negotiated rates and out-of-network allowed 
amounts under the terms of a group health plan or health insurance 
issuer's policy. In addition, this proposal might force providers to 
lower their rates for certain items and services in order to compete 
for the price sensitive consumer or plan; although the immediate 
payment impact would be categorized as a transfer, any accompanying 
health and longevity improvements would be considered as benefits (and 
any accompanying increases in utilization would, thus, be considered 
costs). And, as discussed elsewhere in this preamble, New Hampshire's 
HealthCost website was found to reduce the cost of medical imaging 
procedures by 5 percent. The study further found that patients saved 
approximately $7.5 million dollars on X-Ray, CT, and MRI scans over the 
5 year period studied (dollars are stated in 2010 dollars).\104\
---------------------------------------------------------------------------

    \104\ Brown, Z. ``Equilibrium Effects of Health Care Price 
Information.'' 100 Rev. of Econ. and Stat. 1. July 16, 2018. 
Available at: https://www-personal.umich.edu/~zachb/
zbrown_eqm_effects_price_transparency.pdf.)
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4. Medical Loss Ratio (45 CFR 158.221)
    In these proposed rules, HHS proposes to amend Sec.  158.221 to 
allow health insurance issuers that share with consumers savings that 
result from consumers shopping for lower-cost, higher-value services, 
to take credit for such ``shared savings'' payments in issuers' MLR 
calculations. For this impact estimate, HHS assumed that only 
relatively larger issuers (with at least 28,000 enrollees) that have 
consistently reported investment costs in health information technology 
on the MLR annual reporting form (of at least $6.77 per enrollee, which 
represents issuers with 70 percent of total reported commercial market 
health information technology investment) or issuers that operate in 
states that currently (three states in 2019) or may soon support 
``shared savings'' plan designs would initially choose to offer plan 
designs with a ``shared savings'' component, that such issuers would 
share, on average, 50 percent of the savings with consumers (which 
would increase the MLR numerator under the proposed rule), and that 
issuers whose MLRs were previously below the applicable MLR standards 
would use their retained portion of the savings to lower consumers' 
premiums in future years (which would reduce the MLR denominator). 
Based on 2014-2017 MLR and other data, HHS estimates that this proposal 
could reduce MLR rebate payments from issuers to consumers by 
approximately $67 million per year, while facilitating savings that 
would result from lower medical costs of approximately $128 million per 
year for issuers and consumers (some of which would be retained by 
issuers, shared directly with consumers, or used by issuers to reduce 
future premium rates).
5. Summary of Estimated Transfers
    The Departments assume that because 2020 premium rates are nearly 
finalized, that issuers will not be able to charge for the expenses 
incurred due to these proposed rules in the 2020 rates. Because issuers 
will not have had an opportunity to reflect the 2020 development costs 
in the 2020 premium rates, some issuers may apply margin to the assumed 
ongoing expenses as they develop premium rates for 2021 and after. The 
Departments estimate premiums for the fully-insured markets would be 
$450 billion for 2021, which includes the individual, small group, and 
large group markets.\105\ The Departments estimate that the ongoing 
expense represents approximately 0.03 percent of premiums for the 
fully-insured market. Assuming this level of premium increase in the 
individual market, premium tax credit outlays are estimated to increase 
by about $12 million per year beginning in 2021. Given that 2021 
premium tax credit outlays are expected to be $43 billion, the 
Departments expect the estimated increase of $12 million to have 
minimal impacts on anticipated enrollment. The Departments note that 
any impact of these proposed rules on provider prices has not been 
estimated, as limited evidence has generally shown not much of an 
effect on health care prices. As a result, the Departments are assuming 
that the overall impact will be minimal. However, there is a large 
degree of uncertainty regarding the effect on prices so actual 
experience could differ.
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    \105\ 2017 earned premium data was taken from amounts reported 
for MLR, and trended forward using overall Private Health Insurance 
trend rates from the NHE projections.
---------------------------------------------------------------------------

C. Regulatory Review Costs

    Affected entities will need to understand the requirements of these 
proposed rules, if finalized, before they can comply. Group health 
plans and health insurance issuers are responsible for ensuring 
compliance with these proposed rules. However, as assumed elsewhere, it 
is expected that issuers and TPAs, and only the largest self-insured 
plans will likely incur this burden. The issuers and TPAs will then

[[Page 65497]]

provide plans with rule compliant services. Therefore, the burden for 
the regulatory review is estimated to be incurred by the 1,959 issuers 
and TPAs.
    If regulations impose administrative costs on private entities, 
such as the time needed to read and interpret these proposed rules, if 
finalized, the Departments should estimate the cost associated with 
regulatory review. Due to the uncertainty involved with accurately 
quantifying the number of entities that will review and interpret these 
proposed rules, the Departments assume that the total number of health 
insurance issuers and TPAs that would be required to comply with these 
rules would be a fair estimate of the number of entities affected.
    The Departments acknowledge that this assumption may understate or 
overstate the costs of reviewing these proposed rules. It is possible 
that not all affected entities will review these rules, if finalized, 
in detail, and may seek the assistance of outside counsel to read and 
interpret them. For these reasons, the Departments are of the view that 
the number of health insurance issuers and TPAs would be a fair 
estimate of the number of reviewers of these proposed rules. The 
Departments welcome any comments on the approach in estimating the 
number of affected entities that will review and interpret these 
proposed rules, if finalized.
    Using the wage information from the BLS for a Computer and 
Information Systems Manager (Code 11-3021) and a Lawyer (Code 23-1011) 
the Departments estimate that the cost of reviewing this rule is 
$285.66 per hour, including overhead and fringe benefits.\106\ Assuming 
an average reading speed, the Departments estimate that it would take 
approximately 4 hours for the staff to review and interpret these 
proposed rules (2 hours each for a lawyer and an Information Systems 
Manager), if finalized; therefore, the Departments estimate that the 
cost of reviewing and interpreting these proposed rules, if finalized, 
for each health insurance issuer and TPA is approximately $1,142.64. 
Thus, the Departments estimate that the overall cost for the estimated 
1,959 health insurance issuers and TPAs is $2,238,431.76 ($1,142.64 x 
1,959 total number of estimated health insurance issuers and TPAs).
---------------------------------------------------------------------------

    \106\ Wage information is available at https://www.bls.gov/oes/current/oes_nat.htm.
---------------------------------------------------------------------------

D. Regulatory Alternatives Considered

    In developing the policies contained in these proposed rules, the 
Departments considered alternatives to the presented proposals. In the 
following paragraphs, the Departments discuss the key regulatory 
alternatives that the Departments considered.
1. Limiting Cost-Sharing Disclosures to Certain Covered Items and 
Services and Certain Types of Group Health Plans and Health Insurance 
Issuers
    These proposed rules require plans and issuers to disclose cost-
sharing information for any requested covered item or service. The 
Departments considered limiting the number of items or services for 
which plans and issuers would be required to provide cost-sharing 
information to lessen the burden on these entities. However, limiting 
disclosures to a specified set of items and services reduces breadth 
and availability of useful cost estimates to determine anticipated 
cost-sharing liability, limiting the impact of price transparency 
efforts by reducing the incentives to lower prices and provide higher-
quality care. The Departments assume that plans (or TPAs on their 
behalf) and issuers, whether for a limited set of covered items and 
services or all covered items and services, would be deriving these 
data from the same data source. Because the data source would be the 
same, the Departments assume that any additional burden to produce the 
information required for all covered items and services, as opposed to 
a limited set of covered items and services, would be minimal. The 
Departments are of the view that this minimal additional burden is 
outweighed by the potentially large, albeit unquantifiable, benefit to 
consumers of having access to the required pricing information for the 
full breadth of items and services covered by their plan or issuer. For 
these reasons, in order to achieve lower health care costs and reduce 
spending through increased price transparency, the Departments propose 
to require cost-sharing information be disclosed for all covered items 
and services.
    The Departments also considered implementing a more limited 
approach by imposing requirements only on individual market plans and 
fully-insured group coverage. However, the Departments are concerned 
that this limited approach might encourage plans to simply shift costs 
to sectors of the market where these proposed requirements would not 
apply and where consumers have less access to pricing information. The 
Departments are of the view that consumers should be able to enjoy the 
benefits of greater price transparency and that a broader approach will 
have the greatest likelihood of controlling the cost of health care 
industry-wide. Indeed, if the requirements of these proposed rules were 
limited to only individual market plans, the Departments estimate only 
13,700,000 participants, beneficiaries, and enrollees would receive the 
intended benefits of these rules. In contrast, under these proposed 
rules, a total of 193,500,000 participants, beneficiaries, and 
enrollees would receive the intended benefits. The Departments 
acknowledge that limiting applicability of the requirements of these 
proposed rules to the individual market would likely reduce the overall 
cost and hour burden estimates identified in the corresponding ICRs 
section, but the overall cost and burden estimates per covered life 
would increase. Further, there is a great deal of overlap in health 
insurance issuers that offer coverage in both the individual and the 
group markets. Issuers offering coverage in both markets would be 
required to comply with the requirements of these proposed rules even 
if the Department limited the applicability to only the individual 
market. Because TPAs provide administrative functionality for self-
insured group health care coverage, those non-issuer TPA entities would 
not incur any hourly burden or associated costs because they do not 
have any overlap between the individual and group markets. The 
Departments are of the view that the benefits of providing consumer 
pricing information to an estimated total 193,500,000 participants, 
beneficiaries, and enrollees outweigh the increased costs and burden 
hours that a subset of plans and issuers (and TPAs on behalf of self-
insured group health plans) that are not active participants in the 
individual market would incur. The Departments have determined the 
benefits of expanding the applicability of these proposed rules would 
not only expand access to health care pricing information to a greater 
number of individuals, but that any developed economies of scale would 
have a much greater likelihood of achieving the goal of controlling the 
cost of health care industry-wide.
2. Requirement To Post Machine-Readable Files of Negotiated Rates and 
Historical Data for Out-of-Network Allowed Amount Payments Made to Out-
of-Network Providers to a Public Website
    In proposing the requirement that group health plans and health 
insurance issuers post their negotiated rates and historical data for 
out-of-network allowed amount payments made to out-of-network providers 
on a publicly accessible website, the Departments considered requiring 
payers to submit

[[Page 65498]]

the internet addresses for the machine-readable files to CMS, and CMS 
would make the information available to the public. A central location 
could allow the public to access negotiated rate information and 
historical data for out-of-network allowed amounts in one centralized 
location, reducing confusion and increasing accessibility. Posting 
negotiated rates and historical data for out-of-network allowed amounts 
in a central location may also make it easier to post available quality 
information alongside price information. However, to provide 
flexibility and reduce burden, the Departments are of the view that 
plans and issuers should determine where to post negotiated rate and 
out-of-network allowed amount information rather than prescribing the 
location the information is to be disclosed. Further, requiring payers 
to submit internet addresses for their machine-readable files to CMS 
would result in additional burden to the extent plans and issuers 
already post this information in a different centralized location.
3. Frequency of Updates to Machine-Readable Files
    In proposing paragraph (c) of these proposed rules, the Departments 
considered requiring more frequent updates (within 10 calendar days of 
new rate finalization) to the negotiated rates and out-of-network 
allowed amounts. More frequent updates would provide a number of 
benefits for the patients, providers, and the public at large. 
Specifically, such a process could ensure the public has access to the 
most up-to-date rate information so that consumers can make the most 
meaningful, informed decisions about their health care utilization. 
Requiring group health plans and health insurance issuers to update the 
machine-readable files more frequently would result in increased 
burdens and costs for those affected entities. With respect to the 
Negotiated Rate File, the Departments estimate that requiring updates 
within 10 calendar days of rate finalization would result in each plan, 
issuer, or TPA (on behalf of a self-insured group health plan) 
incurring an annual hour burden of 1,110 hours with an associated 
equivalent cost of $110,290. Based on recent data the Departments 
estimate a total 1,959 entities--1,754 issuers \107\ and 205 TPAs 
\108\--will be responsible for implementing the proposals of these 
rules. For all 1,754 health insurance issuers and 205 TPAs, the total 
hour burden would be 2,174,490 hours with and associated equivalent 
annual cost of $216,057,326. As discussed in the corresponding ICR, 
requiring a less frequent 30 calendar day update would reduce the 
annual hour burden for each entity to 360 hours with an associated 
equivalent cost of $35,770. For all 1,754 health insurance issuers and 
205 TPAs, the total hour burden is reduced to 705,240 hours with and 
associated equivalent annual cost of $70,072,646. With respect to the 
Allowed Amount File, the Departments estimate that requiring updates 
within 10 calendar days of rate finalization would result in each plan, 
issuer, or, TPA (on behalf of a self-insured group health plan) 
incurring an annual hour burden of 481 hours with an associated 
equivalent cost of $44,952. For all 1,754 health insurance issuers and 
205 TPAs, the total hour burden would be 942,279 hours with and 
associated equivalent annual cost of $88,061,046. As discussed in the 
corresponding ICR, requiring a less frequent update would reduce the 
annual hour burden for each plan, issuer, and TPA to 156 hours with an 
associated equivalent cost of $14,579 per file. For all 1,754 health 
insurance issuers and 205 TPAs, the total hour burden is reduced to 
305,604 hours with an associated equivalent annual cost of $28,560,339. 
By proposing monthly updates to the machine-readable files, rather than 
updates every 10 calendar days, the Departments have chosen to strike a 
balance between placing an undue burden on plans and health insurance 
issuers and assuring the availability of accurate information.
---------------------------------------------------------------------------

    \107\ 2018 MLR Data Trends.
    \108\ Non-issuer TPAs based on data derived from the 2016 
Benefit Year reinsurance program contributions.
---------------------------------------------------------------------------

4. Proposed File Format Requirements
    In 26 CFR 54.9815-2715A(c)(2), 29 CFR 2590.715-2715A(c)(2), and 45 
CFR 147.210(c)(2), these proposed rules require payers to post 
information in two machine-readable files. A machine-readable file is 
defined as a digital representation of data or information in a file 
that can be imported or read into a computer system for further 
processing without human intervention, while no semantic meaning is 
lost. These proposed rules would require each machine-readable file to 
use a non-proprietary, open format. The Departments considered 
requiring payers to post negotiated rates and plan-specific historical 
charges paid for out-of-network services for all items and services 
using a specific file format, namely JSON. However, the Departments are 
of the view that being overly prescriptive in the file type would 
impose an unnecessary burden on payers despite the advantages of JSON, 
namely being downloadable and readable for many health care consumers, 
and the potential to simplify the ability of price transparency tool 
developers to access the data. Therefore, the Departments have proposed 
that group health plans and health insurance issuers post the 
negotiated rate and out-of-network allowed amount information in two 
distinct machine-readable files using a non-proprietary, open format to 
be identified by the Departments in future guidance.
    In addition, the Departments considered proposing that plans and 
issuers provide the specific out-of-network allowed amount methodology 
needed for consumers to determine out-of-pocket liability for services 
by providers not considered to be in-network by the group health plan 
or health insurance issuer, rather than historical data on paid out-of-
network claims. However, the Departments understand providing a formula 
or methodology for calculating a provider's out-of-network allowed 
amount does not provide the data users need in an easy-to-use machine-
readable format. The Departments determined that providing monthly data 
files on amounts paid by plans and issuers over a 90-day period (by 
date of service with a 90-day lag) for items and services provided by 
out-of-network providers would enable users to more readily determine 
what costs a plan or issuer may pay toward items or services obtained 
out-of-network. Because a plan or issuer does not have a contract with 
an out-of-network provider that establishes negotiated rates, the plan 
or issuer cannot anticipate what that provider's charges will be for 
any given item or service; therefore, the plan or issuer cannot provide 
an estimate of out-of-pocket costs to the consumer.
    Providing data on the costs covered by a plan or issuer for 
specific items and services allows a consumer to anticipate what their 
plan or issuer would likely contribute to the costs of items or 
services obtained from out-of-network providers and allows the consumer 
to estimate his or her out-of-pocket costs by subtracting that amount 
from the cost of the out-of-network services. Historical out-of-network 
allowed amount data will provide increased price transparency for 
consumers, and the burdens and costs related to producing these data 
are not considered to be significantly higher than that associated with 
producing the methodology for determining allowed amounts for payments 
to out-of-network providers. Given these circumstances, the Departments 
have proposed that payers provide historical allowed amount data for 
out-of-network covered

