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AHLA's Speaking of Health Law
Putting Price Transparency into Perspective
Jackie Selby, Partner, Epstein Becker & Green PC, Maria Nikol, CEO, Revelar Analytics LLC, and Karen Mandelbaum, Senior Counsel, Epstein Becker & Green PC, discuss current trends and developments related to price transparency. They cover why price transparency is important; provide an overview of the hospital transparency rule and the transparency in coverage rule for health plans; and detail how the rules are impacting providers, payers, and consumers. Jackie, Maria, and Karen wrote an article about this topic for Health Law Connections magazine. From AHLA’s Regulation, Accreditation, and Payment Practice Group.
Watch this episode: https://www.youtube.com/watch?v=5cbxUKpklYQ
Read the article: https://www.americanhealthlaw.org/content-library/connections-magazine/article/f2560233-685a-4065-a989-d286ae43b2e6/Putting-Price-Transparency-into-Perspective
Learn more about AHLA’s Regulation, Accreditation, and Payment Practice Group: https://www.americanhealthlaw.org/practice-groups/practice-groups/regulation-accreditation-and-payment
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Hello, everyone. My
SPEAKER_03:name is Jackie Selby. I am here with Maria, Nicole, and Karen Mandelbaum, and we are going to Do this podcast based on price transparency rules. We recently published an article in Health Law Connections magazine entitled Putting Price Transparency into Perspective. It covers both the hospital transparency rule and the transparency and coverage rule for health plans. And by way of background, I'll introduce myself and then I'll pass it over to Maria. I'm a partner at Epstein Becker and Green for almost 20 years in the healthcare practice. Prior to that, I was in-house with different large health plans and I work mostly with providers, but also health plans. I do work on the provider contracts with plans, drafting and negotiation, as well as dispute resolution. And I do a lot of value-based payment. work. So Maria, I'll turn it over to you now.
SPEAKER_01:great thank you so much jackie and i'm so excited to be here today my name is marianna cole and i'm the ceo of revelar analytics i've spent the last 15 plus years in the healthcare and operations and strategy role mostly working on partnering at various levels to affect change in business strategy working with large health plans as well as providers and delving deeper and deeper into the technology space expertise in regulatory and compliance issues, accountable care organization development and operations, as well as physician engagement. And I've spent the last little while working on informatics analysis and the interpretation of large data sets, which brought me over to Revelar Analytics and helping to decipher these extraordinarily large data sets. And I'll pass it over to Karen.
SPEAKER_02:Thanks, Maria. My name is Karen Mandelbaum and I'm a senior counsel at Epstein Becker and Green. I've been here for about six years and I work in the privacy, cybersecurity and data asset management group within the firm. I joined Epstein Becker from, I came from CMS, from the Centers for Medicare and Medicaid Services, where I was the director of security and privacy policy and an assistant to the chief information officer. Got a pretty close-up view of the development of the health insurance marketplaces and also worked across the agency with the different parts of CMS to deliver their data assets and to manage their data. And so had a unique opportunity to learn about the transparency and coverage rules even before they were being written about in regulations and being put out in rules. So with that background, I'd like to sort of dive right in to why the transparency and coverage rules are so important. We all know that everyone at some point in their lives need doctors, nurses, hospitals. And even when you have good insurance coverage, it can cost a lot of money to get the care that a person needs when an illness strikes. And too often, Too often we hear of stories where people actually end up going bankrupt because their healthcare costs so much. And so really the only way to get our arms around this problem is to know how much the care that people need or that individuals need is gonna cost them before they actually go to the doctor or are admitted to a hospital. And for a very long time, that information wasn't available to ordinary consumers before they needed the care that they had to get. And they would find out after they were discharged from a hospital or a few weeks after they saw their doctor how much the bill actually was going to cost them out of pocket. Furthermore, for years, healthcare economists talked and advocated about price transparency. For as long as I can remember, they would say things like that the rate of increases in the cost of healthcare were rising in an unsustainable way. Or they would say things like the Medicare trust fund will run out by a certain point in time. And all the while, prices in healthcare were continuing to rise. And they also became more complicated and more opaque. And it was becoming harder and harder to figure out what the cost of care actually was. And so, you know, Now we have these price transparency rules, but there's quite a long history of regulation in this space. And I think that if we have to put a stake in the ground as to when Congress actually started to think about consumers in healthcare and consumers having an interest or needing to have an interest in the cost and the price of healthcare, it was in 2003 when when the Medicare Prescription Drug Improvement and Modernization Act was passed, that modified the IRS code to pair a high deductible health plan with a health savings account, which gave consumers the ability to save towards their healthcare costs. They could sort of figure out where they were in their out of pocket expenses and understand when the, insurance product that they had purchased would kick in. But up until that time, it got people really thinking about sort of like how much they were spending on health care. And then it gave them the opportunity to save. And it was their account. A health savings account was not an account that was an employer's account that just the employer contributed money to, but it was a savings account that the that the consumer or that the employee or that the patient had for themselves that they could keep year over year and was theirs to sort of have. The Affordable Care Act introduced the idea of transparency, both for hospitals and for health plans. And so the first set of rules that was promulgated by CMS were the hospital transparency rules. Maria, you wanna talk a little bit about the format of those hospital transparency rules and tell us a little bit about what your experience with those files are?
