Research · 10 min read
What a Plan Has to Quote You Before You Fill
A federal rule makes a plan run a price tool that answers, in real time and in plain language, what a specific covered item will cost you. Prescription drugs are inside the definition, and seven things have to come back with the number.
Key takeaways
- A federal rule requires a plan to answer a personalized cost question in real time through a free self-service tool, and prescription drugs are named inside its governing definition.
- Seven things have to come back, not one: the estimate, accumulated amounts, the in-network negotiated rate, an out-of-network allowed amount where relevant, bundle contents, prerequisite notification, and a plain-language notice.
- The notice must disclose whether the plan counts manufacturer copayment assistance toward the deductible and out-of-pocket maximum, which is a question this market raises constantly.
- A paper route exists, capped at no fewer than twenty providers per request and answered within two business days.
- The rule excludes grandfathered plans, account-based arrangements and short-term limited duration insurance, and it says in writing that an estimate is not a guarantee of benefits.
Answer first: the estimate exists and it is a duty, not a courtesy
Most people learn what a prescription costs them at the counter.
A federal rule says a plan has to answer that question in advance, on request, through a tool anyone covered can use.
The answer has to be personal rather than general. It reflects where you are in your own deductible and out-of-pocket limit.
Prescription drugs are named inside the definition the rule runs on, so this is not a rule about office visits that happens to mention pharmacy.
And the number is not the whole obligation. Six other pieces of information have to come back with it.
The definition that decides whether a drug is in scope
This is the sentence to read before anything else in the rule, because a scope clause is where most price rules stop short of a pharmacy.
Covered items or services means those items or services, including prescription drugs, the costs for which are payable, in whole or in part, under the terms of a group health plan or health insurance coverage.
A second definition repeats it. Items or services means all encounters, procedures, medical tests, supplies, prescription drugs, durable medical equipment, and fees.
A third is the reason a pharmacy claim is searchable at all. The rule defines a billing code as the code used to identify items or services for billing and paying claims, and its list includes the National Drug Code.
So the instrument is built to answer a drug question, in the identifier a drug claim actually carries.
The seven things that have to come back
The rule sets out the required cost-sharing information as a list, and it has to be accurate at the time the request is made.
First, an estimate of your cost-sharing liability for the requested item or service from a specific provider, reflecting any cost-sharing reductions you would receive.
Second, accumulated amounts. The rule defines those as what you have already incurred toward a deductible or out-of-pocket limit, and, where the plan applies a cumulative treatment limit, how much of that limit has been used.
Third, the in-network rate. That is the negotiated rate as a dollar amount, and the rule says it must be disclosed even where it is not the rate used to calculate what you pay.
Fourth, the out-of-network allowed amount, where the request concerns an out-of-network provider.
Fifth, where the request touches a bundled payment arrangement, a list of what is inside the bundle.
Sixth, notification, if applicable, that coverage of the item or service is subject to a prerequisite.
Seventh, a notice in plain language, whose contents the rule spells out.
The notice, and the sentence about savings cards
The plain-language notice carries several statements, and two of them answer questions this market generates constantly.
One is a statement disclosing whether the plan counts copayment assistance and other third-party payments in the calculation of your deductible and out-of-pocket maximum.
The rule defines copayment assistance as financial assistance received from a prescription drug or medical supply manufacturer toward the purchase of a covered item or service. That is the manufacturer card, named in a definition.
The other is a limit on what the estimate is. The notice must state that the estimate of cost-sharing liability is not a guarantee that benefits will be provided.
It must also say that actual charges may differ depending on what you actually receive at the point of care.
A statement about balance billing by out-of-network providers is required too, where state law permits that practice.
How the answer has to reach you
The rule prescribes the format as tightly as the content, which is what makes it checkable.
The primary route is an internet-based self-service tool, in plain language, without subscription or other fee, giving real-time responses.
It has to let a user search by a billing code or by a descriptive term, at the user's option, and by the name of a specific in-network provider.
It has to accept other factors the plan uses that are relevant to the answer, and the rule's own examples include location of service, facility name and dosage.
Where a search returns several results, the tool has to let them be refined and reordered by proximity and by the estimated amount you would owe.
A paper route exists alongside it. Information must be available in plain language, without a fee, on paper at request.
On that route the plan may limit each request to no fewer than twenty providers, and it has to disclose the limit it applies. The answer has to be posted no later than two business days after the request arrives.