[[Page 65499]]

items or services furnished by a particular out-of-network provider 
during the 90-day time period that begins 180 days prior to the 
publication date of the Allowed Amount File, rather than requiring 
plans and issuers to report their methodology or formula for 
calculating the allowed amounts for out-of-network items and services.
5. Proposal To Require Both Disclosure of Cost-Sharing Information to 
Participants, Beneficiaries, and Enrollees and Publicly-Posted Machine-
Readable Files With Negotiated Rates and Out-of-Network Allowed Amounts
    The Departments considered whether proposing that group health 
plans and health insurance issuers be required to disclose cost-sharing 
information through a self-service tool or in paper form to 
participants, beneficiaries, or enrollees (or their authorized 
representatives) so that they may obtain an estimate of their cost-
sharing liability for covered items and services and publicly-posted 
machine-readable files containing data on in-network negotiated rates 
and historical out-of-network allowed amounts would be duplicative. The 
requirement to disclose cost-sharing information to participants, 
beneficiaries, or enrollees proposed in these rules would require plans 
and issuers to provide consumer-specific information on potential cost-
sharing liability to enrolled consumers, complete with information 
about their deductibles, copays, and coinsurance. However, cost-sharing 
information for these plans and coverage would not be available or 
applicable to consumers who are uninsured or shopping for plans pre-
enrollment. Data disclosed to participants, beneficiaries, and 
enrollees would also not be available to third parties who are 
interested in creating consumer tools to assist both uninsured and 
insured consumers with shopping for the most affordable items or 
services. Limiting access to data to a subset of consumers would not 
promote the transparency goals of these proposed rules, and would 
reduce the potential for these proposed rules to drive down health care 
costs by increasing competition.
    As discussed in more detail in the corresponding ICR sections of 
this preamble, the Departments estimate that the high-end average 3-
year hour burden and cost to develop only the internet-based self-
service tool, including the initial tool build and maintenance, 
customer service training, and customer assistance burdens and costs. 
The Departments estimate the total hour burden per group health plan, 
health insurance issuer, or TPA (on behalf of a self-insured group 
health plan) would be approximately 956 hours, with an associated 
equivalent average annual cost of approximately $168,804. For all 1,754 
health insurance issuers and 205 TPAs, the Departments estimate the 
total average annual hour burden, over a 3-year period, to be 1,872,564 
hours with an associated equivalent total average annual cost of 
approximately $161,355,868.
    In contrast, and as further discussed in the corresponding ICR 
sections earlier in this preamble, for implementation of the currently 
proposed internet-based self-service tool in conjunction with the out-
of-network allowed amount and in-network negotiated rate machine-
readable files, the Departments estimate that the average annual high-
end burden and cost, over a 3-year period, for each group health plan 
and health insurance issuer or TPA would be approximately 2,127 hours, 
with an associated equivalent cost of approximately $190,356. For all 
1,754 health insurance issuers and 205 TPAs, the Departments estimate 
the total average high-end annual hour burden and cost, over a 3-year 
period, to be 4,165,900 hours with an associated equivalent total 
average annual cost of approximately $372,906,502.
    Additionally, as discussed in more detail in the corresponding ICR 
sections, the Departments estimate that that the low-end average 3-year 
burden and cost to develop and maintain only the internet-based self-
service tool, including the initial tool build and maintenance, 
customer service training, and customer assistance burdens and costs. 
The Departments estimate the total hour burden per plan and or TPA 
would be approximately 392 hours, with an associated equivalent average 
annual cost of approximately $33,194. For all 1,754 health insurance 
issuers and 205 TPAs, the Departments estimate the total average annual 
hour burden, over a 3-year period, to be 767,100 hours with an 
associated equivalent total average annual cost of approximately 
$65,027,268.
    In contrast, and as further discussed in the corresponding ICR 
sections earlier in this preamble, for implementation of the currently 
proposed internet-based self-service tool in conjunction with the out-
of-network allowed amount and in-network negotiated rate machine-
readable files, the Departments estimate that the average annual low-
end hour burden and cost, over a 3-year period, for group health plan 
and health insurance issuer or TPA would be approximately 1,562 hours, 
with an associated equivalent average annual cost of approximately 
$141,183. For all 1,754 health insurance issuers and 205 TPAs the 
Departments estimate the total average annual low-end hour burden and 
cost, over a 3-year period, to be 3,060,436 hours with an associated 
equivalent total average annual cost of approximately $276,577,902.
    While the Departments recognize that requiring disclosures through 
both mechanisms increases the cost and hour burdens for plans and 
issuers required to comply with the requirements of these proposed 
rules, the Departments are of the view that these additional costs are 
outweighed by the benefits accrued to the broader group of consumers 
(such as the uninsured and individuals shopping for coverage) and other 
individuals who would benefit directly from the additional information 
provided through the machine-readable files. Furthermore, as noted 
earlier in this preamble, researchers and third-party developers would 
also be able to use the data included in the machine-readable files in 
a way that could accrue even more benefits to individuals, including 
those individuals not currently enrolled in a particular plan or 
coverage. For these reasons, the Departments concluded that, in 
addition to proposing to require plans and issuers to be required to 
disclosure cost-sharing information to participants, beneficiaries, or 
enrollees through an internet-based self-service tool or in paper form, 
proposing to require plans and issuers to disclose information on 
negotiated rates and out-of-network allowed amounts would further the 
goals of price transparency and accrue more benefit to all potentially 
affected stakeholders.
6. Proposal To Require Machine-Readable Files in Lieu of an API
    The Departments considered whether to propose a requirement for 
group health plans and health insurance issuers to make the information 
required in these proposed rules to be disclosed through a standards-
based API, instead of through the proposed internet-based self-service 
tool and machine-readable files. Access to pricing information through 
an API could have a number of benefits for consumers, providers, and 
the public at large. The Departments believe this information could 
ensure the public has access to the most up-to-date rate information. 
Providing real-time access to pricing information through a standards-
based API could allow third-party innovators to incorporate the 
information into applications used by consumers or combined with 
electronic medical

[[Page 65500]]

records for point-of-care decision-making and referral opportunities by 
clinicians and their patients. Additionally, being able to access these 
data through a standards-based APIs would allow consumers to use the 
application of their choice to obtain personalized, actionable health 
care item or service price estimates, rather than being required to use 
one developed by their plan or issuer, although those consumers may be 
required to pay for access to those applications.
    While there are many benefits to a standards-based API, it is the 
Departments' current view that the burden and costs associated with 
building and maintaining a standards-based API would result in plans, 
issuers, and applicable TPAs potentially incurring higher burden and 
costs than estimated for the internet-based self-service tool and 
machine-readable files proposed in these rules and discussed in the 
applicable ICR sections. This view is based on the Departments' 
preliminary estimate that for all 1,754 health insurance issuers and 
205 TPAs, the total cost could range from $500 million to $1.5 billion 
for the first year. Looking at the average burden and cost over a 3-
year period for the API for all 1,754 health insurance issuers and 205 
TPAs, the Departments estimate an average annual cost that would 
significantly exceed the estimated annual cost of publishing the 
proposed internet-based self-service tool and machine-readable files. 
The Departments recognize that the development of the API may be 
streamlined through other development activities related to this 
proposed rule or by leveraging existing APIs currently used by plans, 
issuers, or TPAs for their own applications, potentially resulting in 
significantly lower burden and costs. Although not estimated here, the 
Departments expect any associated maintenance costs would also decline 
in succeeding years as group health plans, health insurance issuers or 
TPAs may gain additional efficiencies or may already undertake similar 
procedures to maintain any currently used internal APIs. Nonetheless, 
weighing the burden of group health plans, health insurance issuers and 
TPAs providing this information using machine-readable files against 
the potential burden of using a standards-based API, and given the 
timeframe that group health plans, health insurance issuers and TPAs 
have to meet the requirements of these proposals, the Departments are 
of the view that in the short-term, requiring machine-readable files is 
the more sensible approach.
    Even though the Departments are of the view that a machine-readable 
file is appropriate in the short-term, as discussed earlier in this 
preamble, the Departments recognize that a standards-based API format 
in the long-term may be more beneficial to consumers because the public 
would have access to the most up-to-date rate information and would 
allow health care consumers to use the application of their choice to 
obtain personalized, actionable health care service price estimates, 
and third-party developers could utilize the collected data to develop 
consumer tools. Therefore, the Departments are considering future 
rulemaking to further expand access to pricing information through 
standards-based APIs, including individuals' access to estimates about 
their own cost-sharing liability and information about negotiated in-
network rates and historical payment data for out-of-network allowed 
amounts.

VIII. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, the Departments are 
required to provide 60-days' notice in the Federal Register and solicit 
public comment before a collection of information requirement is 
submitted to the Office of Management and Budget (OMB) for review and 
approval. These proposed rules contain information collection 
requirements (ICRs) that are subject to review by OMB. A description of 
these provisions is given in the following paragraphs with an estimate 
of the annual burden, summarized in Table 16.
    To fairly evaluate whether an information collection should be 
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act 
of 1995 (PRA) requires that the Departments solicit comment on the 
following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of each of the Departments.
     The accuracy of the Departments' estimate of the 
information collection burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    The Departments solicit public comment on each of these issues in 
the following sections of this document in relation to the information 
collection requirements in these proposed rules.

A. Wage Estimates

    To derive wage estimates, the Departments generally used data from 
the Bureau of Labor Statistics to derive average labor costs (including 
a 100 percent increase for fringe benefits and overhead) for estimating 
the burden associated with the ICRs.\109\ Table 2 in these proposed 
rules presents the mean hourly wage, the cost of fringe benefits and 
overhead, and the adjusted hourly wage.
---------------------------------------------------------------------------

    \109\ See May 2018 Bureau of Labor Statistics, Occupational 
Employment Statistics, National Occupational Employment and Wage 
Estimates. Available at: https://www.bls.gov/oes/current/oes_stru.htm.
---------------------------------------------------------------------------

    As indicated, employee hourly wage estimates have been adjusted by 
a factor of 100 percent. This is necessarily a rough adjustment, both 
because fringe benefits and overhead costs vary significantly across 
employers, and because methods of estimating these costs vary widely 
across studies. The Departments are of the view that doubling the 
hourly wage to estimate total cost is a reasonably acceptable 
estimation method.

                             Table 2--Adjusted Hourly Wages Used in Burden Estimates
----------------------------------------------------------------------------------------------------------------
                                                                                      Fringe
                                                   Occupational     Mean hourly    benefits and      Adjusted
                Occupation title                       code       wage  ($/hour)   overhead  ($/    hourly wage
                                                                                       hour)         ($/hour)
----------------------------------------------------------------------------------------------------------------
General and Operations Manager..................         11-1021          $59.56          $59.56         $119.12
Computer and Information Systems Manager........         11-3021           73.49           73.49          146.98
Computer Programmer.............................         15-1131           43.07           43.07           86.14
Computer System Analyst.........................         15-1121           45.01           45.01           90.02
Web Developer...................................         15-1134           36.34           36.34           72.68
Business Operations Specialist..................         13-1199           37.00           37.00           74.00

[[Page 65501]]

 
Other Office and Administrative Support Workers.         43-9000           17.28           17.28           34.56
Lawyer..........................................         23-1011           69.34           69.34          138.68
Chief Executive Officer.........................         11-1011           96.22           96.22          192.44
Information Security Analysts...................         15-1122           49.26           49.26           98.52
Customer Service Representatives................         43-4051           17.53           17.53           35.06
----------------------------------------------------------------------------------------------------------------

1. ICR Regarding Requirements for Disclosures to Participants, 
Beneficiaries, or Enrollees (26 CFR 54.9815-2715A(b), 29 CFR 2590.715-
2715A(b), and 45 CFR 147.210(b))
    The Departments propose to add 26 CFR 54.9815-2715A(b), 29 CFR 
2590.715-2715A(b), and 45 CFR 147.210(b), to require group health plans 
and health insurance issuers in the group and individual markets to 
disclose, upon request, to a participant, beneficiary, or enrollee (or 
his or her authorized representative), such individual's cost-sharing 
information for covered items and services furnished by a particular 
provider or providers, as well as allowed amounts for covered items and 
services from out-of-network providers. As discussed previously in this 
preamble, the Departments propose in paragraphs (b)(1)(i) through (vii) 
to require plans and issuers to make this information available through 
a self-service tool on an internet website and, if requested, in paper 
form.
    The Departments propose to require plans and issuers to disclose, 
upon request, certain information relevant to a determination of a 
consumer's cost-sharing liability for a particular health care item or 
service from a particular provider, to the extent relevant to the 
individual's cost-sharing liability for the item or service, in 
accordance with seven content elements: The consumer-specific estimated 
cost-sharing liability, the consumer-specific accumulated amounts, the 
negotiated rate, the out-of-network allowed amount for a covered item 
or service, if applicable, the items and services content list when the 
information is for items and services subject to a bundled payment 
arrangement, a notice of prerequisites to coverage (such as prior 
authorization), and a disclosure notice. The Departments propose to 
require the disclosure notice to include several statements, written in 
plain-language, which include disclaimers relevant to the limitations 
of the cost-sharing information disclosed, including: A statement that 
out-of-network providers may balance bill participants beneficiaries, 
or enrollees, a statement that the actual charges may differ from those 
for which a cost-sharing liability estimate is given, and a statement 
that the estimated cost-sharing liability for a covered item is not a 
guarantee that coverage will be provided for those items and services. 
In addition, plans and issuers would also be permitted to add other 
disclaimers they determine appropriate so long as such information is 
not in conflict with the disclosure requirements of these proposed 
rules. The Departments have developed model language that plans and 
issuers would be able to use to satisfy the requirement to provide the 
notice statements described earlier in this preamble.
    As discussed earlier in this preamble, the Departments propose that 
plans and issuers would be required to make available the information 
described in paragraph (b)(1) of these proposed rules through an 
internet-based self-service tool as described in paragraph (b)(2)(i) of 
these proposed rules. The information would be required to be provided 
in plain-language through real-time responses. Plans and issuers would 
be required to allow participants, beneficiaries, or enrollees (or 
their authorized representatives) to search for cost-sharing 
information for covered items and services by billing code, or by 
descriptive term, per the user's request, in connection with a specific 
in-network provider, or for all in-network providers. In addition, the 
internet-based self-service tool would allow users to input information 
necessary to determine the out-of-network allowed amount for a covered 
item or service provided by an out-of-network provider (such as zip 
code). The tool would be required to have the capability to refine and 
reorder results by geographic proximity, and the amount of cost-sharing 
liability to the beneficiary, participant, or enrollee.
    Under paragraph (b)(2)(ii) of these proposed rules, the Departments 
would require plans and issuers to furnish upon request, in paper form, 
the information required to be disclosed under paragraph (b)(1) of 
these proposed rules to a participant, beneficiary, or enrollee. As 
discussed in this preamble, under paragraphs (b)(2)(ii)(A) and (B) of 
these proposed rules, a paper disclosure would be required to be 
furnished according to the consumer's filtering and sorting preferences 
and mailed to the participant, beneficiary, or enrollee (or his or her 
authorized representative) within 2 business days of receiving the 
request. As noted in these proposed rules, plans or issuers may, upon 
request, provide the required information through other methods, such 
as over the phone, through face-to-face encounters, by facsimile, or by 
email.
    The Departments assume fully-insured group health plans would rely 
on health insurance issuers to develop and maintain the internet-based 
self-service tool and disclosure in paper form. While the Departments 
recognize that some self-insured plans might independently develop and 
maintain the internet-based self-service tool, at this time the 
Departments assume that self-insured plans would rely on TPAs 
(including issuers providing administrative services only and non-
issuer TPAs) to develop the required internet-based self-service tool. 
The Departments make this assumption because the Departments understand 
that most self-insured group health plans rely on TPAs for performing 
most administrative duties, such as enrollment and claims processing. 
For those self-insured plans that choose to develop their own internet-
based self-service tools, the Departments assume that they will incur a 
similar hour burden and cost as estimated for health insurance issuers 
and TPAs, as discussed later in this preamble. In addition, paragraphs 
(b)(3) and (c)(4) of these proposed rules provide for a special rule to 
prevent unnecessary duplication of the disclosures with respect to 
health coverage, which provides that a plan may satisfy the disclosure 
requirements if the issuer offering the coverage is required to provide 
the information pursuant to a

[[Page 65502]]

written agreement between the plan and issuer. Thus, the Departments 
use health insurance issuers and TPAs as the unit of analysis for the 
purposes of estimating required changes to IT infrastructure and 
administrative hourly burden and costs. The Departments estimate 
approximately 1,754 issuers and 205 TPAs will be affected by this 
information collection.
    The Departments acknowledge that the costs described in these ICRs 
may vary depending on the number of lives covered, the number of 
providers and items and services for which cost-sharing information 
must be disclosed, and the fact that some plans and issuers already 
have tools that meet most (if not all) of these requirements or can be 
easily adapted to meet the requirements of these proposed rules. In 
addition, plans and issuers may be able to license existing cost 
estimator tools offered by third-party vendors, obviating the need to 
establish and maintain their own internet-based, self-service tool. The 
Departments assume that any related vendor licensing fees would be 
dependent upon complexity, volume, and frequency of use, but assume 
that such fees would be lower than an overall initial build and 
associated maintenance costs. Nonetheless, for purposes of the 
estimates in these ICRs, the Departments assume all 1,959 health 
insurance issuers and TPAs would be affected by these proposed rules. 
The Departments also developed the following estimates based on the 
mean average size, by covered lives, of issuers or TPAs. As noted later 
in this section of the preamble, the Departments seek comment on the 
inputs and assumptions that have been made to develop these burden and 
cost estimates, particularly with regard to existing efficiencies that 
would reduce these burden and cost estimates.
    The Departments estimate that health insurance issuers and TPAs 
would incur a one-time cost and hour burden to complete the technical 
build to implement the requirements of paragraph (b) of these proposed 
rules to establish the internet-based, self-service tool through which 
disclosure of cost-sharing information (including required notice 
statements) in connection with a covered item or service under the 
terms of the plan or coverage must be made. The Departments estimate an 
administrative burden on health insurance issuers and TPAs to make 
appropriate changes to information technology (IT) systems and 
processes to design, develop, implement, and operate the internet-
based, self-service tool and to make this information available in 
paper form, transmitted through the mail. The Departments estimate that 
the one-time cost and burden each issuer or TPA would incur to complete 
the one-time technical build would include activities such as planning, 
assessment, budgeting, contracting, building and systems testing, 
incorporating any necessary security measures, incorporating disclaimer 
and model notice language, or development of the proposed model and 
disclaimer notice materials for those that choose to make alterations. 
The Departments assume that this one-time cost and burden would be 
incurred in 2020. As mentioned earlier in this preamble, the 
Departments acknowledge that a number of health insurance issuers and 
TPAs have previously developed some level of price estimator tool 
similar to, and containing some functionality related to, the 
requirements in these proposed rules. The Departments, thus, seek to 
estimate an hourly burden and cost range (high-end and low-end) 
associated with these proposed rules for those health insurance issuers 
and TPAs. In order to develop the high-end hourly burden and cost 
estimates, the Departments assume that all health insurance issuers and 
TPAs would need to develop and build their internet-based self-service 
tool project from start-up to operational functionality. The 
Departments estimate that for each issuer or TPA, on average, it would 
take business operations specialists 150 hours (at $74 per hour), 
computer system analysts 1,000 hours (at $90.02 per hour), web 
developers 40 hours (at $72.68 per hour), computer programmers 1,250 
hours (at $86.14 per hour), computer and information systems managers 
40 hours (at $146.98 per hour), operations managers 25 hours (at 
$119.12 per hour), a lawyer 2 hours (at $138.68 per hour), and a chief 
executive officer 1 hour (at $192.44 per hour) to complete this task. 
The Departments estimate the total hour burden per issuer or TPA would 
be approximately 2,508 hours, with an equivalent cost of approximately 
$221,029. For all 1,754 health insurance issuers and 205 TPAs, the 
total one-time total hour burden is estimated to be 4,913,172 hours 
with an equivalent total cost of approximately $432,996,203.