SPEAKER_01:Yeah, absolutely. So there's actually two rules, as Karen just alluded to. One was for hospitals, and that came out around 21. And basically, hospitals are supposed to publish their pricing information for consumers to be able to see for their top shoppable services. That rule came out and then subsequently another rule came out similarly for health plans to be able to publish those same files in a machine readable format and that came out about a year later in 2022 and so There's various requirements, both on the hospital side, as well as on the health plan side, in terms of how that information is supposed to be available, supposedly for consumers, but on the health plan side, it's definitely much more intricate than that. And we'll dive into that in just a little bit. I wanted to pass it over to Jackie, actually, to get us into some of the background as well. Jackie, what's been your kind of experience and take on that?
SPEAKER_03:I think both rules, the hospital rule and the plan rule, do have information for both consumers and vendors and providers and such. And although there's been no real enforcement on the health plan side, there have been no audits, there can be penalties that could be enforced up to$100 a day, actually, per individual and per violation. So there could be significant penalties on the plan side. But on the hospital side, there have actually been a number of audits, maybe over 1,000. And the hospital, there have been about 14 hospitals, I believe, that have been penalized under civil monetary penalties up to, I think it was about$4 million total. So there has been some teeth. But there's also been a recent executive order. In February, the Trump administration issued an executive order that requires HHS to come up with additional rules regarding price transparency that would increase the enforcement of both rules. The order mentioned that hospitals and plans really haven't been held to account. The order also requires HHS, I think by May 25th, about 90 days after The order to require disclosures of actual prices, and we'll get into what that means, but not estimates. Currently, at least the plan rule only requires estimated pricing information. It would also require HHS to require the information be standardized, the pricing information be standardized. And lastly, there was a hint of potentially expansion of the rules to include new requirements. So stay tuned. I'm sure we'll see more coming out of this administration on these rules. So I think we are going to also maybe talk about the impact or the usefulness of the data to providers. Maria, do you want to?
SPEAKER_01:Yeah, absolutely. Yeah. So kind of going back to these two rules, there's again, the hospital rule that first came out. And as Jackie just said, there's been very sparse enforcement on that. It's been really difficult to enforce these rules. And on the hospital side, it's just the top shoppable services. So if anybody has any interest in it, I encourage you to do so, is go to a hospital website in your area or your neighborhood and see what that looks like. And basically, right now, what you'll find is that each hospital publishes these rules in a variety of different formats. Some of them are searchable tools. Others are Excel sheets. Yet others are in machine-readable formats. And so I encourage everybody to try it I certainly did in the very beginning just to see what the formats look like. And again, it's the wild, wild west of that. And of course, each shoppable service is just the top one. So it's up to them to pick which ones they're going to disclose and how they're going to disclose it. And there's definitely not a single unified schema for that. So on the other side, on the health plan side, these files are literally... extraordinarily large and we'll get into some of the difficulties around that but it does provide every single service um that is negotiated with a potential provider and so that's you know kind of of interest there um it's hundreds of files super large uh they are machine readable and thus not human readable um and you know with that being said that information um can be really useful for provider organizations as they're looking to negotiate these payer contracts, for example. And that's just one use case of these machine-readable files. It's really to understand what the fair market value looks like. However, there's definitely a lot of challenges when you're looking at literally machine-readable files. So what are they? MRFs are extraordinarily large. And so if a consumer, if you pretend that you're a consumer, because I'm sure all of you are consumers of healthcare, what you'll do is you'll actually go into a health plan. You get really excited because there's a table of contents that's there and you click that download button. But when you look at it, it makes zero sense to the human eye. And what you really need is a technical person and a process to be able to work with these files. Now, Once you've parsed them, and maybe you can open up a single file, what you'll find is that these files are extraordinarily large. So a typical computer might not even be able to open them. So if you have a smaller capacity computer, you can't open them. For some of the smaller ones, you certainly will be able to. But those rates are just single varied rates and they're usually done by employer groups. So the table of contents only lists each information by an employer group. And so you don't have a comprehensive view of what. these files actually mean it's like finding a needle in a haystack and you're like okay i see some really really interesting information here and maybe i could start to make out what my competitor across the street might be reimbursed um for these