Another channel, such as phone or email, is permitted where the person agrees it satisfies the request and it is met at least as fast as the paper route.
Which plans this reaches, and which it does not
The applicability paragraph is short and it does real work, so it is worth reading before assuming the tool exists.
The section applies for plan years, and in the individual market for policy years. A first set of items and services was covered from a date in 2023, and all covered items and services from a date in 2024.
It does not apply to grandfathered health plans.
It also does not apply to health reimbursement arrangements or other account-based group health plans, or to short-term limited duration insurance.
That last exclusion lines up with a distinction this site already draws elsewhere: an arrangement that is not major medical coverage does not carry major medical duties.
Four written limits on what the tool proves
The rule builds in its own tolerances, and reading them keeps an estimate in proportion.
A plan does not fail the section merely because, acting in good faith and with reasonable diligence, it makes an error or omission, provided it corrects the information as soon as practicable.
It does not fail merely because its website is temporarily inaccessible, provided the information is made available as soon as practicable.
Where compliance requires information from another entity, a plan that relied in good faith on that information does not fail the section, unless it knew or should have known the information was incomplete or inaccurate.
And the notice itself says the estimate is not a guarantee of benefits.
Together those four sentences describe an instrument that is useful for planning and is not a promise about a claim.
Why the plan is allowed to tell you the rate at all
A negotiated rate used to be the kind of thing a contract could forbid a plan from repeating, and a separate statute addressed that.
It reaches a group health plan, or an issuer offering coverage in connection with one. Such a plan may not enter into an agreement with a health care provider, a network or association of providers, a third-party administrator, or another service provider offering access to a network of providers. The bar is on an agreement that would directly or indirectly restrict the plan from doing certain things.
The first is providing provider-specific cost or quality of care information or data, through a consumer engagement tool or any other means, to participants, beneficiaries and others.
The second is electronically accessing de-identified claims and encounter information for each participant, including on a per claim basis the allowed amount, provider name and clinical designation, and service codes.
The plan has to submit an annual attestation of compliance.
Two limits belong beside that. The statute preserves reasonable restrictions on public disclosure of the same information, and it says nothing in it modifies existing privacy protections.
Read the nouns in the operative sentence before stretching it. It is written about agreements for access to a network of providers, and it does not say anything here about a manufacturer or a rebate.
How to use this without overreading it
The practical value is that a request has a defined answer, so a vague reply is checkable against a list.
A request names an item and a provider. For a medication that means the drug and the pharmacy, and the rule's own search fields include a descriptive term rather than only a code.
The reply is incomplete if it gives a number without the accumulated amounts, because your position in the deductible is what makes the number mean anything.
The reply is incomplete if it says nothing about a prerequisite, where one applies.
The savings-card sentence is the one most worth reading twice, because whether third-party payments count toward the deductible changes the shape of a whole year.
None of this decides coverage. It is a quote, and the rule says in writing that a quote is not a guarantee.
Sources
- 45 CFR 147.210 — Transparency in coverage: definitionsThat the section sets out definitions for the price transparency requirements for group health plans and health insurance issuers in the individual and group markets; the definition of covered items or services as those items or services, including prescription drugs, the costs for which are payable in whole or in part under the terms of a group health plan or health insurance coverage; the definition of items or services as all encounters, procedures, medical tests, supplies, prescription drugs, durable medical equipment and fees; the definition of a billing code as the code used to identify items or services for billing, adjudicating and paying claims, with a list including the Current Procedural Terminology code, the Healthcare Common Procedure Coding System code, the Diagnosis-Related Group code and the National Drug Code; the definition of accumulated amounts as what has been incurred toward a deductible or out-of-pocket limit and, where a cumulative treatment limitation applies, the amount accrued toward that limit; the definition of cost-sharing liability as the amount a person is responsible for paying, generally including deductibles, coinsurance and copayments but not premiums or balance billing amounts; and the definition of copayment assistance as financial assistance received from a prescription drug or medical supply manufacturer toward the purchase of a covered item or service.