 Table 3A--Total High-End Estimated One-Time Cost and Hour Burden for Internet-Based Self-Service Tool for Each
                                         Health Insurance Issuer or TPA
----------------------------------------------------------------------------------------------------------------
                                                            Burden hours per   Labor cost per    Total cost per
                        Occupation                             respondent           hour           respondent
----------------------------------------------------------------------------------------------------------------
General and Operations Manager............................                25           $119.12            $2,978
Computer and Information Systems Manager..................                40            146.98             5,879
Computer Programmer.......................................             1,250             86.14           107,675
Computer System Analyst...................................             1,000             90.02            90,020
Web Developer.............................................                40             72.68             2,907
Business Operations Specialist............................               150             74.00            11,100
Lawyer....................................................                 2            138.68               277
Chief Executive Officer...................................                 1            192.44               192
                                                           -----------------------------------------------------
    Total per respondent..................................             2,508  ................           221,029
----------------------------------------------------------------------------------------------------------------


  Table 3B--Total High-End Estimated One-Time Cost and Hour Burden for Internet-Based Self-Service Tool for All
                                        Health Insurance Issuers and TPAs
----------------------------------------------------------------------------------------------------------------
                                                 Burden hours per
Number of respondents   Number of responses         respondent         Total burden hours        Total cost
----------------------------------------------------------------------------------------------------------------
             1,959                  1,959                  2,508              4,913,172           $432,996,203
----------------------------------------------------------------------------------------------------------------


[[Page 65503]]

    The Departments recognize that a significant number of health 
insurance issuers may already have some form of price estimator tool 
that allows for comparison shopping and a large number of issuers may 
currently provide the ability for consumers to obtain their estimated 
out-of-pocket costs.\110\ For those health insurance issuers and TPAs, 
that currently have some level of functional cost estimator tool that 
would meet some of the requirements of these proposed rules, the 
Departments recognize that these entities would incur a lower hour 
burden and cost. Thus, the Departments have estimated a low-end hour 
burden and cost to comply with these proposed rules. Assuming that 90 
percent of health insurance issuers and TPAs currently provide a cost 
estimator tool and would only be required to make changes to their 
current system in order to meet the requirements in these proposed 
rules, the Departments estimate that 175 health insurance issuers and 
21 TPAs would be required to develop an internet-based self-service 
tool from start-up to operational functionality. The Departments 
estimate that each issuer or TPA would incur a one-time cost and hour 
burden of approximately 2,508 hours, with an equivalent cost of 
approximately $221,029 (as discussed previously in this ICR). For the 
196 health insurance issuers and TPAs, the total one-time hour burden 
is estimated to be 491,317 hours with an equivalent total cost of 
approximately $43,299,620.
---------------------------------------------------------------------------

    \110\ See AHIP release dated August 2, 2019--AHIP Issues 
Statement on Proposed Rule Requiring Disclosure of Negotiated 
Prices. Available at: https://www.ahip.org/ahip-issues-statement-on-proposed-rule-requiring-disclosure-of-negotiated-prices/. See also 
Higgins, A., Brainard, N., Veselovskiy, G. ``Characterizing Health 
Plan Price Estimator Tools: Findings From a National Survey.'' 22 
Am. J. Managed Care 126,2016. Available at: https://ajmc.s3.amazonaws.com/_media/_pdf/AJMC_02_2016_Higgins%20(final).pdf.

Table 4A--Low-Range One-Time Cost and Hour Burden for Web-Based Consumer Price Tool for Health Insurance Issuers
               and TPAs Requiring a Complete Build From the Start-Up to Operational Functionality
----------------------------------------------------------------------------------------------------------------
                                                 Burden hours per
Number of respondents   Number of responses         respondent         Total burden hours        Total cost
----------------------------------------------------------------------------------------------------------------
               196                    196                  2,508                491,317            $43,299,620
----------------------------------------------------------------------------------------------------------------

    The Departments estimate that those health insurance issuers and 
TPAs that would only be required to make changes to their existing 
systems would already have operational capabilities that meet 
approximately 75 percent of the requirements in these proposed rules 
and would only incur a cost and hour burden related to changes needed 
to fully meet the requirements of these proposed rules. Based on this 
assumption, the Departments estimate that 1,579 health insurance 
issuers and 184 TPAs would incur a one-time hour burden of 627 hours 
and an associated cost of $55,257 to fully satisfy the requirements of 
these proposed rules. For all 1,763 health insurance issuers and TPAs, 
the total one-time hour burden would be 1,105,464 hours with an 
equivalent total cost of approximately $97,424,146.

 Table 4B--Low-End One-Time Cost and Hour Burden for Web-Based Consumer Price Tool for Health Insurance Issuers
                                     and TPAs Requiring Only a Partial Build
----------------------------------------------------------------------------------------------------------------
                                                 Burden hours per
Number of respondents   Number of responses         respondent         Total burden hours        Total cost
----------------------------------------------------------------------------------------------------------------
             1,763                 11,763                    627              1,105,464            $97,424,146
----------------------------------------------------------------------------------------------------------------


  Table 4C--Total Low-End One-Time Cost and Hour Burden for Web-Based Consumer Price Tool for Health Insurance
                                                Issuers and TPAs
----------------------------------------------------------------------------------------------------------------
                                                 Burden hours per
Number of respondents   Number of responses         respondent         Total burden hours        Total cost
----------------------------------------------------------------------------------------------------------------
             1,959                  1,959                    815              1,596,781           $140,723,766
----------------------------------------------------------------------------------------------------------------

    In addition to the range of one-time costs and hour burdens 
estimated in Tables 4B and 4C, health insurance issuers and TPAs would 
incur ongoing annual costs such as those related to ensuring cost 
estimation accuracy, providing quality assurance, conducting website 
maintenance and making updates, and enhancing or updating any needed 
security measures. The Departments estimate that for each issuer and 
TPA, on average, it would take business operations specialists 15 hours 
(at $74.00 per hour), computer systems analysts 50 hours (at $90.02 per 
hour), web developers 10 hours (at $72.68 per hour), computer 
programmers 55 hours (at $86.14 per hour), computer and information 
systems managers 10 hours (at $146.98), and operations managers 5 hours 
(at $119.12 per hour) each year to perform these tasks. The total 
annual hour burden for each issuer or TPA would be 145 hours, with an 
equivalent cost of approximately $13,141. For all 1,754 health 
insurance issuers and 205 TPAs, the total annual hour burden is 
estimated to be 284,055 hours with an equivalent total annual cost of 
approximately $25,743,023. The Departments consider this to be an 
upper-bound estimate and expect maintenance costs to decline in 
succeeding years as health insurance issuers and TPAs gain efficiencies 
and experience in updating and managing their internet-based self-
service tool.

[[Page 65504]]



 Table 5A--Estimated Annual Cost and Burden for Maintenance of Internet-Based Self-Service Tool for Each Health
                                             Insurance Issuer or TPA
----------------------------------------------------------------------------------------------------------------
                                                            Burden hours per   Labor cost per    Total cost per
                        Occupation                             respondent           hour           respondent
----------------------------------------------------------------------------------------------------------------
General and Operations Manager............................                 5           $119.12              $596
Computer and Information Systems Manager..................                10            146.98             1,470
Business Operations Specialist............................                15             74.00             1,110
Computer System Analyst...................................                50             90.02             4,501
Web Developer.............................................                10             72.68               727
Computer Programmer.......................................                55             86.14             4,738
                                                           -----------------------------------------------------
    Total per Respondent..................................               145  ................            13,141
----------------------------------------------------------------------------------------------------------------


    Table 5B--Estimated Annual Hour Burden for Maintenance of Internet-Based Self-Service Tool for All Health
                                  Insurance Issuers and TPAs From 2021 Onwards
----------------------------------------------------------------------------------------------------------------
                                                 Burden hours per
Number of respondents   Number of responses         respondent         Total burden hours        Total cost
----------------------------------------------------------------------------------------------------------------
             1,959                  1,959                    145                284,055            $25,743,023
----------------------------------------------------------------------------------------------------------------

    The Departments estimate the high-end average annual total hour 
burden, for all health insurance issuers and TPAs to develop, build, 
and maintain an internet-based consumer self-service tool, over three 
years would be 1,827,094 hours annually with an average annual total 
equivalent cost of $161,494,083. The Departments acknowledge that the 
costs described earlier in this section of the preamble may vary 
depending on the number of lives covered, and the number of providers 
and items and services incorporated into the internet-based self-
service tool. In recognizing that many health insurance issuers and 
TPAs currently have some form of cost estimator tool in operation that 
meet most (if not all) of the requirements in these proposed rules, the 
Departments estimate the low-end average annual total hour burden, for 
all health insurance issuers and TPAs to develop, build, and maintain 
an internet-based self-service tool, over a 3-year period would be 
721,630 hours annually with an average annual total equivalent cost of 
$64,069,937. The Departments recognize that group health plans, 
issuers, and TPAs may be able to license existing online cost estimator 
tools offered by vendors, obviating the need to establish, upgrade, and 
maintain their own internet-based self-service tools and that vendor 
licensing fees, dependent upon complexity, volume and frequency of use, 
could be lower than the hour burden and costs estimated here.

    Table 6--Estimated High-End Three Year Average Annual Hour Burden and Costs for All Health Insurance Issuers and TPAs To Develop and Maintain the
                                                            Internet-Based Self-Service Tool
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                Estimated number
                                                                    of health                          Burden per       Total annual     Total estimated
                             Year                                   insurance         Responses        respondent      burden (hours)      labor Cost
                                                                issuers and TPAs                         (hours)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2020..........................................................             1,959             1,959             2,508         4,913,172      $432,996,203
2021..........................................................             1,959             1,959               145           284,055        25,743,023
2022..........................................................             1,959             1,959               145           284,055        25,743,023
3 year Average................................................             1,959             1,959               933         1,827,094       161,494,083
--------------------------------------------------------------------------------------------------------------------------------------------------------


    Table 7--Estimated Low-End Three Year Average Annual Hour Burden and Costs for All Health Insurance Issuers and TPAs To Develop and Maintain the
                                                            Internet-Based Self-service Tool
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                Estimated number
                                                                    of health                          Burden per       Total annual     Total estimated
                             Year                                   insurance         Responses        respondent      burden (hours)      labor cost
                                                                issuers and TPAs                         (hours)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2020..........................................................             1,959             1,959               815         1,596,781      $140,723,766
2021..........................................................             1,959             1,959               145           284,055        25,743,023
2022..........................................................             1,959             1,959               145           284,055        25,743,023
3 year Average................................................             1,959             1,959               368           721,630        64,069,937
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 65505]]

    In addition to the one-time and annual maintenance costs estimated 
in Table 7, health insurance issuers and TPAs would also incur an 
annual burden and costs associated with customer service representative 
training, consumer assistance, and administrative and distribution 
costs related to the disclosures required under paragraph (b)(2)(ii) of 
these proposed rules. The Departments estimate that, to understand and 
navigate the internet-based self-service tool and be able to provide 
the appropriate assistance to consumers, each customer service 
representative would require approximately 2 hours (at $35.06 per hour) 
of annual consumer assistance training at an associated cost of $70 per 
hour. The Departments estimate that each issuer and TPA would train, on 
average, 10 customer service representatives annually, resulting in a 
total annual hour burden of 20 hours and associated total costs of $701 
per issuer or TPA. For all 1,754 health insurance issuers and 205 TPAs, 
the total annual hour burden is estimated to be 39,180 hours with an 
equivalent total annual cost of approximately $1,373,651.

  Table 8A--Estimated Annual Cost and Hour Burden per Health Insurance Issuer or TPA To Train Customer Service
       Representatives To Provide Assistance to Consumers Related to the Internet-Based Self-Service Tool
----------------------------------------------------------------------------------------------------------------
                                                            Burden hours per   Labor cost per    Total cost per
                        Occupation                             respondent           hour           respondent
----------------------------------------------------------------------------------------------------------------
Customer Service Representatives..........................                 2            $35.06               $70
                                                           -----------------------------------------------------
    Total per Respondent..................................                 2  ................                70
----------------------------------------------------------------------------------------------------------------


 Table 8B--Estimated Annual Cost and Hour Burden for All Health Insurance Issuers and TPAs From 2021 Onwards To
  Train Customer Service Representatives to Provide Assistance to Consumers Related To the Internet-Based Self-
                                                  Service Tool
----------------------------------------------------------------------------------------------------------------
                                                 Burden hours per
Number of respondents   Number of responses         respondent        Total burden  hours        Total cost
----------------------------------------------------------------------------------------------------------------
             1,959                 19,590                     20                 39,180             $1,373,651
----------------------------------------------------------------------------------------------------------------

    The Departments assume that the greatest proportion of 
beneficiaries, participants, and enrollees who would request disclosure 
of cost-sharing information in paper form would do so because they do 
not have access to the internet. However, the Departments acknowledge 
that some consumers with access to the internet would also contact a 
plan or issuer for assistance and may request to receive cost-sharing 
information in paper form.
    Recent studies have found that approximately 20 million households 
do not have an internet subscription \111\ and that approximately 19 
million Americans (6 percent of the population) lack access to fixed 
broadband services that meet threshold levels.\112\ Additionally, a 
recent Pew Research Center analysis found that 10 percent of U.S. 
adults do not use the internet, citing the following major factors: 
Difficulty of use, age, cost of internet services, and lack of computer 
ownership.\113\ Additional research indicates that an increasing 
number, 17 percent, of individuals and households are now considered 
``smartphone only'' and that 37 percent of U.S. adults mostly use 
smartphones to access the internet and that many adults are forgoing 
the use of traditional broadband services.\114\ Further research 
indicates that younger individuals and households, including 
approximately 93 percent of households with householders aged 15 to 34, 
are more likely to have smartphones compared to those aged over 
65.\115\ The Departments are of the view that the population most 
likely to use the internet-based self-service tool would generally 
consist of higher-income and younger individuals, who are more likely 
to have internet access via broadband or smartphone technologies.
---------------------------------------------------------------------------

    \111\ See 2017 U.S. Census Bureau, 2017 American Community 
Survey 1-Year Estimates. Available at: https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_17_1YR_S2801&prodType=table.
    \112\ See Eight Broadband Progress Report. Federal 
Communications Commission. December 14, 2018. Available at: https://www.fcc.gov/reports-research/reports/broadband-progress-reports/eighth-broadband-progress-report. In addition to the estimated 19 
million Americans that lack access, they further estimate that in 
areas where broadband is available approximately 100 million 
Americans do not subscribe.
    \113\ See Anderson, M., Perrin, A., Jiang, J., Kumar, M. ``10% 
of Americans don't use the internet. Who are they?'' ((Pew Research 
Center. April 22, 2019. Available at: https://www.pewresearch.org/fact-tank/2019/04/22/some-americans-dont-use-the-internet-who-are-they/.
    \114\ See Anderson, M. ``Mobile Technology and Home Broadband 
2019.'' Pew Research Center. June 13, 2019. Available at https://www.pewinternet.org/2019/06/13/mobile-technology-and-home-broadband-2019/ (finding that overall 17 percent of Americans are now 
``smartphone only'' internet users, up from 8 percent in 2013. The 
study also shows that 45 percent of non-broadband users cite their 
smartphones as a reason for not subscribing to high-speed internet).
    \115\ See Ryan, C. ``Computer and internet Use in the United 
States: 2016.'' American Community Survey Reports: United States 
Census Bureau. August 2016 Available at: https://www.census.gov/content/dam/Census/library/publications/2018/acs/ACS-39.pdf.
---------------------------------------------------------------------------

    The Departments estimate there are 193.5 million \116\ 
beneficiaries, participants, or enrollees enrolled in group health 
plans or with health insurance issuers required to comply with the 
requirements under paragraph (b) of these proposed rules. On average, 
it is estimated that each issuer or TPA would annually administer the 
benefits for 98,775 beneficiaries, participants, or enrollees.
---------------------------------------------------------------------------

    \116\ EBSA estimates that in 2016 there were 135.7 million 
covered individuals with private sector and 44.1 million with public 
sector employer sponsored coverage (see https://www.dol.gov/sites/dolgov/files/EBSA/researchers/data/health-and-welfare/health-insurance-coverage-bulletin-2016.pdf). Kaiser Family Foundation 
reports 13.7 million enrollees in the individual market for the 
first quarter of 2019 (see: https://www.kff.org/private-insurance/issue-brief/data-note-changes-in-enrollment-in-the-individual-health-insurance-market-through-early-2019/).
---------------------------------------------------------------------------

    Assuming that 6 percent of covered individuals lack access to fixed 
broadband service and, taking into account that a recent study noted 
that only 1 to 12 percent of consumers that have been offered internet-
based or mobile application-based price

[[Page 65506]]

transparency tools use them,\117\ the Departments estimate that on 
average 6 percent of participants, beneficiaries, or enrollees would 
seek customer support (a mid-range percentage of individuals that 
currently use available cost estimator tools) and that an estimated 1 
percent of those participants, beneficiaries, or enrollees would 
request any pertinent information be disclosed to them in paper form. 
The Departments estimate that each health insurance issuer or TPA, on 
average, would require a customer service representative to interact 
with a beneficiary, participant, or enrollee approximately 59 times per 
year on matters related to cost-sharing information disclosures 
required by these proposed rules. The Departments estimate that each 
customer service representative would spend, on average, 15 minutes (at 
$35.06 per hour) for each interaction, resulting in a cost of 
approximately $9 per interaction. The Departments estimate that each 
issuer or TPA would incur an annual hour burden of 15 hours with an 
associated equivalent cost of approximately $519 for each issuer or 
TPA, resulting in a total annual hour burden of 29,025 hours with an 
associated cost of approximately $1,017,617 for all issuers or TPAs.
---------------------------------------------------------------------------

    \117\ See Mehrotra, A., Chernew, M., Sinaiko, A. ``Health Policy 
Report: Promises and Reality of Price Transparency.'' April 5, 2018. 
14 N. Eng. J. Med. 378. Available at: https://www.nejm.org/doi/full/10.1056/NEJMhpr1715229.
---------------------------------------------------------------------------

    The Departments assume that all beneficiaries, participants, or 
enrollees that contact a customer service representative representing 
their plan or issuer would request non-internet disclosure of the 
internet-based self-service tool information. Of these, the Departments 
estimate that 54 percent of the requested information would be 
transmitted via email or facsimile at negligible cost to the issuer or 
TPA and that 46 percent would request the information be provided via 
mail. The Departments estimate that, on average, each issuer or TPA 
would send approximately 27 disclosures via mail annually. Based on 
these assumptions, the Departments estimate that the total number of 
annual disclosures sent by mail for all health insurance issuers and 
TPAs would be 53,406.
    The Departments assume the average length of the printed disclosure 
would be approximately nine single-sided pages in length, assuming two 
pages of information (similar to that provided in an EOB) for three 
providers (for a total of six pages) and an additional three pages 
related to the required notice statements, with a printing cost of 
$0.05 per page. Therefore, including postage costs of $0.55 per 
mailing, the Departments estimate that each health insurance issuer or 
TPA would incur a material and printing costs of $1.00 ($0.45 printing 
plus $0.55 postage costs) per mailed request. Based on these 
assumptions, the Departments estimate that each issuer or TPA would 
incur an annual printing and mailing cost of approximately $27, 
resulting in a total annual printing and mailing cost of approximately 
$53,406 for all health insurance issuers and TPAs.