services but you don't see the entire scope in the entire picture and you might not even find uh your competitor in each one of these files which is you know very fascinating um but when taken as a whole What you will be able to do is make sense of it. So one of the other challenges that I wanted to point out is that in these machine-readable files, there's a CMS-approved schema, which, again, is publicly available. You can see what the schema is. And each health plan is expected to comply with that rule. Now, again, enforcement has been very sparse up until this point. So what you actually see is that it's not provided in a single unified format. So Oftentimes, what you'll end up seeing is these large, large data sets, not in a single unified schema. And what really is important is to have a technology platform that's able to decipher it and spit out a usable format for those of you that are able to work with that data to then go through and say, okay, I can now go through and use this for contract negotiations. So To that end, on the fee-for-service world, once you're able to decipher and overcome some of these challenges, and again, a data vendor and partner can certainly help you with that, what you'll end up having is a really nice, easily laid out format that lays out competitor X, Y, and Z, and their ranges of what they get for each of their billing codes. So, you know, for example, an office visit, you'll see that the range, you know, is between$50 and$150. And now you know where your client falls into that range. You can even pull that data out of these machine readable files. And so let's say that your client is getting$100. So they're not at the very bottom, they're not at the very top, but you know, there's another$50 that might be able to be had in that negotiation, you then can come up with what fair market value looks like, what's the average, and potentially use this data for your contract negotiation purposes to say, you know what, I'm really not getting what others are getting in my area. And so what we see is typically about a 3x variation. in rates across any specific geographic area. Literally, somebody across the street might be getting significantly more than you for every single procedure and every single billing code within, I'm going to say, the same taxonomy. So cardiologist compared to a cardiologist, a nephrologist compared to a nephrologist, etc., etc. Interestingly, some of the work that we've done Especially for large hospital systems, for example, there's definitely not uniformity to that. So even, I mean, size does matter in this instance. And so larger systems typically have higher reimbursement values, which probably isn't a surprise to anybody. However, within that, there's definitely still variation and significant variation, which amounts to millions of dollars a year in potential revenue in terms of negotiations. And as health plans are looking to negotiate that, both on the health plan side and the provider side, it's really important to understand what that landscape looks like and what those in your area are being reimbursed. And so fee for service really makes sense as you start to delve into value-based care agreements. That information is really helpful as well. Because bundled payments are in there, capitated rates are in there as well, so you can start to make out what that looks like. And additionally, you could start to figure out your own... ideas around which bundle you might want to create and where your reimbursement patterns look like. That's some of the much more novel approaches on price transparency that we've been working on, actually. Super cutting edge stuff. And then in the development of preferred provider networks. So, you know, do you want to send your patients to the highest value provider? So not necessarily somebody that's charging less or somebody that's charging more, but really looking at cost and quality information as you can start to to add in quality metrics in addition to cost to some of this data, which is really, really interesting. And then on the provider dispute side and the payer dispute side, and especially for out-of-network contracts, this data is super interesting. So the out-of-network files are also available. So there's three types of files, the in-network and the out-of-network files that are within these data sets. And so you can start to delve into out-of-network providers and what are those payments looking like. And then, so that's really on the provider side in terms of contract negotiations. But again, it's really important to be able to get your hands on the data, make sense of the data before you embark on the journey of engaging in a contract negotiation. What I think a big challenge is, and again, because this data is so large, so complex, there's thousands of files that are then updated as frequently as monthly. What you don't want to be doing is kind of running that hamster wheel of to be able to look at this data. Once you get those actionable insights, then you can actually take that for a contract negotiation, a payer dispute, et cetera. So Jackie, can you tell us a little bit more about the usefulness of this data on the consumer side?
SPEAKER_03:Absolutely. But I do have one question, if you don't mind. I'm curious, in these negotiations, since providers can see their competitors' rates, plans also see their competitors' rates. So in your experience, maybe it's too early, do we have a sense of whether prices might actually be going down since plans see the discounts that provider gives to their competitor? They're looking for lower rates and the provider, of course, is comparing themselves to their competitors and looking for higher rates. So net net, do we have a sense of the impact?
