Legislation establishing a consumer-driven program that provides patients with more transparency regarding the costs of health care services in their network will take effect on January 1 in Tennessee.
The new law, sponsored by State Sen. Kerry Roberts, R-Springfield, requires that health insurance providers implement a shopping and decision support program that discloses the costs of non-emergency outpatient services or procedures to enrollees in their plan.
“This new law creates a database which discloses the cost for certain procedures so the patient can make an informed choice that fits within their budget or deductible,” Roberts said in a press release.
“Approximately 40 to 50 percent of all healthcare services are shoppable, including physical and occupational therapy services, radiology and imaging services, laboratory services, and infusion therapy. Having the opportunity to compare prices empowers patients to make the best choices for their needs. It also puts pressure on health care service suppliers that they have to compete, which drives down costs.”
Roberts said consumer choice of lower-cost options could also benefit insurance companies. Under the new law, health insurers are allowed to offer incentives to enrollees for choosing the lower-cost option, such as providing consumers up to 50 percent of the difference for going to a less expensive provider. The incentives may be provided as a cash payment to the enrollee, a credit toward their in-network deductible and out-of-pocket limits, or a credit or reduction of a premium, copayment, cost sharing, or deductible, according to the press release.
“Insurance companies would not be allowed to require or steer a patient to use a lower cost provider. It is strictly voluntary on the part of the patient,” the press release quoted Roberts as saying.
“This new law will benefit everyone and will hopefully address the rising costs of healthcare services. It will greatly impact the way Tennesseans shop for services and help consumers manage healthcare costs.”
The new law applies to all health plans entered into or renewed in Tennessee on or after January 1, 2020, with the consumer incentives becoming effective January 1, 2021.
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