  Table 9A--Estimated Annual Cost and Hour Burden per Response per Health Insurance Issuer or TPA To Accept and
                                    Fulfill Requests for a Mailed Disclosure
----------------------------------------------------------------------------------------------------------------
                                                            Burden hours per   Labor cost per    Total cost per
                        Occupation                             respondent           hour           respondent
----------------------------------------------------------------------------------------------------------------
Customer Service Representatives..........................              0.25            $35.06                $9
                                                           -----------------------------------------------------
    Total per Respondent..................................              0.25  ................                 9
----------------------------------------------------------------------------------------------------------------


  Table 9B--Estimated Annual Cost and Hour Burden for All Health Insurance Issuers and TPAs From 2021 Onwards To Accept and Fulfill Requests for Mailed
                                                                       Disclosures
--------------------------------------------------------------------------------------------------------------------------------------------------------
      Number of                               Burden hours per                           Total labor cost of      Printing and
     respondents       Number of responses       respondent        Total burden hours         reporting          materials cost          Total cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
             1,959               116,100                    15                29,025            $1,017,617               $53,406            $1,071,023
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The Departments solicit comment for this collection of information 
request related to the overall estimated costs and hour burdens. The 
Departments also seek comment related to the technical and labor 
requirements or costs that may be required to meet the requirements of 
these proposed rules; for example, what costs may be associated with 
any potential consolidation of information needed for the internet-
based self-service tool functionality. The Departments seek comment on 
the estimated number of health insurance issuers and TPAs currently in 
the group and individual markets and the number of self-insured group 
health plans that might seek to independently develop an internet-based 
self-service tool, the percentage of consumers who might use the 
internet-based self-service tool, and the percentage of consumers who 
might contact their plan, issuer, or TPA requesting information via a 
non-internet disclosure method. The Departments seek comment on any 
other existing efficiencies that could be leveraged to minimize the 
burden on group health plans, issuers, and TPAs, as well as how many or 
what percentage of plans, issuers, and TPAs might leverage such 
efficiencies. The Departments seek comment on the proposed model notice 
and any additional information that stakeholders feel should be 
included, removed, or expanded upon and its overall adaptability.
    In conjunction with these proposed rules, CMS is seeking an OMB 
control number and approval for the proposed information collection 
(OMB control number: 0938-NEW (Transparency in Coverage (CMS-10715)). 
CMS is proposing to require the following information collections to 
include the following burden. DOL and Treasury will submit their burden 
estimates upon approval.

[[Page 65507]]

2. ICRs Regarding Requirements for Public Disclosure of Negotiated 
Rates and Historical Allowed Amount Data for Covered Items and Services 
From Out-of-Network Providers Under 26 CFR 54.9815-2715A(c), 29 CFR 
2590.715-2715A(c), and 45 CFR 147.210(c)
    The Departments propose to add paragraph (c) of these proposed 
rules to require group health plans and health insurance issuers to 
make public negotiated rates with in-network providers and data 
outlining the different amounts a plan or issuer has paid to particular 
out-of-network providers for covered items or services. Plans and 
issuers would be required to disclose for each covered service or item, 
the negotiated rates for services and items furnished by particular in-
network providers and out-of-network allowed amount data for each 
covered service or item furnished by particular out-of-network provider 
through two machine-readable files that must conform to guidance issued 
by the Departments. The list of required data elements that must be 
included for each file for each covered item or service are discussed 
previously and enumerated under paragraph (c)(1)(i) for the Negotiated 
Rate File and paragraph (c)(1)(ii) for the Allowed Amount File of these 
proposed rules. Under paragraphs (c)(2) and (3) of these proposed 
rules, the files must be posted on a public internet site with 
unrestricted access and must be updated monthly.
    For the Allowed Amount File required under proposed paragraph 
(c)(1)(ii), the proposed rules would require plans and issuers to make 
available a machine-readable file showing the unique amounts a plan or 
issuer's coverage allowed for items or services furnished by particular 
out-of-network providers during the 90-day time period that begins 180 
days before the publication date of the file. As discussed previously 
in these proposed rules, to the extent that a plan or issuer has 
allowed multiple amounts for an item or service to a particular 
provider at the same rate, the proposed rules would only require a plan 
or issuer to list the allowed amount once. Additionally, if the plan or 
issuer would only display allowed amounts in connection with 10 or 
fewer claims for a covered item or service for payment to a provider 
during any relevant 90-day period, the plan or issuer would not be 
required to report those unique allowed amounts.
    As discussed in the previous collection of information, the 
Departments assume fully-insured group health plans would rely on 
health insurance issuers and most self-insured group health plans would 
rely on issuers or TPAs to develop and update the proposed machine-
readable files. The Departments recognize that there may be some self-
insured plans that wish to individually comply with these proposed 
rules and would incur a similar hour burden and costs as described in 
the following paragraphs.
    The Departments estimate a one-time hour burden and cost to health 
insurance issuers and TPAs to make appropriate changes to IT systems 
and processes, to develop, implement and operate the Negotiated Rate 
File in order to meet the proposed requirements under paragraph 
(c)(1)(i). The Departments estimate that for each health insurance 
issuer or TPA, on average, would require business operations 
specialists 20 hours (at $74 per hour), computer system analysts 500 
hours (at $90.02 per hour), computer programmers 600 hours (at $86.14 
per hour), computer and information systems managers 50 hours (at 
$146.98 per hour) and operations managers 20 hours (at $119.12 per 
hour) to complete this task. The total burden for each issuer or TPA 
would be approximately 1,190 hours on average, with an equivalent 
associated cost of approximately $107,905. For all 1,754 health 
insurance issuers and 205 TPAs, the Departments estimate the total one-
time hour burden would be 2,331,210 hours with an associated cost of 
approximately $211,386,679. The Departments emphasize that these are 
upper bound estimates that are meant to be sufficient to cover 
substantial, complex activities that may be necessary for some plans 
and issuers to comply with these proposed rules due to the manner in 
which their current systems are designed. Such activities may include 
such significant activity as the design and implementation of databases 
that will support the production of the Negotiated Rate Files. The 
Departments request comment on these estimates and whether they 
substantially overestimate expected burden.

 Table 10A--Estimated One-Time Cost and Hour Burden per Health Insurance Issuer or TPA for the Negotiated Rates
                                  for In-Network Providers Negotiated Rate File
----------------------------------------------------------------------------------------------------------------
                                                            Burden hours per   Labor cost per    Total cost per
                        Occupation                             respondent           hour           respondent
----------------------------------------------------------------------------------------------------------------
General and Operations Manager............................                20           $119.12            $2,382
Computer and Information Systems Manager..................                50            146.98             7,349
Business Operations Specialist............................                20             74.00             1,480
Computer System Analyst...................................               500             90.02            45,010
Computer Programmer.......................................               600             86.14            51,684
                                                           -----------------------------------------------------
    Total per Respondent..................................             1,190  ................           107,905
----------------------------------------------------------------------------------------------------------------


 Table 10B--Estimated One-Time Cost and Hour Burden for All Health Insurance Issuers and TPAs for the Negotiated
                                    Rates for In-Network Negotiated Rate File
----------------------------------------------------------------------------------------------------------------
                                                 Burden hours per
Number of Respondents   Number of responses         respondent         Total burden hours        Total cost
----------------------------------------------------------------------------------------------------------------
             1,959                  1,959                  1,190              2,331,210           $211,386,679
----------------------------------------------------------------------------------------------------------------

    In addition to the one-time costs estimated Tables 10A and 10B, 
health insurance issuers and TPAs would incur ongoing annual burdens 
and costs to update the proposed Negotiated Rate File monthly as 
proposed under paragraph (c)(3). The Departments estimate that for each 
issuer or TPA, on average, it would require a general and

[[Page 65508]]

operations manager 3 hours (at $119.12 per hour), computer systems 
analysts 10 hours (at $90.02 per hour), computer programmers 10 hours 
(at $86.14 per hour), a computer and information systems manager 5 
hours (at $146.98), and a business operations specialist 2 hours (at a 
rate of $74.00) to make the required updates to the Negotiated Rate 
File. The Departments estimate that each issuer or TPA would incur a 
burden of 30 hours with an associated cost of approximately $3,002 to 
update the Negotiated Rate File. Assuming health insurance issuers and 
TPAs make changes that would require the file to be updated monthly per 
the requirements proposed in these rules, an issuer or TPA would need 
to update the Negotiated Rate File 12 times during a given year, 
resulting in an ongoing annual hour burden of 360 hours for each issuer 
or TPA with an associated equivalent cost of approximately $36,022. The 
Departments estimate the total annual hour burden for all 1,959 health 
insurance issuers and TPAs would be 705,240 hours, with an associated 
equivalent cost of approximately $70,567,725. The Departments consider 
this estimate to be an upper-bound estimate and expect ongoing update 
costs to decline in succeeding years as health insurance issuers and 
TPAs gain efficiencies and experience in updating and managing the 
machine-readable files.
    The Departments seek comment on the accuracy of the burden 
estimates under these proposed rules, as well as any ways to further 
refine the burden estimates.

 Table 11A--Estimated Annual Ongoing Cost and Burden per Health Insurance Issuer or TPA for the Negotiated Rates
                                  for In-Network Providers Negotiated Rate File
----------------------------------------------------------------------------------------------------------------
                                                            Burden hours per   Labor cost per    Total cost per
                        Occupation                             respondent           hour           respondent
----------------------------------------------------------------------------------------------------------------
General and Operations Manager............................                 3           $119.12              $357
Computer and Information Systems Manager..................                 5            146.98               735
Business Operations Specialist............................                 2             74.00               148
Computer System Analyst...................................                10             90.02               900
Computer Programmer.......................................                10             86.14               861
                                                           -----------------------------------------------------
    Total per Respondent..................................                30  ................             3,002
----------------------------------------------------------------------------------------------------------------


 Table 11B--Estimated Annual Ongoing Cost and Burden for All Health Insurance Issuers and TPAs From 2021 Onwards
                                for the In-Network Providers Negotiated Rate File
----------------------------------------------------------------------------------------------------------------
                                                 Burden hours per
Number of respondents   Number of responses         respondent         Total burden hours        Total cost
----------------------------------------------------------------------------------------------------------------
             1,959                 23,508                    360                705,240            $70,567,725
----------------------------------------------------------------------------------------------------------------

    The Departments estimate the total one-time hour burden for all 
health insurance issuers and TPAs of 2,331,210 hours and an associated 
equivalent cost of approximately $211,386,679 to develop and build the 
Negotiated Rate File in a machine-readable format. In subsequent years, 
the Departments estimate the total annual hour burden of 705,240 hours 
to maintain and update the Negotiated Rate File with an annual 
associated equivalent cost of approximately $70,567,725. The 
Departments estimate the average annual total hour burden, for all 
health insurance issuers and TPAs, over three years, would be 1,247,230 
hours with an average annual associated equivalent total cost of 
$117,507,376.

TABLE 12--Estimated Three Year Average Annual Hour Burden and Costs for All Issuers and TPAs To Develop and Maintain the In-Network Providers Negotiated
                                                                        Rate File
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Estimated
                                                                number of health                       Burden per       Total annual     Total estimated
                             Year                                   insurance         Responses        respondent      burden  (hours)     labor cost
                                                                issuers and TPAs                         (hours)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2020..........................................................             1,959             1,959             1,190         2,331,210      $211,386,679
2021..........................................................             1,959            23,508               360           705,240        70,567,725
2022..........................................................             1,959            23,508               360           705,240        70,567,725
3 year Average................................................             1,959            16,325               637         1,247,230       117,507,376
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The Departments estimate a one-time hour burden and cost to health 
insurance issuers and TPAs to make appropriate changes to IT systems 
and processes, to develop, implement, and operate the Allowed Amount 
File in order to meet the proposed requirements under paragraph 
(c)(1)(ii) of the proposed rules related to making available a file of 
certain historical claims paid to out-of-network providers. The 
Departments estimate that each issuer or TPA, on average, would require 
business operations specialists 20 hours (at $74 per hour), computer 
system analysts 500 hours (at $90.02 per hour), computer programmers 
600 hours (at $86.14 per hour), computer and information systems 
managers 50 hours (at $146.98 per hour), information security analysts 
100 hours (at $98.52 per hour), and operations managers 20 hours (at 
$119.12 per hour) to complete this task. The total burden per issuer or 
TPA would be approximately 1,290 hours on average, with an equivalent 
associated cost of approximately $117,757. For all 1,754 health 
insurance issuers and 205 TPAs, the Departments estimate the total one-
time hour burden

[[Page 65509]]

would be 2,527,110 hours with an equivalent associated cost of 
approximately $230,686,747.

  Table 13A--Estimated One-Time Cost and Hour Burden per Health Insurance Issuer or TPA for the Out-of-Network
                                               Allowed Amount File
----------------------------------------------------------------------------------------------------------------
                                                            Burden hours per   Labor cost per    Total cost per
                        Occupation                             respondent           hour           respondent
----------------------------------------------------------------------------------------------------------------
General and Operations Manager............................                20           $119.12            $2,382
Computer and Information Systems Manager..................                50            146.98             7,349
Business Operations Specialist............................                20             74.00             1,480
Computer System Analyst...................................               500             90.02            45,010
Information Security Analysts.............................               100             98.52             9,852
Computer Programmer.......................................               600             86.14            51,684
                                                           -----------------------------------------------------
    Total per Respondent..................................             1,290  ................           117,757
----------------------------------------------------------------------------------------------------------------


  Table 13B--Estimated One-Time Cost and Hour Burden for All Health Insurance Issuers and TPAs for the Out-of-
                                           Network Allowed Amount File
----------------------------------------------------------------------------------------------------------------
                                                 Burden hours per
Number of respondents   Number of responses         respondent         Total burden hours        Total cost
----------------------------------------------------------------------------------------------------------------
             1,959                  1,959                  1,290              2,527,110           $230,686,747
----------------------------------------------------------------------------------------------------------------

    In addition to the one-time costs estimated in Tables 13A and 13B, 
health insurance issuers and TPAs would incur ongoing annual burdens 
and costs to update the proposed Allowed Amount File monthly. The 
Departments estimate that for each issuer or TPA, on average, it would 
require a computer systems analysts 5 hours (at $90.02 per hour), 
computer programmers 5 hours (at $86.14 per hour), a computer and 
information systems manager 1 hour (at $146.98), and an information 
security analyst 2 hours (at $98.52 per hour) to make the required 
Allowed Amount File updates. The Departments estimate that each issuer 
or TPA would incur a monthly burden of 13 hours with an equivalent 
associated cost of approximately $1,225 to update the Allowed Amount 
File. Assuming health insurance issuers and TPAs make changes that 
would require the file to be updated monthly per the requirements in 
these proposed rules an issuer or TPA would need to update Allowed 
Amount File 12 times during a given year, resulting in an ongoing 
annual burden of approximately 156 hours for each issuer or TPA with an 
equivalent associated cost of approximately $14,698. The Departments 
estimate the total annual hour burden for all 1,959 health insurance 
issuers and TPAs would be 305,604 hours with an equivalent associated 
cost of approximately $28,793,069. The Departments consider this 
estimate to be an upper-bound estimate and expect ongoing Allowed 
Amount File update costs to decline in succeeding years as health 
insurance issuers and TPAs gain efficiencies and experience in updating 
and managing the Allowed Amount File.

  Table 14A--Estimated Annual Ongoing Cost and Burden per Health Insurance Issuer or TPA for the Out-of-Network
                                               Allowed Amount File
----------------------------------------------------------------------------------------------------------------
                                                            Burden hours per   Labor cost per    Total cost per
                        Occupation                             respondent           hour           respondent
----------------------------------------------------------------------------------------------------------------
Computer and Information Systems Manager..................                 1           $146.98              $147
Computer System Analyst...................................                 5             90.02               450
Computer Programmer.......................................                 5             86.14               431
Information Security Analysts.............................                 2             98.52               197
                                                           -----------------------------------------------------
    Total per Respondent..................................                13  ................             1,225
----------------------------------------------------------------------------------------------------------------


 TABLE 14B--Estimated Annual Ongoing Cost and Burden for All Health Insurance Issuers and TPAs From 2021 Onwards
                                   for the Out-of-Network Allowed Amount File
----------------------------------------------------------------------------------------------------------------
                                                 Burden hours per
Number of respondents   Number of responses         respondent         Total burden hours        Total cost
----------------------------------------------------------------------------------------------------------------
             1,959                 23,508                    156                305,604            $28,793,069
----------------------------------------------------------------------------------------------------------------

    The Departments estimate the total one-time hour burden for all 
health insurance issuers and TPAs of 2,527,110 hours and an equivalent 
associated cost of approximately $230,686,747 to develop and build the 
Allowed Amount File to meet the requirements of these proposed rules. 
In subsequent years, the Departments estimate the total annual hour 
burden of 305,604 hours to maintain and update the Allowed Amount File 
with an annual equivalent associated cost of approximately $28,793,069. 
The Departments estimate the average annual total hour burden,

[[Page 65510]]

for all health insurance issuers and TPAs, over three years, would be 
1,046,106 hours with an average annual total equivalent associated cost 
of $96,090,961.

TABLE 15--Estimated Three Year Average Annual Hour Burden and Costs for All Health Insurance Issuers and TPAs To Develop and Maintain the Out-of-Network
                                                                   Allowed Amount File
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                Estimated number
                                                                    of health                          Burden per       Total annual     Total estimated
                             Year                                   insurance         Responses        respondent      burden (hours)      labor cost
                                                                issuers and TPAs                         (hours)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2020..........................................................             1,959             1,959             1,290         2,527,110      $230,686,747
2021..........................................................             1,959            23,508               156           305,604        28,793,069
2022..........................................................             1,959            23,508               156           305,604        28,793,069
3 year Average................................................             1,959            16,325               534         1,046,106        96,090,961
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The Departments solicit comment for this collection of information 
related to all aspects of the estimated hour burden and costs. 
Specifically, the Departments seek comment related to any technical or 
operational difficulties associated with maintaining current and up-to-
date provider network information or any out-of-network allowed amounts 
for covered items and services. The Departments also seek comment 
related to the technical and labor requirements or costs that may be 
required to meet the requirements proposed in this rule; specifically, 
any factors that could minimize the frequency of updates that health 
insurance issuers or TPAs would be required to make to the Allowed 
Amount File.
    The Departments solicit comment for this collection of information 
related to all aspects of the estimated hour burden and costs. 
Specifically, the Departments seek comment related to any technical or 
operational difficulties associated with collecting data and 
maintaining any out-of-network allowed amounts for covered items and 
services; including, any difficulties associated with the adjudication 
of paid claims, incorporating covered items or services furnished by a 
particular out-of-network provider during the 90-day time period that 
begins 180 days prior to the publication date of the machine-readable 
file. The Departments also seek comment related to the technical and 
labor requirements or costs that may be required to meet the 
requirements proposed in this rule; specifically, any factors that 
could minimize the burden and costs associated with updates that health 
insurance issuers or TPAs would be required to make to the Allowed 
Amount File.
    The Departments also propose that a group health plan may satisfy 
the proposed requirements by making available the historical amounts 
paid to out-of-network providers by its health insurance issuer or 
service provider that includes allowed amounts information on the 
issuer's or service provider's book of business and a plan or issuer 
may rely on information provided by its claims clearinghouse in 
aggregate. To the extent a plan or issuer is providing out-of-network 
historical payment information in the aggregate, the Departments 
further propose to apply the 10 minimum claims threshold to the 
aggregated claims data set, and not at the plan or issuer level.
    The Departments acknowledge that as many as 95 percent of group 
health plans and health insurance issuers might already contract with 
claims clearinghouses that currently collect some or all of the 
information required to be disclosed under these proposed rules and 
might easily be able meet the requirements in these proposed rules, 
potentially obviating the need for the plan, issuer, or TPA to invest 
in IT system development. The Departments assume that these plans, 
issuers, and TPAs would still incur burden, albeit reduced, related to 
oversight and quality assurance related to any associated clearinghouse 
activities. The Departments seek comment on existing efficiencies, such 
as the use of clearinghouses that could be leveraged by plans, issuers, 
and TPAs related to the development and updating of the required 
machine-readable files and how many health insurance issuers, TPAs, or 
self-insured plans may already contract with clearinghouses that 
collect the information required and may be able to fulfill 
requirements in these proposed rules.
    The Departments understand that plans and issuers may include ``gag 
clauses'' in their provider contracting agreements, which prevent 
disclosure of negotiated rates. The Departments seek comment on whether 
such agreements would need to be renegotiated to remove such clauses, 
and, if so, seek comment regarding any costs and burden associated with 
this action. In conjunction with these proposed rules, CMS is seeking 
an OMB control number and approval for the proposed information 
collection (OMB control number: 0938-NEW (Transparency in Coverage 
(CMS-10715)). CMS is proposing to require the following information 
collections to include the following burden. DOL and Treasury will 
submit their burden estimates upon approval.
2. ICRs Regarding Medical Loss Ratio (45 CFR 158.221)
    HHS proposes to amend Sec.  158.221 to allow issuers to include in 
the MLR numerator shared savings payments made to enrollees as a result 
of the enrollee choosing to obtain health care from a lower-cost 
provider. HHS does not anticipate that implementing this provision 
would require significant changes to the MLR annual reporting form and 
the associated burden. The burden related to this collection is 
currently approved under OMB Control Number 0938-1164 (Exp. 10/31/
2020); Medical Loss Ratio Annual Reports, MLR Notices, and 
Recordkeeping Requirements.
3. Summary of Annual Burden Estimates for Proposed Requirements