- 45 CFR 147.211 — Transparency in coverage: required disclosures to participants, beneficiaries, or enrolleesThe scope sentence establishing price transparency requirements for group health plans and issuers in the individual and group markets; the duty to provide the required information at the request of a participant, beneficiary or enrollee; the seven required items of cost-sharing information, accurate at the time of the request, being the estimate of cost-sharing liability reflecting any cost-sharing reductions, accumulated amounts, the in-network rate comprising the negotiated rate as a dollar amount which must be disclosed even where it is not the rate used to calculate cost-sharing liability, the out-of-network allowed amount, the contents of a bundled payment arrangement, notification where coverage is subject to a prerequisite, and a plain-language notice; the required notice contents including the balance billing statement where state law permits that practice, the statement that actual charges may differ depending on what is received at the point of care, the statement that the estimate is not a guarantee that benefits will be provided, and the statement disclosing whether the plan counts copayment assistance and other third-party payments toward the deductible and out-of-pocket maximum; the internet-based self-service tool requirement, in plain language, without subscription or other fee, giving real-time responses, searchable by a billing code or a descriptive term at the user's option, by the name of a specific in-network provider, and by other factors the plan uses such as location of service, facility name or dosage, with results refinable and reorderable by proximity and by estimated cost-sharing liability; the paper method, in plain language and without a fee, which may be limited to no fewer than twenty providers per request, with the limit disclosed and the answer mailed no later than two business days after the request is received; the allowance of another means where the individual agrees it satisfies the request and it is at least as rapid; the applicability paragraph phasing the duty in by plan year and, in the individual market, policy year, reaching all covered items and services from a date in 2024; the exclusion of grandfathered health plans, health reimbursement arrangements and other account-based group health plans, and short-term limited duration insurance; and the three tolerance paragraphs covering a good-faith error or omission corrected as soon as practicable, a temporarily inaccessible website, and good-faith reliance on information from another entity.
- 29 U.S.C. 1185m — Increasing transparency by removing gag clauses on price and quality informationThat a group health plan, or an issuer of health insurance coverage offered in connection with such a plan, may not enter into an agreement with a health care provider, network or association of providers, third-party administrator, or other service provider offering access to a network of providers that would directly or indirectly restrict the plan from providing provider-specific cost or quality of care information or data, through a consumer engagement tool or any other means, to referring providers, the plan sponsor, participants or beneficiaries, or individuals eligible to become participants or beneficiaries; from electronically accessing de-identified claims and encounter information or data for each participant or beneficiary, including on a per claim basis financial information such as the allowed amount, provider information including name and clinical designation, and service codes; and from sharing that information with a business associate; the clarification that nothing in the first clause prevents a provider, network or other service provider from placing reasonable restrictions on public disclosure of the information; the annual attestation of compliance owed to the Secretary; and the rules of construction stating that nothing in the section modifies or eliminates existing privacy protections and standards under state and federal law.
Frequently asked questions
Does this rule really cover prescription drugs?
The definition says so directly. Covered items or services means those items or services, including prescription drugs, the costs for which are payable in whole or in part under the plan or coverage. A companion definition lists prescription drugs again, and the definition of a billing code includes the National Drug Code, which is the identifier a pharmacy claim carries.
What am I entitled to see besides the price?
Six other things. Accumulated amounts toward your deductible and out-of-pocket limit. The in-network negotiated rate, which must be shown even where it is not what your share is calculated from. An out-of-network allowed amount where relevant, and a list of what is inside a bundled arrangement where one applies. Notification if the item is subject to a prerequisite, and a plain-language notice whose required contents the rule spells out.
How do I get the answer if I do not want to use a website?
The rule requires a paper route as well. Information has to be available in plain language, without a fee, on paper at request. A plan may cap each paper request at no fewer than twenty providers, must disclose the cap it uses, and must send the answer no later than two business days after receiving the request. Another channel is allowed where the person agrees it satisfies the request and it is at least as fast.
Will the tool tell me whether a manufacturer card counts toward my deductible?
That is one of the required statements in the notice. The plan must disclose whether it counts copayment assistance and other third-party payments in calculating the deductible and out-of-pocket maximum. The rule defines copayment assistance as assistance from a prescription drug or medical supply manufacturer toward a covered item or service.
Is the estimate binding on the plan?
No, and the rule says so twice over. The required notice must state that the estimate is not a guarantee that benefits will be provided, and that actual charges may differ depending on what is received at the point of care. Separate paragraphs also excuse a good-faith error corrected as soon as practicable, a temporarily inaccessible website, and good-faith reliance on information from another entity.
Does every plan have to run one?
No. The section does not apply to grandfathered health plans, to health reimbursement arrangements or other account-based group health plans, or to short-term limited duration insurance. For everyone else the duty phases in by plan year, reaching all covered items and services from a date in 2024.