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  • Starting July 1, consumers can access data showing how much insurers pay different providers for medical services.
  • The Transparency in Coverage Final Rule, issued by the Centers for Medicare and Medicaid Services (CMS), is being rolled out in three stages.
  • In the later phases, insurers will also have to provide an online price comparison tool that lets consumers see how much they would pay out of pocket for a service from a specific provider.

A new federal rule that took effect July 1 is providing consumers and employers with a long-awaited look at what insurers pay providers for medical care.

The Transparency in Coverage Final Rule, issued by the Centers for Medicare and Medicaid Services (CMS), is being rolled out in three stages.

For this month’s first phase, health insurers and self-insured employers must post the rates they negotiated with participating medical providers for all covered health services.

In addition, insurers must post the allowed rates for — and billed charges from — services provided by out-of-network providers.

Dr. A. Mark Fendrick, director of the University of Michigan’s Center for Value-Based Insurance Design (V-BID) in Ann Arbor, Michigan, said this rule moves the country’s healthcare system toward greater price transparency.

“Anything that provides more information so people can see what others are paying for health care is an important step forward,” he said.

For the first phase, insurers only need to make the rates available as a machine-readable file. Given the format and the large number of covered services included in the file, this information is unlikely to be useful for many consumers.

However, in the later phases insurers will also have to provide an online price comparison tool that enables consumers to see how much they would pay out of pocket for a service from a specific provider — first for 500 common (aka “shoppable”) services and then for all services.

In addition, the machine-readable data are publicly accessible, so entrepreneurs can build more user-friendly tools that allow consumers to estimate their out-of-pocket costs for medical care before they have a procedure done.

“There are plenty of experts who will be able to take these data and potentially convert them into a format that will be usable for consumers,” said Jean Abraham, PhD, a professor and health economist at the University of Minnesota School of Public Health in Minneapolis.

These third-party tools could be in place before the January 2023 phase two deadline, she added.

After a similar price transparency rule for hospitals went into effect at the beginning of 2021, Turquoise Health and other companies built online tools that allow consumers to compare prices for procedures done at hospitals in their area.

Once user-friendly online tools are in place for the insurer data, it will be easier for consumers to estimate their out-of-pocket costs, which is what most people are interested in.

“Americans don’t care about healthcare costs; they care about what it costs them,” said Fendrick. “So until these transparency rules actually provide real-time out-of-pocket costs to consumers, I am only cautiously optimistic regarding their success.”

Abraham said how useful this information also depends upon a person’s health plan.

“For example, if an enrollee has a benefit design that is flat copayments — $10 or $25 per office visit — they may be less inclined to care whether they go to doctor A or doctor B for their service,” she said.

However, people with a high-deductible plan or those with co-insurance — which requires them to pay a percentage of the cost of a service — may be more interested in paying attention to the prices, she added.

While consumers wait for the price data to be made available in a useful format, many employers will be able to start looking right away for ways to save money on healthcare costs.

“This is the first time that employers get to pull back the curtain,” said Cynthia Fisher, founder and chairperson of, a non-profit focused on promoting healthcare price transparency.

“And employers are going to be pretty surprised at how poorly some of the rates negotiated by their own carrier are, or by their third-party administrator if they’re self-insured,” she said.

If a company’s employees pay higher out-of-pocket costs for a certain service, such as an X-ray or knee replacement surgery, the employer may try to get the insurer to negotiate better rates with the providers.

If that doesn’t work, the employer could contract directly with a provider for medical care or switch to another insurer.

This could impact prices, but not in a way that some people expect.

“This might narrow the gap that different insurers pay for a service,” said Fendrick. “But it does not guarantee that the price will go down. It actually could go up.”

For example, if a doctor or other provider sees that they are being paid less for a service than other providers, they may raise their rate.

Another factor that could impact the roll-out of this rule is how quickly insurers post the price data online.

After the hospital rule had been in place for a year, only 14 percent of hospitals were in compliance, according to an analysis by

“[The hospital price transparency rule] turned out to be barely a splash at all,” said Fendrick, “because of the fact that so few hospitals actually posted their rates.”

And many of those that did post their rates didn’t make it easy for consumers to see what their out-of-pocket costs were for a particular service, he added.

This time, CMS increased the fines for insurers and self-insured employers who don’t post the data to as much as $100 a day — per violation and per health plan enrollee.

With thousands of enrollees and hundreds of covered services, this can add up quickly, so insurers might be more motivated to make the price information available sooner.

In addition, “insurers generally have pretty strong analytical and IT [information technology] capabilities,” said Abraham, which will make it easier for them to provide information to consumers.

“So it will be interesting to see what happens with insurer compliance with the rule,” she said.