[[Page 65511]]



                             Table 16--Estimated Three Year Average Proposed Annual Recordkeeping and Reporting Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   Total
                                                          Number of    Number of    Burden per     annual     Labor cost of    Mailing
       Regulation section(s)          OMB control No.    respondents   responses     response      burden     reporting ($)    cost ($)   Total cost ($)
                                                                                     (hours)      (hours)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sec.  Sec.   54.9815-               0938-NEW *                 1,959        1,959          933    1,827,094    $161,494,083           $0    $161,494,083
 2715A(b)(2)(i); 2590.715-
 2715A(b)(2)(i); and
 147.210(b)(2)(i).
Sec.  Sec.   54.9815-               0938-NEW                   1,306       77,400           10       19,350         678,411       35,604         714,015
 2715A(b)(2)(ii); 2590.715-
 2715A(b)(2)(ii); and
 147.210(b)(2)(ii).
Sec.  Sec.   54.9815-2715A(c);      0938-NEW                   1,959       16,325          637    1,247,230     117,507,376            0     117,507,376
 2590.715-2715A(c); and
 147.210(c)(1)(i).
Sec.  Sec.   54.9815-               0938-NEW                   1,959       16,325          534    1,046,106      96,090,961            0      96,090,961
 2715A(c)(1)(ii); 2590.715-
 2715A(c)(1)(ii); and
 147.210(c)(1)(ii).
rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
    Total.........................  ...................  ...........      112,009        2,113    4,139,780     375,770,831       35,604     375,806,435
--------------------------------------------------------------------------------------------------------------------------------------------------------
* High-end three year estimated values are represented in the table and used to determine the overall estimated three-year average.

    For PRA purposes the Departments are splitting the burden; where 
CMS will account for 50 percent of the associated costs and burdens and 
the Departments of Labor and Treasury will each account for 25 percent 
of the associated costs and burdens. The hour burden for CMS will be 
2,069,890 hours with an equivalent associated cost of approximately 
$187,886,416 and a cost burden of $17,802. For the Departments of Labor 
and Treasury, each Department will account for an hour burden of 
1,034,945 hours with an equivalent associated cost of approximately 
$93,942,708 and a cost burden of $8,901.

B. Submission of PRA-Related Comments

    The Departments have submitted a copy of these proposed rules to 
the OMB for its review of the rule's information collection and 
recordkeeping requirements. These requirements are not effective until 
they have been approved by OMB.
Department of Health and Human Services
    To obtain copies of the supporting statement and any related forms 
for the proposed collections discussed earlier in this preamble, please 
visit CMS's website at www.cms.hhs.gov/PaperworkReductionActof1995, or 
call the Reports Clearance Office at 410-786-1326.
    The Departments invite public comments on these potential 
information collection requirements. If you wish to comment, please 
submit your comments electronically as specified in the ADDRESSES 
section of these proposed rules and identify the rule (CMS-9915-P), the 
ICR's CFR citation, CMS ID number, and OMB control number.
    ICR-related comments are due January 27, 2020.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act, (5 U.S.C. 601, et seq.), requires 
agencies to prepare an initial regulatory flexibility analysis to 
describe the impact of proposed rules on small entities, unless the 
head of the agency can certify that the rule would not have a 
significant economic impact on a substantial number of small entities. 
The RFA generally defines a ``small entity'' as (1) a proprietary firm 
meeting the size standards of the Small Business Administration (SBA), 
(2) a not-for-profit organization that is not dominant in its field, or 
(3) a small government jurisdiction with a population of less than 
50,000. States and individuals are not included in the definition of 
``small entity.'' HHS uses a change in revenues of more than three to 
five percent as its measure of significant economic impact on a 
substantial number of small entities.
    These proposed rules propose to require that group health plans and 
health insurance issuers disclose to a participant, beneficiary, or 
enrollee (or his or her authorized representative) such individual's 
cost-sharing information for covered items or services from a 
particular provider or providers. The Departments are of the view that 
these issuers generally exceed the size thresholds for ``small 
entities'' established by the SBA, this, the Departments are not of the 
view that an initial regulatory flexibility analysis is required for 
such firms. ERISA covered plans are often small entities. While the 
Departments' are of the view that these plans would rely on the larger 
health insurance issuers and TPAs to comply with these proposed rules, 
they would still experience increased costs due to the requirements as 
the costs are passed onto them. However, the Departments are not of the 
view that the additional costs meet the significant impact requirement. 
These assertions are discussed later in this section of the preamble. 
In addition, while the requirements of this proposal do not apply to 
providers, providers may experience a loss in revenue as a result of 
the demands of price sensitive consumers and plans, and because smaller 
issuers may be unwilling to continue paying higher rates than larger 
issuers for the same items and services.
    The Departments are of the view that health insurance issuers would 
be classified under the North American Industry Classification System 
code 524114 (Direct Health and Medical Insurance Carriers). According 
to SBA size standards, entities with average annual receipts of $41.5 
million or less would be considered small entities for these North 
American Industry Classification System codes. Issuers could possibly 
be classified in 621491 (HMO Medical Centers) and, if this is the case, 
the SBA size standard would be $35 million or less.\118\ The 
Departments are of the view that few, if any, insurance companies 
underwriting comprehensive health insurance policies (in contrast, for 
example, to travel insurance policies or dental discount policies) fall 
below these size thresholds. Based on data from MLR annual report \119\ 
submissions for the 2017 MLR reporting year, approximately 90 out of 
500 issuers of health insurance coverage nationwide had total premium 
revenue of $41.5 million or less. This estimate may overstate the 
actual number of small health insurance companies that may be affected, 
since over 72 percent of these small companies belong to larger holding 
groups, and most, if not all, of these small companies are likely to 
have non-health lines of business that will result

[[Page 65512]]

in their revenues exceeding $41.5 million. The Departments are of the 
view that these same assumptions apply to those TPAs that would be 
affected by the proposed rules. The Departments do not expect any of 
these 90 potentially small entities to experience a change in rebates 
under the proposed amendments to the MLR provisions of these proposed 
rules in part 158. The Departments acknowledge that it may be likely 
that a number of small entities might enter into contracts with other 
entities in order to meet the requirements in the proposed rules, 
perhaps allowing for the development of economies of scale. Due to the 
lack of knowledge regarding what small entities may decide to do in 
order to meet these requirements and any costs they might incur related 
to contracts, the Departments seek comment on ways that the proposed 
rules will impose additional costs and burdens on small entities and 
how many would be likely engage in contracts to meet the requirements.
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    \118\ ``Table of Small Business Size Standards Matched to North 
American Industry Classification System Codes.'' U.S. Small Business 
Administration. Available at: https://www.sba.gov/sites/default/files/2019-08/SBA%20Table%20of%20Size%20Standards_Effective%20Aug%2019%2C%202019_Rev.pdf.
    \119\ ``Medical Loss Ratio Data and System Resources.'' CCIIO. 
Available at https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.html.
---------------------------------------------------------------------------

    For purposes of the RFA, the Department of Labor continues to 
consider a small entity to be an employee benefit plan with fewer than 
100 participants.\120\ Further, while some large employers may have 
small plans, in general small employers maintain most small plans. 
Thus, the Departments are of the view that assessing the impact of 
these proposed rules on small plans is an appropriate substitute for 
evaluating the effect on small entities. The definition of small entity 
considered appropriate for this purpose differs, however, from a 
definition of small business that is based on size standards 
promulgated by the SBA (13 CFR 121.201) pursuant to the Small Business 
Act (15 U.S.C. 631, et seq.). Therefore, EBSA requests comments on the 
appropriateness of the size standard used in evaluating the impact of 
these proposed rules on small entities. Using this definition of small, 
about 2,160,743 of the approximately 2,327,339 plans are small 
entities. Using a threshold approach, if the total costs of the 
proposed rules were spread evenly across all 1,754 issuers, 205 TPAs, 
and 2,327,339 ERISA health plans, without considering size, using the 
three-year average costs, the per-entity costs could be $159.70 
($371,990,734/2,329,298). Instead, if those costs are spread evenly 
across the estimated 193.5 million \121\ beneficiaries, participants, 
or enrollees enrolled in plans or issuers required to comply with the 
requirements then the average cost per covered individual would be 
$1.92 ($371,990,734/193.5 million). Neither the cost per entity nor the 
cost per covered individual is a significant impact.
---------------------------------------------------------------------------

    \120\ The basis for this definition is found in section 
104(a)(2) of ERISA, which permits the Secretary of Labor to 
prescribe simplified annual reports for pension plans that cover 
fewer than 100 participants.
    \121\ EBSA estimates that in 2016 there were 135.7 million 
covered individuals with private sector and 44.1 million with public 
sector employer sponsored coverage (available at: https://www.dol.gov/sites/dolgov/files/EBSA/researchers/data/health-and-welfare/health-insurance-coverage-bulletin-2016.pdf). Kaiser Family 
Foundation reports 13.7 million enrollees in the individual market 
for the first quarter of 2019 (available at: https://www.kff.org/private-insurance/issue-brief/data-note-changes-in-enrollment-in-the-individual-health-insurance-market-through-early-2019/).
---------------------------------------------------------------------------

    In addition, section 1102(b) of the SSA (42 U.S.C. 1302) requires 
us to prepare a regulatory impact analysis if a rule may have a 
significant impact on the operations of a substantial number of small 
rural hospitals. This analysis must conform to the provisions of 
section 603 of the RFA. For purposes of section 1102(b) of the SSA, the 
Departments define a small rural hospital as a hospital that is located 
outside of a metropolitan statistical area and has fewer than 100 beds. 
These proposed rules would not affect small rural hospitals. Therefore, 
the Departments have determined that this would not have a significant 
impact on the operations of a substantial number of small rural 
hospitals.
Impact of Regulations on Small Business--Department of the Treasury
    Pursuant to section 7805(f) of the Code, these proposed rules have 
been submitted to the Chief Counsel for Advocacy of the SBA for comment 
on their impact on small business.

D. Unfunded Mandates

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) 
requires that agencies assess anticipated costs and benefits and take 
certain actions before issuing a proposed rule that includes any 
federal mandate that may result in expenditures in any one year by a 
state, local, or tribal governments, in the aggregate, or by the 
private sector, of $100 million in 1995 dollars, updated annually for 
inflation. In 2019, that threshold is approximately $154 million.
    State, local, or tribal governments may incur cost to enforce some 
of the requirements of these proposed rules. These proposed rules 
include instructions for disclosures that would affect private sector 
firms (for example, health insurance issuers offering coverage in the 
individual and group markets, and TPAs providing administrative 
services to group health plans). The Departments acknowledge that state 
governments could incur costs associated with enforcement of sections 
within these proposed rules and although the Departments have not been 
able to quantify all costs, the Departments expect the combined impact 
on state, local, or Tribal governments and the private sector to be 
below the threshold.

E. Federalism

    Executive Order 13132 establishes certain requirements that an 
agency must meet when it issues a proposed rule that imposes 
substantial direct costs on state and local governments, preempts state 
law, or otherwise has federalism implications. Federal agencies 
promulgating regulations that have federalism implications must consult 
with state and local officials and describe the extent of their 
consultation and the nature of the concerns of state and local 
officials in the preamble to the regulation.
    In the Departments' view, these proposed rules may have federalism 
implications, because it would have direct effects on the states, the 
relationship between national governments and states, or on the 
distribution of power and responsibilities among various levels of 
government relating to the disclosure of health insurance coverage 
information to consumers.
    Under these proposed rules, all group health plans and health 
insurance issuers, including self-insured, non-federal governmental 
group health plans as defined in section 2791 of the PHS Act, would be 
required to develop an internet-based online tool or non-internet 
disclosure method to disclose to a participant, beneficiary, or 
enrollee (or an authorized representative on behalf of such 
individual), the consumer-specific estimated cost-sharing liability for 
covered items or services from a particular provider. These proposed 
rules also include proposals to require plans and issuers to disclose 
provider negotiated rates and historical data on out-of-network allowed 
amounts through a digital file in a machine-readable format posted 
publicly on an internet website. Such federal standards developed under 
section 2715A of the PHS Act would preempt any related state standards 
that require pricing information to be disclosed to the participant, 
beneficiary, or enrollee, or otherwise publicly disclosed to the extent 
the state disclosure requirements would provide less information to the 
consumer or the public than what is required under this

[[Page 65513]]

rule and the statutory authority under which it is promulgated.
    The Departments are of the view that these proposed rules may have 
federalism implications based on the required disclosure of pricing 
information, as the Departments are aware of at least 28 states that 
have passed some form of price-transparency legislation.\122\ Under 
these state provisions, state requirements vary broadly in terms of the 
level of disclosure required,\123\ some states list the price for each 
individual service, whereas some states list the aggregate costs across 
providers and over time to measure the price associated with an episode 
of illness. States also differ in terms of the dissemination of the 
information. For example, California mandates that uninsured patients 
receive estimated prices on request. In contrast, other states use 
websites or software applications (or apps) that allow consumers to 
compare prices across providers. Still, only seven states have 
published the pricing information of health insurance issuers on 
consumer-facing public websites.\124\ Thus, to the extent the 
disclosure provision these proposed rules required additional 
information to be disclosed, this proposed rule would require a higher 
level of disclosure by plans and issuers.
---------------------------------------------------------------------------

    \122\ ``Transparency and disclosure of health costs and provider 
payments: state actions.'' National Conference of State 
Legislatures. March 2017. Available at: https://www.ncsl.org/reserach/health/transparency-and-disclosure-health-costs.aspx.
    \123\ Mehrotra, A., Chernew, M., Sinaiko, A. ``Promise and 
Reality of Price Transparency.'' 14 N. Engl. J. Med. 378. April 5, 
2018. Available at: https://www.nejm.org/doi/full/10.1056/NEJMhpr1715229.
    \124\ Evans, M. ``One State's Effort to Publicize Hospital 
Prices Brings Mixed Results.'' Wall Street Journal. June 26, 2019. 
Available at: https://www.wsj.com/articles/one-states-effort-to-publicize-hospital-prices-brings-mixed-results-11561555562.
---------------------------------------------------------------------------

    In general, through section 514, ERISA supersedes state laws to the 
extent that they relate to any covered employee benefit plan, and 
preserves state laws that regulate insurance, banking, or securities. 
While ERISA prohibits states from regulating a plan as an insurance or 
investment company or bank, the preemption provisions of section 731 of 
ERISA and section 2724 of the PHS Act (implemented in 29 CFR 
2590.731(a) and 45 CFR 146.143(a)) apply so that the HIPAA requirements 
(including those of PPACA) are not to be ``construed to supersede any 
provision of states law which establishes, implements, or continues in 
effect any standard or requirement solely relating to health insurance 
issuers in connection with group health insurance coverage except to 
the extent that such standard or requirement prevents the application 
of a ``requirement'' of a federal standard. The conference report 
accompanying HIPAA indicates that this is intended to be the 
``narrowest'' preemption of states laws (See House Conf. Rep. No. 104- 
736, at 205, reprinted in 1996 U.S. Code Cong. & Admin. News 2018). 
States may continue to apply state law requirements to health insurance 
issuers except to the extent that such requirements prevent the 
application of PPACA requirements that are the subject of this 
rulemaking. Accordingly, states have significant latitude to impose 
requirements on health insurance issuers that are more restrictive than 
the federal law.
    In compliance with the requirement of Executive Order 13132 that 
agencies examine closely any policies that may have federalism 
implications or limit the policy making discretion of the states, the 
Departments have engaged in efforts to consult with and work 
cooperatively with affected states, including participating in 
conference calls with and attending conferences of the National 
Association of Insurance Commissioners, and consulting with state 
insurance officials on an individual basis. It is expected that the 
Departments act in a similar fashion in enforcing PPACA, including the 
provisions of section 2715A of the PHS Act. While developing this rule, 
the Departments attempted to balance the states' interests in 
regulating health insurance issuers with Congress' intent to provide an 
improved level of price transparency to consumers in every state. By 
doing so, it is the Departments' view that they have complied with the 
requirements of Executive Order 13132.
    Pursuant to the requirements set forth in section 8(a) of Executive 
Order 13132, and by the signatures affixed to this proposed rule, the 
Departments certify that the Department of Treasury, Employee Benefits 
Security Administration and the Centers for Medicare & Medicaid 
Services have complied with the requirements of Executive Order 13132 
for the attached proposed rule in a meaningful and timely manner.

F. Congressional Review Act

    These proposed rules are subject to the Congressional Review Act 
provisions of the Small Business Regulatory Enforcement Fairness Act of 
1996 (5 U.S.C. 801, et seq.), which specifies that before a rule can 
take effect, the federal agency promulgating the rule shall submit to 
each House of the Congress and to the Comptroller General a report 
containing a copy of the rule along with other specified information, 
and has been transmitted to the Congress and the Comptroller for 
review.

