On December 31, 2021, New York Governor Kathy Hochul signed landmark legislation to increase the transparency of prescription drug pricing and to establish requirements on pharmacy middlemen. This new law is amongst 100 [1] state bills introduced in 2021 that shed light on the business practices of pharmacy benefit managers
price transparency
The Surprises Continue: The Biden Administration Delays Implementation of Certain Provisions of the No Surprises Act and Transparency in Coverage Final Rules Applicable to Providers and Insurers
In a FAQ published on August 20, 2021, the Departments of Labor, Health and Human Services, and the Treasury (collectively, the “Departments”) significantly delayed implementation of statutory requirements on surprise billing and price transparency, which we had previously summarized in a series of blog posts throughout this past year:
- No Surprises: Congress Enacts Surprise Bill Law and Adds Mandatory Billing Transparency
- No Surprises in Initial No Surprises Act Regulations
- New Federal Transparency Requirements Impacting Health Providers and Plans
Specifically, the FAQs focus on the implementation of certain provisions of the Affordable Care Act’s (the “ACA’s”) Transparency in Coverage Final Rules (the “TiC Final Rules”) and certain provisions of title I (the No Surprises Act) and title II (Transparency) of Division BB of the Consolidated Appropriations Act, 2021 (the “CAA”).
Proposal to Increase Penalties for a Hospital’s Failure to Comply with Price Transparency Rule
As discussed in a prior post, the Hospital Price Transparency Rule at 45 C.F.R. § 180.10 et. seq. (the “Rule”), requires all hospitals to provide clear, accessible pricing information about the items and services they provide by publicizing (1) the prices for 300 of their most “shoppable services” or services that can be scheduled by a consumer in advance; and (2) total charges, payor-specific negotiated rates, and discounted cash prices for individuals paying out-of-pocket.
Recent Study Shows Lack of Compliance With CMS’ Hospital Price Transparency Rule
In a prior blog post, we discussed CMS’ Hospital Price Transparency Rule at 45 C.F.R. § 180.10 et. seq., effective January 1, 2021 (the “Rule”), which requires hospitals to make public “a machine-readable file containing a list of all standard charges for all items and services.” Specifically, the Rule requires hospitals to post (1) a description of each item or service provided by the hospital; (2) the gross charge that applies to each individual item or service; (3) payer-specific negotiated rates that apply to each item or service for which a payer negotiated rate has been established. Each payer negotiated price must be clearly associated with the name of the applicable third-party payer and plan; (4) de-identified minimum negotiated rates that apply to each item or service; (5) de-identified maximum negotiated rates that apply to each item or service; (6) discounted cash prices that apply to each item or service; and (7) CPT, HCPCS, or other billing codes used by the hospital for purposes of accounting or billing for the item or service.
In a study published on March 16, 2021, Health Affairs found that out of the largest 100 hospitals in the U.S. (by certified bed count), 65 were “unambiguously noncompliant.” 12 of these 65 (18%) did not post any files or provided links to searchable databases that were not downloadable and 53 (82%) either did not include the payer-specific negotiated rates with the name of payer and plan clearly associated with the charges or were in some other way noncompliant. The data informing this study was pulled from late January 2021 to early February 2021.