G. Reducing Regulation and Controlling Regulatory Costs

    Executive Order 13771, titled Reducing Regulation and Controlling 
Regulatory Costs, was issued on January 30, 2017. Section 2(a) of 
Executive Order 13771 requires an agency, unless prohibited by law, to 
identify at least two existing regulations to be repealed when the 
agency publicly proposes for notice and comment, or otherwise issues, a 
new regulation. In furtherance of this requirement, section 2(c) of 
Executive Order 13771 requires that the new incremental costs 
associated with new regulations shall, to the extent permitted by law, 
be offset by the elimination of existing costs associated with at least 
two prior regulations.
    The designation of this rule, if finalized, would be informed by 
public comments received; however, these proposed rules, if finalized 
as proposed, would be an E.O. 13771 regulatory action.\125\
---------------------------------------------------------------------------

    \125\ The Departments estimate cost of approximately $877.31 
million in 2020 and annual cost of approximately $127.55 million 
thereafter. Thus the annualized value of cost, as of 2016 and 
calculated over a perpetual time horizon with a 7 percent discount 
rate, is $128.86 million.
---------------------------------------------------------------------------

IX. Statutory Authority

    The Department of the Treasury regulations are proposed to be 
adopted pursuant to the authority contained in sections 7805 and 9833 
of the Code.
    The Department of Labor regulations are proposed to be adopted 
pursuant to the authority contained in 29 U.S.C. 1135, 1185d and 1191c; 
and Secretary of Labor's Order 1-2011, 77 FR 1088 (Jan. 9, 2012).
    The Department of Health and Human Services regulations are 
proposed to be adopted pursuant to the authority contained in sections 
2701 through 2763, 2791, 2792 and 2794 of the PHS Act (42 U.S.C. 300gg 
through 300gg-63, 300gg-91, 300gg-92 and 300gg-94), as amended.

List of Subjects

26 CFR Part 54

    Excise taxes, Health care, Health insurance, Pensions, Reporting 
and recordkeeping requirements.

29 CFR Part 2590

    Continuation coverage, Disclosure, Employee benefit plans, Group 
health plans, Health care, Health insurance,

[[Page 65514]]

Medical child support, Reporting and recordkeeping requirements.

45 CFR Part 147

    Health care, Health insurance, Reporting and recordkeeping 
requirements, State regulation of health insurance.

45 CFR Part 158

    Administrative practice and procedure, Claims, Health care, Health 
insurance, Penalties, Reporting and recordkeeping requirements.

 Sunita Lough,
Deputy Commissioner for Services and Enforcement, Internal Revenue 
Service.
    Signed at Washington, DC, this 12th day of November, 2019.
Preston Rutledge,
Assistant Secretary, Employee Benefits Security Administration, 
Department of Labor.
    Dated: November 5, 2019.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
    Dated: November 7, 2019.
Alex M. Azar II,
Secretary, Department of Health and Human Services.

DEPARTMENT OF THE TREASURY

Internal Revenue Service

Proposed Amendments to the Regulations

    Accordingly, 26 CFR part 54 is proposed to be amended as follows:

PART 54--PENSION EXCISE TAXES

0
Paragraph 1. The authority citation for part 54 is amended by adding an 
entry for Sec.  54.9815-2715A in numerical order to read in part as 
follows:

    Authority: 26 U.S.C. 7805 * * *
    Section 54.9815-2715A is also issued under 26 U.S.C. 9833;
* * * * *

0
Par. 2. Section 54.9815-2715A is added to read as follows:


Sec.  54.9815-2715A  Transparency in coverage.

    (a) Scope and definitions--(1) Scope. This section establishes 
price transparency requirements for group health plans and health 
insurance issuers offering group health insurance coverage for the 
timely disclosure of information about costs related to covered items 
and services under a group health plan or health insurance coverage.
    (2) Definitions. For purposes of this section, the following 
definitions apply:
    (i) Accumulated amounts means:
    (A) The amount of financial responsibility a participant or 
beneficiary has incurred at the time a request for cost-sharing 
information is made, either with respect to a deductible or out-of-
pocket limit. If an individual is enrolled in other-than-self-only 
coverage, these accumulated amounts would include the financial 
responsibility a participant or beneficiary has incurred toward meeting 
his or her individual deductible and/or out-of-pocket limit, as well as 
the amount of financial responsibility that the individuals enrolled 
under the plan or coverage have incurred toward meeting the other-than-
self-only deductible and/or out-of-pocket limit, as applicable. 
Accumulated amounts include any expense that counts toward a deductible 
or out-of-pocket limit (such as a copayment or coinsurance), but 
excludes any expense that does not count toward a deductible or out-of-
pocket limit (such as any premium payment, out-of-pocket expense for 
out-of-network services, or amount for items or services not covered 
under the group health plan or health insurance coverage); and
    (B) To the extent a group health plan or health insurance issuer 
imposes a cumulative treatment limitation on a particular covered item 
or service (such as a limit on the number of items, days, units, 
visits, or hours covered in a defined time period) independent of 
individual medical necessity determinations, the amount that has 
accrued toward the limit on the item or service (such as the number of 
items, days, units, visits, or hours the participant or beneficiary has 
used).
    (ii) Beneficiary has the meaning given the term under section 3(8) 
of the Employee Retirement Income Security Act of 1974 (ERISA).
    (iii) Billing code means the code used by a group health plan or 
health insurance issuer or its in-network providers to identify health 
care items or services for purposes of billing, adjudicating, and 
paying claims for a covered item or service, including the Current 
Procedural Terminology (CPT) code, Healthcare Common Procedure Coding 
System (HCPCS) code, Diagnosis-Related Group (DRG) code, National Drug 
Code (NDC), or other common payer identifier.
    (iv) Bundled payment means a payment model under which a provider 
is paid a single payment for all covered items and services provided to 
a patient for a specific treatment or procedure.
    (v) Cost-sharing liability means the amount a participant or 
beneficiary is responsible for paying for a covered item or service 
under the terms of the group health plan or health insurance coverage. 
Cost-sharing liability generally includes deductibles, coinsurance, and 
copayments, but it does not include premiums, balance billing amounts 
for out-of-network providers, or the cost of items or services that are 
not covered under a group health plan or health insurance coverage.
    (vi) Cost-sharing information means information related to any 
expenditure required by or on behalf of a participant or beneficiary 
with respect to health care benefits that are relevant to a 
determination of a participant's or beneficiary's out-of-pocket costs 
for a particular health care item or service.
    (vii) Covered items or services means those items or services for 
which the costs are payable, in whole or in part, under the terms of a 
group health plan or health insurance coverage.
    (viii) In-network provider means a provider that is a member of the 
network of contracted providers established or recognized under a 
participant's or beneficiary's group health plan or health insurance 
coverage.
    (ix) Items or services means all encounters, procedures, medical 
tests, supplies, drugs, durable medical equipment, and fees (including 
facility fees), for which a provider charges a patient in connection 
with the provision of health care.
    (x) Machine-readable file means a digital representation of data or 
information in a file that can be imported or read by a computer system 
for further processing without human intervention, while ensuring no 
semantic meaning is lost.
    (xi) Negotiated rate means the amount a group health plan or health 
insurance issuer, or a third party on behalf of a group health plan or 
health insurance issuer, has contractually agreed to pay an in-network 
provider for covered items and services, pursuant to the terms of an 
agreement between the provider and the group health plan or health 
insurance issuer, or a third party on behalf of a group health plan or 
health insurance issuer.
    (xii) Out-of-network allowed amount means the maximum amount a 
group health plan or health insurance issuer would pay for a covered 
item or service furnished by an out-of-network provider.
    (xiii) Out-of-network provider means a provider that does not have 
a contract under a participant's or beneficiary's group health plan or 
health insurance coverage to provide items or services.
    (xiv) Out-of-pocket limit means the maximum amount that a 
participant or beneficiary is required to pay during a

[[Page 65515]]

coverage period for his or her share of the costs of covered items and 
services under his or her group health plan or health insurance 
coverage, including for self-only and other-than-self-only coverage, as 
applicable.
    (xv) Participant has the meaning given the term under section 3(7) 
of ERISA.
    (xvi) Plain language means written and presented in a manner 
calculated to be understood by the average participant or beneficiary.
    (xvii) Prerequisite means certain requirements relating to medical 
management techniques for covered items and services that must be 
satisfied before a group health plan or health insurance issuer will 
cover the item or service. Prerequisites include concurrent review, 
prior authorization, and step-therapy or fail-first protocols. The term 
prerequisite does not include medical necessity determinations 
generally or other forms of medical management techniques.
    (b) Required disclosures to participants or beneficiaries. At the 
request of a participant or beneficiary (or his or her authorized 
representative), a group health plan or health insurance issuer 
offering group or individual health insurance coverage must provide to 
the participant or beneficiary (or his or her authorized 
representative) the information required under paragraph (b)(1) of this 
section, in accordance with the method and format requirements set 
forth in paragraph (b)(2) of this section.
    (1) Required cost-sharing information. The information required 
under this paragraph (b)(1) is the following cost-sharing information, 
which is accurate at the time the request is made, with respect to a 
covered item or service and a particular provider or providers, to the 
extent relevant to the participant's or beneficiary's cost-sharing 
liability:
    (i) An estimate of the participant's or beneficiary's cost-sharing 
liability for a requested covered item or service provided by a 
provider or providers that is calculated based on the information 
described in paragraphs (b)(1)(ii) through (iv) of this section;
    (ii) Accumulated amounts the participant or beneficiary has 
incurred to date;
    (iii) Negotiated rate, reflected as a dollar amount, for an in-
network provider or providers for the requested covered item or 
service;
    (iv) Out-of-network allowed amount for the requested covered item 
or service, if the request for cost-sharing information is for a 
covered item or service furnished by an out-of-network provider;
    (v) If a participant or beneficiary requests information for an 
item or service subject to a bundled payment arrangement that includes 
the provision of multiple covered items and services, a list of the 
items and services for which cost-sharing information is being 
disclosed;
    (vi) If applicable, notification that coverage of a specific item 
or service is subject to a prerequisite; and,
    (vii) A notice that includes the following information in plain 
language:
    (A) A statement that out-of-network providers may bill participants 
or beneficiaries for the difference between a provider's bill charges 
and the sum of the amount collected from the group health plan or 
health insurance issuer and from the patient in the form of a copayment 
or coinsurance amount (the difference referred to as balance billing), 
and that the cost-sharing information provided pursuant to this 
paragraph (b)(1) does not account for these potential additional 
amounts;
    (B) A statement that the actual charges for a participant's or 
beneficiary's covered item or service may be different from an estimate 
of cost-sharing liability provided pursuant to paragraph (b)(1)(i) of 
this section, depending on the actual items or services the participant 
or beneficiary receives at the point of care;
    (C) A statement that the estimate of cost-sharing liability for a 
covered item or service is not a guarantee that benefits will be 
provided for that item or service; and
    (D) Any additional information, including other disclaimers, that 
the group health plan or health insurance issuer determines is 
appropriate, provided the additional information does not conflict with 
the information required to be provided by this paragraph (b)(1).
    (2) Required methods and formats for disclosing information to 
participants or beneficiaries (or their authorized representatives). 
The methods and formats for the disclosure required under this 
paragraph (b) are as follows:
    (i) Internet-based self-service tool. Information provided under 
this paragraph (b) must be made available in plain language, without 
subscription or other fee, through a self-service tool on an internet 
website that provides real-time responses based on cost-sharing 
information that is accurate at the time of the request. Group health 
plans and health insurance issuers must ensure that the self-service 
tool allows users to:
    (A) Search for cost-sharing information for a covered item or 
service provided by a specific in-network provider or by all in-network 
providers by inputting:
    (1) A billing code (such as CPT code 87804) or a descriptive term 
(such as ``rapid flu test''), at the option of the user;
    (2) The name of the in-network provider, if the user seeks cost-
sharing information with respect to a specific in-network provider; and
    (3) Other factors utilized by the plan or issuer that are relevant 
for determining the applicable cost-sharing information (such as 
location of service, facility name, or dosage).
    (B) Search for an out-of-network allowed amount for a covered item 
or service provided by out-of-network providers by inputting:
    (1) A billing code or descriptive term, at the option of the user; 
and
    (2) Other factors utilized by the plan or issuer that are relevant 
for determining the applicable out-of-network allowed amount (such as 
the location in which the covered item or service will be sought or 
provided).
    (C) Refine and reorder search results based on geographic proximity 
of providers, and the amount of the participant's or beneficiary's 
estimated cost-sharing liability for the covered item or service, to 
the extent the search for cost-sharing information for covered items or 
services returns multiple results.
    (ii) Paper method. Information provided under this paragraph (b) 
must be made available in plain language, without a fee, in paper form 
at the request of the participant or beneficiary (or his or her 
authorized representative). The group health plan or health insurance 
issuer is required to:
    (A) Provide the cost-sharing information in paper form pursuant to 
the individual's request, in accordance with the requirements in 
paragraphs (b)(2)(i)(A) through (C) of this section; and
    (B) Mail the cost-sharing information no later than 2 business days 
after an individual's request is received.
    (3) Special rule to prevent unnecessary duplication with respect to 
group health coverage. To the extent coverage under a group health plan 
consists of group health insurance coverage, the plan satisfies the 
requirements of this paragraph (b) if the plan requires the health 
insurance issuer offering the coverage to provide the information 
pursuant to a written agreement. Accordingly, if a health insurance 
issuer and a plan sponsor enter into a written agreement under which 
the issuer agrees to provide the information required under this 
paragraph (b) in compliance with this section, and the issuer fails to 
do so, then the issuer, but not the plan,

[[Page 65516]]

violates the transparency disclosure requirements of this paragraph 
(b).
    (c) Requirements for public disclosure of in-network provider 
negotiated rates and out-of-network allowed amounts for covered items 
and services. A group health plan or health insurance issuer must make 
available on an internet website the information required under 
paragraph (c)(1) of this section in two machine-readable files in 
accordance with the method and format requirements described in 
paragraph (c)(2) of this section and updated as required under 
paragraph (c)(3) of this section.
    (1) Required information. Machine-readable files required under 
this paragraph (c) that are made available to the public by a group 
health plan or health insurance issuer must include:
    (i) Negotiated rate machine-readable file:
    (A) The name and Employer Identification Number (EIN) or Health 
Insurance Oversight System (HIOS) identifier, as applicable, for each 
plan option or coverage offered by a health insurance issuer or group 
health plan;
    (B) A billing code or other code used by the group health plan or 
health insurance issuer to identify covered items or services for 
purposes of claims adjudication and payment, and a plain language 
description for each billing code; and
    (C) Negotiated rates that are:
    (1) Reflected as dollar amounts, with respect to each covered item 
or service under the plan or coverage that is furnished by an in-
network provider;
    (2) Associated with the National Provider Identifier (NPI) for each 
in-network provider; and
    (3) Associated with the last date of the contract term for each 
provider-specific negotiated rate that applies to each covered item or 
service, including rates for both individual items and services and 
items and services in a bundled payment arrangement.
    (ii) Out-of-network allowed amount file:
    (A) The name and Employer Identification Number (EIN) or Health 
Insurance Oversight System (HIOS) identifier, as applicable, for each 
plan option or coverage offered by a health insurance issuer or group 
health plan;
    (B) A billing code or other code used by the group health plan or 
health insurance issuer to identify covered items or services for 
purposes of claims adjudication and payment, and a plain language 
description for each billing code; and
    (C) Unique out-of-network allowed amounts with respect to covered 
items or services furnished by out-of-network providers during the 90-
day time period that begins 180 days prior to the publication date of 
the machine-readable file (except that a group health plan or health 
insurance issuer must omit such data in relation to a particular item 
or service and provider when compliance with this paragraph 
(c)(1)(ii)(C) would require the group health plan or health insurance 
issuer to report payment of out-of-network allowed amounts in 
connection with fewer than 10 different claims for payments). 
Consistent with paragraph (d)(3) of this section, nothing in this 
paragraph (c)(1)(ii)(C) requires the disclosure of information that 
would violate any applicable health information privacy law. Each 
unique out-of-network allowed amount must be:
    (1) Reflected as a dollar amount, with respect to each covered item 
or service under the plan or coverage that is furnished by an out-of-
network provider; and
    (2) Associated with the National Provider Identifier (NPI) for each 
out-of-network provider.
    (2) Required method and format for disclosing information to the 
public. The machine-readable files that must be made available under 
paragraph (c) of this section in a form and manner determined by the 
Department of Health and Human Services, the Department of Labor, and 
the Department of the Treasury. The first machine-readable file must 
include information regarding rates negotiated for in-network providers 
with each of the required elements described in paragraph (c)(1)(i) of 
this section. The second machine-readable file must include information 
related to the historical data showing allowed amounts for covered 
items and services furnished by out-of-network providers and include 
the required elements described in paragraph (c)(1)(ii) of this 
section. The machine-readable files must be publicly available and 
accessible to any person free of charge and without conditions, such as 
establishment of a user account, password, or other credentials, or 
submission of personally identifiable information to access the file.
    (3) Timing. A group health plan or health insurance issuer must 
update the machine-readable files and information required by this 
paragraph (c) monthly. The group health plan or health insurance issuer 
must clearly indicate the date that the files were most recently 
updated.
    (4) Special rules to prevent unnecessary duplication--(i) Special 
rule for insured group health plans. To the extent coverage under a 
group health plan consists of group health insurance coverage, the plan 
satisfies the requirements of this paragraph (c) if the plan requires 
the health insurance issuer offering the coverage to provide the 
information pursuant to a written agreement. Accordingly, if a health 
insurance issuer and a group health plan sponsor enter into a written 
agreement under which the issuer agrees to provide the information 
required under this paragraph (c) in compliance with this section, and 
the issuer fails to do so, then the issuer, but not the plan, violates 
the transparency disclosure requirements of this paragraph (c).
    (ii) Other contractual arrangements. A group health plan or health 
insurance issuer may satisfy the requirements under this paragraph (c) 
by entering into a written agreement under which another party (such as 
a third-party administrator or health care claims clearinghouse) will 
provide the information required by this paragraph (c) in compliance 
with this section. Notwithstanding the preceding sentence, if a group 
health plan or health insurance issuer chooses to enter into such an 
agreement and the party with which it contracts fails to provide the 
information in compliance with this paragraph (c), the group health 
plan or health insurance issuer violates the transparency disclosure 
requirements of this paragraph (c).
    (iii) Aggregation permitted for out-of-network allowed amounts. 
Nothing in this section prohibits a group health plan or health 
insurance issuer from satisfying the disclosure requirement described 
in paragraph (c)(1)(ii) of this section by disclosing out-of-network 
allowed amounts made available by, or otherwise obtained from, a health 
insurance issuer, a service provider, or other party with which the 
plan or issuer has entered into a written agreement to provide the 
information. Under such circumstances, health insurance issuers, 
service providers, or other parties with which the group health plan or 
health insurance issuer has contracted may aggregate out-of-network 
allowed amounts for more than one group health plan or insurance policy 
or contract.
    (d) Applicability. (1) The provisions of this section apply for 
plan years beginning on or after [1 year after effective date of the 
final rule]. As provided under Sec.  [thinsp]54.9815-1251, this section 
does not apply to grandfathered health plans.
    (2) This section does not apply to health reimbursement 
arrangements or other account-based group health plans defined in Sec.  
[thinsp]54.9815-2711(d)(6).

[[Page 65517]]

    (3) Nothing in the section alters or otherwise affects a group 
health plan's or health insurance issuer's duty to comply with 
requirements under other applicable state or Federal laws, including 
those governing the accessibility, privacy, or security of information 
required to be disclosed under this section, or those governing the 
ability of properly authorized representatives to access participant or 
beneficiary information held by group health plans and health insurance 
issuers.
    (4) A group health plan or health insurance issuer will not fail to 
comply with this section solely because it, acting in good faith and 
with reasonable diligence, makes an error or omission in a disclosure 
required under paragraph (b) or (c) of this section, provided that the 
plan or issuer corrects the information as soon as practicable.
    (5) A group health plan or health insurance issuer will not fail to 
comply with this section solely because, despite acting in good faith 
and with reasonable diligence, its internet website is temporarily 
inaccessible, provided that the plan or issuer makes the information 
available as soon as practicable.
    (6) To the extent compliance with this section requires a group 
health plan or health insurance issuer to obtain information from any 
other entity, the plan or issuer will not fail to comply with this 
section because it relied in good faith on information from the other 
entity, unless the plan or issuer knows, or reasonably should have 
known, that the information is incomplete or inaccurate.

DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Chapter XXV

    For the reasons stated in the preamble, the Department of Labor 
proposes to amend 29 CFR part 2590 as follows:

PART 2590--RULES AND REGULATIONS FOR GROUP HEALTH PLANS

0
3. The authority citation for part 2590 continues to read as follows:

    Authority: 29 U.S.C. 1027, 1059, 1135, 1161-1168, 1169, 1181-
1183, 1181 note, 1185, 1185a, 1185b, 1191, 1191a, 1191b, and 1191c; 
sec. 101(g), Pub. L. 104-191, 110 Stat. 1936; sec. 401(b), Pub. L. 
105-200, 112 Stat. 645 (42 U.S.C. 651 note); sec. 512(d), Pub. L. 
110-343, 122 Stat. 3881; sec. 1001, 1201, and 1562(e), Pub. L. 111-
148, 124 Stat. 119, as amended by Pub. L. 111-152, 124 Stat. 1029; 
Secretary of Labor's Order 1-2011, 77 FR 1088 (Jan. 9, 2012).

0
4. Section 2590.715-2715A is added to read as follows:


Sec.  2590.715-2715A  Transparency in coverage.

    (a) Scope and definitions--(1) Scope. This section establishes 
price transparency requirements for group health plans and health 
insurance issuers offering group health insurance coverage for the 
timely disclosure of information about costs related to covered items 
and services under a group health plan or health insurance coverage.
    (2) Definitions. For purposes of this section, the following 
definitions apply:
    (i) Accumulated amounts means:
    (A) The amount of financial responsibility a participant or 
beneficiary has incurred at the time a request for cost-sharing 
information is made, either with respect to a deductible or out-of-
pocket limit. If an individual is enrolled in other-than-self-only 
coverage, these accumulated amounts would include the financial 
responsibility a participant or beneficiary has incurred toward meeting 
his or her individual deductible and/or out-of-pocket limit, as well as 
the amount of financial responsibility that has been incurred toward 
meeting the other-than-self-only deductible and/or out-of-pocket limit, 
as applicable. Accumulated amounts include any expense that counts 
toward a deductible or out-of-pocket limit (such as a copayment or 
coinsurance), but excludes any expense that does not count toward a 
deductible or out-of-pocket limit (such as any premium payment, out-of-
pocket expense for out-of-network services, or amount for items or 
services not covered under the group health plan or health insurance 
coverage); and
    (B) To the extent a group health plan or health insurance issuer 
imposes a cumulative treatment limitation on a particular covered item 
or service (such as a limit on the number of items, days, units, 
visits, or hours covered in a defined time period) independent of 
individual medical necessity determinations, the amount that has 
accrued toward the limit on the item or service (such as the number of 
items, days, units, visits, or hours the participant or beneficiary has 
used).
    (ii) Billing code means the code used by a group health plan or 
health insurance issuer or its in-network providers to identify health 
care items or services for purposes of billing, adjudicating, and 
paying claims for a covered item or service, including the Current 
Procedural Terminology (CPT) code, Healthcare Common Procedure Coding 
System (HCPCS) code, Diagnosis-Related Group (DRG) code, National Drug 
Code (NDC), or other common payer identifier.
    (iii) Bundled payment means a payment model under which a provider 
is paid a single payment for all covered items and services provided to 
a patient for a specific treatment or procedure.
    (iv) Cost-sharing liability means the amount a participant or 
beneficiary is responsible for paying for a covered item or service 
under the terms of the group health plan or health insurance coverage. 
Cost-sharing liability generally includes deductibles, coinsurance, and 
copayments, but it does not include premiums, balance billing amounts 
for out-of-network providers, or the cost of items or services that are 
not covered under a group health plan or health insurance coverage.
    (v) Cost-sharing information means information related to any 
expenditure required by or on behalf of a participant or beneficiary 
with respect to health care benefits that are relevant to a 
determination of a participant's or beneficiary's out-of-pocket costs 
for a particular health care item or service.
    (vi) Covered items or services means those items or services for 
which the costs are payable, in whole or in part, under the terms of a 
group health plan or health insurance coverage.
    (vii) In-network provider means a provider that is a member of the 
network of contracted providers established or recognized under a 
participant's or beneficiary's group health plan or health insurance 
coverage.
    (viii) Items or services means all encounters, procedures, medical 
tests, supplies, drugs, durable medical equipment, and fees (including 
facility fees), for which a provider charges a patient in connection 
with the provision of health care.
    (ix) Machine-readable file means a digital representation of data 
or information in a file that can be imported or read by a computer 
system for further processing without human intervention, while 
ensuring no semantic meaning is lost.
    (x) Negotiated rate means the amount a group health plan or health 
insurance issuer, or a third party on behalf of a group health plan or 
health insurance issuer, has contractually agreed to pay an in-network 
provider for covered items and services, pursuant to the terms of an 
agreement between the provider and the group health plan or health 
insurance issuer, or a third-party on behalf of a group health plan or 
health insurance issuer.

[[Page 65518]]

    (xi) Out-of-network allowed amount means the maximum amount a group 
health plan or health insurance issuer would pay for a covered item or 
service furnished by an out-of-network provider.
    (xii) Out-of-network provider means a provider that does not have a 
contract under a participant's or beneficiary's group health plan or 
health insurance coverage to provide items or services.
    (xiii) Out-of-pocket limit means the maximum amount that a 
participant or beneficiary is required to pay during a coverage period 
for his or her share of the costs of covered items and services under 
his or her group health plan or health insurance coverage, including 
for self-only and other-than-self-only coverage, as applicable.
    (xiv) Plain language means written and presented in a manner 
calculated to be understood by the average participant or beneficiary.
    (xv) Prerequisite means certain requirements relating to medical 
management techniques for covered items and services that must be 
satisfied before a group health plan or health insurance issuer will 
cover the item or service. Prerequisites include concurrent review, 
prior authorization, and step-therapy or fail-first protocols. The term 
prerequisite does not include medical necessity determinations 
generally or other forms of medical management techniques.
    (b) Required disclosures to participants or beneficiaries. At the 
request of a participant or beneficiary (or his or her authorized 
representative), a group health plan or health insurance issuer 
offering group coverage must provide to a participant or beneficiary 
(or his or her authorized representative) the information required 
under paragraph (b)(1) of this section, in accordance with the method 
and format requirements set forth in paragraph (b)(2) of this section.
    (1) Required cost-sharing information. The information required 
under this paragraph (b)(1) is the following cost-sharing information, 
which is accurate at the time the request is made, with respect to a 
covered item or service and a particular provider or providers, to the 
extent relevant to the participant's or beneficiary's cost-sharing 
liability:
    (i) An estimate of the participant's or beneficiary's cost-sharing 
liability for a requested covered item or service provided by a 
provider or providers that is calculated based on the information 
described in paragraphs (b)(1)(ii) through (iv) of this section;
    (ii) Accumulated amounts the participant or beneficiary has 
incurred to date;
    (iii) Negotiated rate, reflected as a dollar amount, for an in-
network provider or providers for the requested covered item or 
service;
    (iv) Out-of-network allowed amount for the requested covered item 
or service, if the request for cost-sharing information is for a 
covered item or service furnished by an out-of-network provider;
    (v) If a participant or beneficiary requests information for an 
item or service subject to a bundled payment arrangement that includes 
the provision of multiple covered items and services, a list of the 
items and services for which cost-sharing information is being 
disclosed;
    (vi) If applicable, notification that coverage of a specific item 
or service is subject to a prerequisite; and,
    (vii) A notice that includes the following information in plain 
language:
    (A) A statement that out-of-network providers may bill participants 
or beneficiaries for the difference between a provider's bill charges 
and the sum of the amount collected from the group health plan or 
health insurance issuer and from the patient in the form of a copayment 
or coinsurance amount (the difference referred to as balance billing), 
and that the cost-sharing information provided pursuant to this 
paragraph (b)(1) does not account for these potential additional 
amounts;
    (B) A statement that the actual charges for a participant's or 
beneficiary's covered item or service may be different from an estimate 
of cost-sharing liability provided pursuant to paragraph (b)(1)(i) of 
this section, depending on the actual items or services the participant 
or beneficiary receives at the point of care;
    (C) A statement that the estimate of cost-sharing liability for a 
covered item or service is not a guarantee that benefits will be 
provided for that item or service; and
    (D) Any additional information, including other disclaimers, that 
the group health plan or health insurance issuer determines is 
appropriate, provided the additional information does not conflict with 
the information required to be provided by this paragraph (b)(1).
    (2) Required methods and formats for disclosing information to 
participants or beneficiaries (or his or her authorized 
representative). The methods and formats for the disclosure required 
under this paragraph (b) are as follows:
    (i) Internet-based self-service tool. Information provided under 
this paragraph (b) must be made available in plain language, without 
subscription or other fee, through a self-service tool on an internet 
website that provides real-time responses based on cost-sharing 
information that is accurate at the time of the request. Group health 
plans and health insurance issuers must ensure that the self-service 
tool allows users to:
    (A) Search for cost-sharing information for a covered item or 
service provided by a specific in-network provider or by all in-network 
providers by inputting:
    (1) A billing code (such as CPT code 87804) or a descriptive term 
(such as ``rapid flu test''), at the option of the user;
    (2) The name of the in-network provider, if the user seeks cost-
sharing information with respect to a specific in-network provider; and
    (3) Other factors utilized by the plan or issuer that are relevant 
for determining the applicable cost-sharing information (such as 
location of service, facility name, or dosage).
    (B) Search for an out-of-network allowed amount for a covered item 
or service provided by out-of-network providers by inputting:
    (1) A billing code or descriptive term; and
    (2) Other factors utilized by the plan or issuer that are relevant 
for determining the applicable out-of-network allowed amount (such as 
the location in which the covered item or service will be sought or 
provided).
    (C) Refine and reorder search results based on geographic proximity 
of providers, and the amount of the participant's or beneficiary's 
estimated cost-sharing liability for the covered item or service, to 
the extent the search for cost-sharing information for covered items or 
services returns multiple results.
    (ii) Paper method. Information provided under this paragraph (b) 
must be made available in plain language, without a fee, in paper form 
at the request of the participant or beneficiary. The group health plan 
or health insurance issuer is required to:
    (A) Provide the cost-sharing information in paper form pursuant to 
the individual's request, in accordance with the requirements in 
paragraphs (b)(2)(i)(A) through (C) of this section; and
    (B) Mail the cost-sharing information no later than 2 business days 
after an individual's request is received.
    (3) Special rule to prevent unnecessary duplication with respect to 
group health coverage. To the extent coverage under a group health plan 
consists of group health insurance coverage, the plan satisfies the 
requirements of this paragraph (b) if the plan requires the health 
insurance issuer offering the coverage to provide

[[Page 65519]]

the information pursuant to a written agreement. Accordingly, if a 
health insurance issuer and a plan sponsor enter into a written 
agreement under which the issuer agrees to provide the information 
required under this paragraph (b) in compliance with this section, and 
the issuer fails to do so, then the issuer, but not the plan, violates 
the transparency disclosure requirements of this paragraph (b).
    (c) Requirements for public disclosure of in-network provider 
negotiated rates and out-of-network allowed amounts for covered items 
and services. A group health plan or health insurance issuer must make 
available on an internet website the information required under 
paragraph (c)(1) of this section in two machine-readable files in 
accordance with the method and format requirements described in 
paragraph (c)(2) of this section and updated as required under 
paragraph (c)(3) of this section.
    (1) Required information. Machine-readable files required under 
this paragraph (c) that are made available to the public by a group 
health plan or health insurance issuer must include:
    (i) Negotiated rate machine-readable file:
    (A) The name and Employer Identification Number (EIN) or Health 
Insurance Oversight System (HIOS) identifier, as applicable, for each 
plan option or coverage offered by a health insurance issuer or group 
health plan;
    (B) A billing code or other code used by the group health plan or 
health insurance issuer to identify covered items or services for 
purposes of claims adjudication and payment, and a plain language 
description for each billing code; and
    (C) Negotiated rates that are:
    (1) Reflected as dollar amounts, with respect to each covered item 
or service under the plan or coverage that is furnished by an in-
network provider;
    (2) Associated with the National Provider Identifier (NPI) for each 
in-network provider; and
    (3) Associated with the last date of the contract term for each 
provider-specific negotiated rate that applies to each covered item or 
service, including rates for both individual items and services and 
items and services in a bundled payment arrangement.
    (ii) Out-of-network allowed amount file:
    (A) The name and Employer Identification Number (EIN) or Health 
Insurance Oversight System (HIOS) identifier, as applicable, for each 
plan option or coverage offered by a health insurance issuer or group 
health plan;
    (B) A billing code or other code used by the group health plan or 
health insurance issuer to identify covered items or services for 
purposes of claims adjudication and payment, and a plain language 
description for each billing code; and
    (C) Unique out-of-network allowed amounts with respect to covered 
items or services furnished by out-of-network providers during the 90-
day time period that begins 180 days prior to the publication date of 
the machine-readable file (except that a group health plan or health 
insurance issuer must omit such data in relation to a particular item 
or service and provider when compliance with this paragraph 
(c)(1)(ii)(C) would require the group health plan or health insurance 
issuer to report payment of out-of-network allowed amounts in 
connection with fewer than 10 different claims for payments. Consistent 
with paragraph (d)(3) of this section, nothing in this paragraph 
(c)(1)(ii)(C) requires the disclosure of information that would violate 
any applicable health information privacy law. Each unique out-of-
network allowed amount must be:
    (1) Reflected as a dollar amount, with respect to each covered item 
or service under the plan or coverage that is furnished by an out-of-
network provider; and
    (2) Associated with the National Provider Identifier (NPI) for each 
out-of-network provider.
    (2) Required method and format for disclosing information to the 
public. The machine-readable files that must be made available under 
paragraph (c) of this section in a form and manner determined by the 
Department of Health and Human Services, the Department of Labor, and 
the Department of the Treasury. The first machine-readable file must 
include information regarding rates negotiated for in-network providers 
with each of the required elements described in paragraph (c)(1)(i) of 
this section. The second machine-readable file must include information 
related to the historical data showing allowed amounts for covered 
items and services furnished by out-of-network providers and include 
the required elements described in paragraph (c)(1)(ii) of this 
section. The machine-readable files must be publicly available and 
accessible to any person free of charge and without conditions, such as 
establishment of a user account, password, or other credentials, or 
submission of personally identifiable information to access the file.
    (3) Timing. A group health plan or health insurance issuer must 
update the machine-readable files and information required by this 
paragraph (c) monthly. The group health plan or health insurance issuer 
must clearly indicate the date that the files were most recently 
updated.
    (4) Special rules to prevent unnecessary duplication--(i) Special 
rule for insured group health plans. To the extent coverage under a 
group health plan consists of group health insurance coverage, the plan 
satisfies the requirements of this paragraph (c) if the plan requires 
the health insurance issuer offering the coverage to provide the 
information pursuant to a written agreement. Accordingly, if a health 
insurance issuer and a group health plan sponsor enter into a written 
agreement under which the issuer agrees to provide the information 
required under this paragraph (c) in compliance with this section, and 
the issuer fails to do so, then the issuer, but not the plan, violates 
the transparency disclosure requirements of this paragraph (c).
    (ii) Other contractual arrangements. A group health plan or health 
insurance issuer may satisfy the requirements under this paragraph (c) 
by entering into a written agreement under which another party (such as 
a third-party administrator or health care claims clearinghouse) will 
provide the information required by this paragraph (c) in compliance 
with this section. Notwithstanding the preceding sentence, if a group 
health plan or health insurance issuer chooses to enter into such an 
agreement and the party with which it contracts fails to provide the 
information in compliance with this paragraph (c), the group health 
plan or health insurance issuer violates the transparency disclosure 
requirements of this paragraph (c).
    (iii) Aggregation permitted for out-of-network allowed amounts. 
Nothing in this section prohibits a group health plan or health 
insurance issuer from satisfying the disclosure requirement described 
in paragraph (c)(1)(ii) of this section by disclosing out-of-network 
allowed amounts made available by, or otherwise obtained from, a health 
insurance issuer, a service provider, or other party with which the 
plan or issuer has entered into a written agreement to provide the 
information. Under such circumstances, health insurance issuers, 
service providers, or other parties with which the group health plan or 
health insurance issuer has contracted may aggregate out-of-network 
allowed amounts for more than one group health plan or insurance policy 
or contract.

[[Page 65520]]

    (d) Applicability. (1) The provisions of this section apply for 
plan years beginning on or after [1 year after effective date of the 
final rule]. As provided under Sec.  2590.715-1251, this section does 
not apply to grandfathered health plans.
    (2) This section does not apply to health reimbursement 
arrangements or other account-based group health plans defined in Sec.  
2590.715-2711(d)(6).
    (3) Nothing in the section alters or otherwise affects a group 
health plan's or health insurance issuer's duty to comply with 
requirements under other applicable state or Federal laws, including 
those governing the accessibility, privacy, or security of information 
required to be disclosed under this section, or those governing the 
ability of properly authorized representatives to access participant or 
beneficiary information held by group health plans and health insurance 
issuers.
    (4) A group health plan or health insurance issuer will not fail to 
comply with this section solely because it, acting in good faith and 
with reasonable diligence, makes an error or omission in a disclosure 
required under paragraph (b) or (c) of this section, provided that the 
plan or issuer corrects the information as soon as practicable.
    (5) A group health plan or health insurance issuer will not fail to 
comply with this section solely because, despite acting in good faith 
and with reasonable diligence, its internet website is temporarily 
inaccessible, provided that the plan or issuer makes the information 
available as soon as practicable.
    (6) To the extent compliance with this section requires a group 
health plan or health insurance issuer to obtain information from any 
other entity, the plan or issuer will not fail to comply with this 
section because it relied in good faith on information from the other 
entity, unless the plan or issuer knows, or reasonably should have 
known, that the information is incomplete or inaccurate.

DEPARTMENT OF HEALTH AND HUMAN SERVICES

    For the reasons set forth in the preamble, the Department of Health 
and Human Services proposes to amend 45 CFR parts 147 and 158 as set 
forth below:

PART 147--HEALTH INSURANCE REFORM REQUIREMENTS FOR THE GROUP AND 
INDIVIDUAL HEALTH INSURANCE MARKETS

0
5. The authority citation for part 147 continues to read as follows:

    Authority: 42 U.S.C. 300gg through 300gg-63, 300gg-91, and 
300gg-92, as amended.

0
6. Section 147.210 is added to read as follows:


Sec.  147.210  Transparency in coverage.

    (a) Scope and definitions--(1) Scope. This section establishes 
price transparency requirements for group health plans and health 
insurance issuers in the individual and group markets for the timely 
disclosure of information about costs related to covered items and 
services under a group health plan or health insurance coverage.
    (2) Definitions. For purposes of this section, the following 
definitions apply:
    (i) Accumulated amounts means:
    (A) The amount of financial responsibility a participant, 
beneficiary, or enrollee has incurred at the time a request for cost-
sharing information is made, either with respect to a deductible or 
out-of-pocket limit. If an individual is enrolled in other-than-self-
only coverage, these accumulated amounts would include the financial 
responsibility a participant, beneficiary, or enrollee has incurred 
toward meeting his or her individual deductible and/or out-of-pocket 
limit, as well as the amount of financial responsibility that the 
individuals enrolled under the plan or coverage have incurred toward 
meeting the other-than-self-only deductible and/or out-of-pocket limit, 
as applicable. Accumulated amounts include any expense that counts 
toward a deductible or out-of-pocket limit (such as a copayment or 
coinsurance), but excludes any expense that does not count toward a 
deductible or out-of-pocket limit (such as any premium payment, out-of-
pocket expense for out-of-network services, or amount for items or 
services not covered under the group health plan or health insurance 
coverage); and
    (B) To the extent a group health plan or health insurance issuer 
imposes a cumulative treatment limitation on a particular covered item 
or service (such as a limit on the number of items, days, units, 
visits, or hours covered in a defined time period) independent of 
individual medical necessity determinations, the amount that has 
accrued toward the limit on the item or service (such as the number of 
items, days, units, visits, or hours the participant, beneficiary, or 
enrollee has used).
    (ii) Beneficiary has the meaning given the term under section 3(8) 
of the Employee Retirement Income Security Act of 1974 (ERISA).
    (iii) Billing code means the code used by a group health plan or 
health insurance issuer or its in-network providers to identify health 
care items or services for purposes of billing, adjudicating, and 
paying claims for a covered item or service, including the Current 
Procedural Terminology (CPT) code, Healthcare Common Procedure Coding 
System (HCPCS) code, Diagnosis-Related Group (DRG) code, National Drug 
Code (NDC), or other common payer identifier.
    (iv) Bundled payment means a payment model under which a provider 
is paid a single payment for all covered items and services provided to 
a patient for a specific treatment or procedure.
    (v) Cost-sharing liability means the amount a participant, 
beneficiary, or enrollee is responsible for paying for a covered item 
or service under the terms of the group health plan or health insurance 
coverage. Cost-sharing liability generally includes deductibles, 
coinsurance, and copayments, but it does not include premiums, balance 
billing amounts for out-of-network providers, or the cost of items or 
services that are not covered under a group health plan or health 
insurance coverage.
    (vi) Cost-sharing information means information related to any 
expenditure required by or on behalf of a participant, beneficiary, or 
enrollee with respect to health care benefits that are relevant to a 
determination of a participant's, beneficiary's, or enrollee's out-of-
pocket costs for a particular health care item or service.
    (vii) Covered items or services means those items or services for 
which the costs are payable, in whole or in part, under the terms of a 
group health plan or health insurance coverage.
    (viii) Enrollee means an individual who is covered under an 
individual health insurance policy as defined under section 2791(b)(5) 
of the PHS Act.
    (ix) In-network provider means a provider that is a member of the 
network of contracted providers established or recognized under a 
participant's, beneficiary's, or enrollee's group health plan or health 
insurance coverage.
    (x) Items or services means all encounters, procedures, medical 
tests, supplies, drugs, durable medical equipment, and fees (including 
facility fees), for which a provider charges a patient in connection 
with the provision of health care.
    (xi) Machine-readable file means a digital representation of data 
or information in a file that can be imported or read by a computer 
system for further processing without human intervention, while 
ensuring no semantic meaning is lost.

[[Page 65521]]

    (xii) Negotiated rate means the amount a group health plan or 
health insurance issuer, or a third party on behalf of a group health 
plan or health insurance issuer, has contractually agreed to pay an in-
network provider for covered items and services, pursuant to the terms 
of an agreement between the provider and the group health plan or 
health insurance issuer, or a third-party on behalf of a group health 
plan or health insurance issuer.
    (xiii) Out-of-network allowed amount means the maximum amount a 
group health plan or health insurance issuer would pay for a covered 
item or service furnished by an out-of-network provider.
    (xiv) Out-of-network provider means a provider that does not have a 
contract under a participant's, beneficiary's, or enrollee's group 
health plan or health insurance coverage to provide items or services.
    (xv) Out-of-pocket limit means the maximum amount that a 
participant, beneficiary, or enrollee is required to pay during a 
coverage period for his or her share of the costs of covered items and 
services under his or her group health plan or health insurance 
coverage, including for self-only and other-than-self-only coverage, as 
applicable.
    (xvi) Participant has the meaning given the term under section 3(7) 
of ERISA.
    (xvii) Plain language means written and presented in a manner 
calculated to be understood by the average participant, beneficiary, or 
enrollee.
    (xviii) Prerequisite means certain requirements relating to medical 
management techniques for covered items and services that must be 
satisfied before a group health plan or health insurance issuer will 
cover the item or service. Prerequisites include concurrent review, 
prior authorization, and step-therapy or fail-first protocols. The term 
prerequisite does not include medical necessity determinations 
generally or other forms of medical management techniques.
    (xix) Qualified Health Plan (QHP) has the meaning given the term in 
42 U.S.C. 18021.
    (b) Required disclosures to participants, beneficiaries, or 
enrollees. At the request of a participant, beneficiary, or enrollee 
(or his or her authorized representative), a group health plan or 
health insurance issuer offering group or individual health insurance 
coverage must provide to the participant, beneficiary, or enrollee (or 
his or her authorized representative) the information required under 
paragraph (b)(1) of this section, in accordance with the method and 
format requirements set forth in paragraph (b)(2) of this section.
    (1) Required cost-sharing information. The information required 
under this paragraph (b)(1) is the following cost-sharing information, 
which is accurate at the time the request is made, with respect to a 
covered item or service and a particular provider or providers, to the 
extent relevant to the participant's, beneficiary's, or enrollee's 
cost-sharing liability:
    (i) An estimate of the participant's, beneficiary's, or enrollee's 
cost-sharing liability for a requested covered item or service provided 
by a provider or providers which must reflect any cost-sharing 
reductions the enrollee would receive that is calculated based on the 
information described in paragraphs (b)(1)(ii) through (iv) of this 
section;
    (ii) Accumulated amounts the participant, beneficiary, or enrollee 
has incurred to date;
    (iii) Negotiated rate, reflected as a dollar amount, for an in-
network provider or providers for the requested covered item or 
service;
    (iv) Out-of-network allowed amount for the requested covered item 
or service, if the request for cost-sharing information is for a 
covered item or service furnished by an out-of-network provider;
    (v) If a participant, beneficiary, or enrollee requests information 
for an item or service subject to a bundled payment arrangement that 
includes the provision of multiple covered items and services, a list 
of the items and services for which cost-sharing information is being 
disclosed;
    (vi) If applicable, notification that coverage of a specific item 
or service is subject to a prerequisite; and,
    (vii) A notice that includes the following information in plain 
language:
    (A) A statement that out-of-network providers may bill 
participants, beneficiaries, or enrollees for the difference between a 
provider's bill charges and the sum of the amount collected from the 
group health plan or health insurance issuer and from the patient in 
the form of a copayment or coinsurance amount (the difference referred 
to as balance billing), and that the cost-sharing information provided 
pursuant to this paragraph (b)(1) does not account for these potential 
additional amounts;
    (B) A statement that the actual charges for a participant's, 
beneficiary's, or enrollee's covered item or service may be different 
from an estimate of cost-sharing liability provided pursuant to 
paragraph (b)(1)(i) of this section, depending on the actual items or 
services the participant, beneficiary, or enrollee receives at the 
point of care;
    (C) A statement that the estimate of cost-sharing liability for a 
covered item or service is not a guarantee that benefits will be 
provided for that item or service; and
    (D) Any additional information, including other disclaimers, that 
the group health plan or health insurance issuer determines is 
appropriate, provided the additional information does not conflict with 
the information required to be provided by this paragraph (b)(1).
    (2) Required methods and formats for disclosing information to 
participants, beneficiaries, or enrollees (or their authorized 
representative). The methods and formats for the disclosure required 
under this paragraph (b) are as follows:
    (i) internet-based self-service tool. Information provided under 
this paragraph (b) must be made available in plain language, without 
subscription or other fee, through a self-service tool on an internet 
website that provides real-time responses based on cost-sharing 
information that is accurate at the time of the request. Group health 
plans and health insurance issuers must ensure that the self-service 
tool allows users to:
    (A) Search for cost-sharing information for a covered item or 
service provided by a specific in-network provider or by all in-network 
providers by inputting:
    (1) A billing code (such as CPT code 87804) or a descriptive term 
(such as ``rapid flu test''), at the option of the user;
    (2) The name of the in-network provider, if the user seeks cost-
sharing information with respect to a specific in-network provider; and
    (3) Other factors utilized by the plan or issuer that are relevant 
for determining the applicable cost-sharing information (such as 
location of service, facility name, or dosage).
    (B) Search for an out-of-network allowed amount for a covered item 
or service provided by out-of-network providers by inputting:
    (1) A billing code or descriptive term, at the option of the user; 
and
    (2) Other factors utilized by the plan or issuer that are relevant 
for determining the applicable out-of-network allowed amount (such as 
the location in which the covered item or service will be sought or 
provided).
    (C) Refine and reorder search results based on geographic proximity 
of providers, and the amount of the participant's, beneficiary's, or 
enrollee's estimated cost-sharing liability for the covered item or 
service, to the extent the search for cost-sharing information for

[[Page 65522]]

covered items or services returns multiple results.
    (ii) Paper method. Information provided under this paragraph (b) 
must be made available in plain language, without a fee, in paper form 
at the request of the participant, beneficiary, or enrollee (or his or 
her authorized representative). The group health plan or health 
insurance issuer is required to:
    (A) Provide the cost-sharing information in paper form pursuant to 
the individual's request, in accordance with the requirements in 
paragraphs (b)(2)(i)(A) through (C) of this section; and
    (B) Mail the cost-sharing information no later than 2 business days 
after an individual's request is received.
    (3) Special rule to prevent unnecessary duplication with respect to 
group health coverage. To the extent coverage under a group health plan 
consists of group health insurance coverage, the plan satisfies the 
requirements of this paragraph (b) if the plan requires the health 
insurance issuer offering the coverage to provide the information 
pursuant to a written agreement. Accordingly, if a health insurance 
issuer and a plan sponsor enter into a written agreement under which 
the issuer agrees to provide the information required under this 
paragraph (b) in compliance with this section, and the issuer fails to 
do so, then the issuer, but not the plan, violates the transparency 
disclosure requirements of this paragraph (b).
    (c) Requirements for public disclosure of in-network provider 
negotiated rates and out-of-network allowed amounts for covered items 
and services. A group health plan or health insurance issuer must make 
available on an internet website the information required under 
paragraph (c)(1) of this section in two machine-readable files in 
accordance with the method and format requirements described in 
paragraph (c)(2) of this section and updated as required under 
paragraph (c)(3) of this section.
    (1) Required information. Machine-readable files required under 
this paragraph (c) that are made available to the public by a group 
health plan or health insurance issuer must include:
    (i) Negotiated rate machine-readable file:
    (A) The name and Employer Identification Number (EIN) or Health 
Insurance Oversight System (HIOS) identifier, as applicable, for each 
plan option or coverage offered by a health insurance issuer or group 
health plan;
    (B) A billing code or other code used by the group health plan or 
health insurance issuer to identify covered items or services for 
purposes of claims adjudication and payment, and a plain language 
description for each billing code; and
    (C) Negotiated rates that are:
    (1) Reflected as dollar amounts, with respect to each covered item 
or service under the plan or coverage that is furnished by an in-
network provider;
    (2) Associated with the National Provider Identifier (NPI) for each 
in-network provider; and
    (3) Associated with the last date of the contract term for each 
provider-specific negotiated rate that applies to each covered item or 
service, including rates for both individual items and services and 
items and services in a bundled payment arrangement.
    (ii) Out-of-network allowed amount file:
    (A) The name and Employer Identification Number (EIN) or Health 
Insurance Oversight System (HIOS) identifier, as applicable, for each 
plan option or coverage offered by a health insurance issuer or group 
health plan;
    (B) A billing code or other code used by the group health plan or 
health insurance issuer to identify covered items or services for 
purposes of claims adjudication and payment, and a plain language 
description for each billing code; and
    (C) Unique out-of-network allowed amounts with respect to covered 
items or services furnished by out-of-network providers during the 90-
day time period that begins 180 days prior to the publication date of 
the machine-readable file (except that a group health plan or health 
insurance issuer must omit such data in relation to a particular item 
or service and provider when compliance with this paragraph 
(c)(1)(ii)(C) would require the group health plan or health insurance 
issuer to report payment of out-of-network allowed amounts in 
connection with fewer than 10 different claims for payments. Consistent 
with paragraph (d)(3) of this section, nothing in this paragraph 
(c)(1)(ii)(C) requires the disclosure of information that would violate 
any applicable health information privacy law. Each unique out-of-
network allowed amount must be:
    (1) Reflected as a dollar amount, with respect to each covered item 
or service under the plan or coverage that is furnished by an out-of-
network provider; and
    (2) Associated with the National Provider Identifier (NPI) for each 
out-of-network provider.
    (2) Required method and format for disclosing information to the 
public. The machine-readable files that must be made available under 
paragraph (c) of this section in a form and manner determined by the 
Department of Health and Human Services, the Department of Labor, and 
the Department of the Treasury. The first machine-readable file must 
include information regarding rates negotiated for in-network providers 
with each of the required elements described in paragraph (c)(1)(i) of 
this section. The second machine-readable file must include information 
related to the historical data showing allowed amounts for covered 
items and services furnished by out-of-network providers and include 
the required elements described in paragraph (c)(1)(ii) of this 
section. The machine-readable files must be publicly available and 
accessible to any person free of charge and without conditions, such as 
establishment of a user account, password, or other credentials, or 
submission of personally identifiable information to access the file.
    (3) Timing. A group health plan or health insurance issuer must 
update the machine-readable files and information required by this 
paragraph (c) monthly. The group health plan or health insurance issuer 
must clearly indicate the date that the files were most recently 
updated.
    (4) Special rules to prevent unnecessary duplication--(i) Special 
rule for insured group health plans. To the extent coverage under a 
group health plan consists of group health insurance coverage, the plan 
satisfies the requirements of this paragraph (c) if the plan requires 
the health insurance issuer offering the coverage to provide the 
information pursuant to a written agreement. Accordingly, if a health 
insurance issuer and a group health plan sponsor enter into a written 
agreement under which the issuer agrees to provide the information 
required under this paragraph (c) in compliance with this section, and 
the issuer fails to do so, then the issuer, but not the plan, violates 
the transparency disclosure requirements of this paragraph (c).
    (ii) Other contractual arrangements. A group health plan or health 
insurance issuer may satisfy the requirements under this paragraph (c) 
by entering into a written agreement under which another party (such as 
a third-party administrator or health care claims clearinghouse) will 
provide the information required by this paragraph (c) in compliance 
with this section. Notwithstanding the preceding sentence, if a group 
health plan or health insurance issuer chooses to enter into such an 
agreement and the party with which it contracts fails to provide

[[Page 65523]]

the information in compliance with this paragraph (c), the group health 
plan or health insurance issuer violates the transparency disclosure 
requirements of this paragraph (c).
    (iii) Aggregation permitted for out-of-network allowed amounts. 
Nothing in this section prohibits a group health plan or health 
insurance issuer from satisfying the disclosure requirement described 
in paragraph (c)(1)(ii) of this section by disclosing out-of-network 
allowed amounts made available by, or otherwise obtained from, a health 
insurance issuer, a service provider, or other party with which the 
plan or issuer has entered into a written agreement to provide the 
information. Under such circumstances, health insurance issuers, 
service providers, or other parties with which the group health plan or 
health insurance issuer has contracted may aggregate out-of-network 
allowed amounts for more than one group health plan or insurance policy 
or contract.
    (d) Applicability. (1) The provisions of this section apply for 
plan years (in the individual market, for policy years) beginning on or 
after [1 year after effective date of the final rule]. As provided 
under Sec.  [thinsp]147.140, this section does not apply to 
grandfathered health plans.
    (2) This section does not apply to health reimbursement 
arrangements or other account-based group health plans defined in Sec.  
[thinsp]147.126(d)(6).
    (3) Nothing in the section alters or otherwise affects a group 
health plan's or health insurance issuer's duty to comply with 
requirements under other applicable state or Federal laws, including 
those governing the accessibility, privacy, or security of information 
required to be disclosed under this section, or those governing the 
ability of properly authorized representatives to access participant, 
beneficiary, or enrollee information held by group health plans and 
health insurance issuers.
    (4) A group health plan or health insurance issuer will not fail to 
comply with this section solely because it, acting in good faith and 
with reasonable diligence, makes an error or omission in a disclosure 
required under paragraph (b) or (c) of this section, provided that the 
plan or issuer corrects the information as soon as practicable.
    (5) A group health plan or health insurance issuer will not fail to 
comply with this section solely because, despite acting in good faith 
and with reasonable diligence, its internet website is temporarily 
inaccessible, provided that the plan or issuer makes the information 
available as soon as practicable.
    (6) To the extent compliance with this section requires a group 
health plan or health insurance issuer to obtain information from any 
other entity, the plan or issuer will not fail to comply with this 
section because it relied in good faith on information from the other 
entity, unless the plan or issuer knows, or reasonably should have 
known, that the information is incomplete or inaccurate.

PART 158--ISSUER USE OF PREMIUM REVENUE: REPORTING AND REBATE 
REQUIREMENTS

0
7. The authority citation for part 158 continues to read as follows:

    Authority: Section 2718 of the Public Health Service Act (42 
U.S.C. 300gg-18), as amended.

0
8. Section 158.221 is amended by adding paragraph (b)(9) to read as 
follows:


Sec.  158.221  Formula for calculating an issuer's medical loss ratio.

* * * * *
    (b) * * *
    (9) Beginning with the 2020 MLR reporting year, an issuer may 
include in the numerator of the MLR any shared savings payments the 
issuer has made to an enrollee as a result of the enrollee choosing to 
obtain health care from a lower-cost, higher-value provider.
* * * * *
[FR Doc. 2019-25011 Filed 11-15-19; 4:15 pm]
 BILLING CODE 4830-01-P; 4510-29-P; 4120-01-P