SPEAKER_01:Yeah. I would say it's too early to tell. Yes, I think ultimately, if I had a crystal ball, we're going to see some sort of culmination towards center in the middle ground. Because again, what we're seeing right now is about a 3x variation, which is huge, obviously resulting in significant revenue on both sides of the aisle, obviously. And so, yeah, as you start to have payers pulling this information, providers pulling this information, everybody has kind of a level playing field, if you will. So crystal ball, yeah, we'll see a culmination towards center, perhaps. Again, we haven't seen that play out yet. In fact, I would say both sides are still surprised of how did you get that information? I didn't know that that's publicly available. How are you not violating these antitrust laws? Well, it's public. It's on your website. You know, so it's definitely interesting. You know, and start to have a culmination towards center perhaps and that's where we are going to hopefully see um again the the evolution of value-based care um and using additional quality metrics um novel payment arrangements um that hopefully will end up bringing costs down and increase quality of care for patients really that's that's what my hope is um not that we're in this fee-for-service and, hey, I need a dollar more for each service. But really, hopefully, this will ultimately benefit the consumer in that we all end up with higher quality care and hopefully providers are reimbursed a fair market value for their services and they're able to keep their doors open and they feel safe. because I know that that's also this metric that's been going down as well as that provider satisfaction in their day-to-day work as they're encouraged to do more and more in the fee-for-service world. So
SPEAKER_02:just to jump in here for a second to answer your question, Maria, about the consumer side, we're talking a lot about the providers and the payers. But one of the nuances in the transparency and coverage rules was that employers as the sponsors of group health plans were also considered and discussed by the three agencies that put these rules out, the IRS, the Department of Labor, and CMS, that group health plans also play a very big role in designing their their plans for their employees and employees are, and then again, there is the consumer, there is the patient. And so both the transparency and coverage rules and the hospital transparency rules have a requirement that some sort of tool be developed that take these very undigestible tools files that are machine readable and turn it into real information for patients and for the individual. And so, like you said earlier, like, you know, we do encourage people to use those tools that are on hospital websites. And then you can do it in your own, with your own insurance product. You should have, there should be a tool that you can enter your name and your group number and your insurance information into that will, and then you can request like, you know, a CPT code and that information that that information from the machine readable file will be synthesized it'll be personalized too and it'll let you know what you as a consumer, what your out-of-pocket costs are. So as useful and as helpful as this information can be in negotiations, in fair market valuations, in acquisitions of providers and of provider groups and organizations, as important as it is for those purposes and as useful as it is, also really super important for employers to understand and to be used by employees as well. We're seeing that with employers, they don't really understand it. We work with group health plans and with employers that sponsor group health plans, and they're not sure what the data is, what value the data has. oftentimes they're reticent to engage with it. That's the information that can really help them decide on how to design their health plan, what's happening with their benefit structure. A lot of times, TPAs and PBMs don't give group health plans access to the claims data that comes through on a real time sort of basis, it's difficult sometimes for those group health plans to really understand what the cost of care is. And if they use their own machine readable files, they would find that they have a lot more information at their fingertips and they could help themselves lower the lower their costs. They could make choices like, for instance, to try to get into the direct provider contracting sort of mode if certain services are costing more than they anticipate or more than they want. There are those types of strategic ways that employers can also, as consumers of healthcare, use those files to their best advantage. And I'll just add one last thing. One of the reasons that the group health plans didn't really sort of have the opportunity to cut their teeth and to learn about those machine readable files is because they don't have access to their claims data. Because the TPAs and the insurance companies that either, if either they're self-insured, they'll use a TPA, whether fully insured, they'll have an insurance plan. What the insurance companies did to sort of ensure that they had a little more control over these files was they took the initiative to sort of step in. And they said, don't worry about, you know, to their group health plan customers, they said, don't worry about publishing those files. We'll do it for you. And we'll post it, and we all have a link, and it's on their site. Now, the group health plans still need to have it on their site that's publicly available, which is sometimes a challenge to figure out. But as a general rule, the posting is right on the insurance company or the TPA's website, and that's provided to the to the group health plan to be able to publish. So it was kind of like the insurance companies have all that data. So they've done this the way they sort of want it. It's in the format that they want. I know, and Maria, you could talk a little bit more about this also. We've mentioned the complexity. I think that in the rules, the formats, that schema that you were describing, there were, I think, six different machine-readable languages that CMS and DOL and the Treasury said that could be used. I think that what we're seeing is that the most complicated one, JSON, was the one that most of the insurance companies actually chose. So it actually does require somebody that really has experience with that kind of computer language and really strong skills in programming. So it's really a tough language to deal with.
SPEAKER_01:Yeah, these are definitely JSON files from our experience, especially for, you know, the really large payers. The smaller ones we've seen significantly less compliance with in posting anything at all or, you know, you'll go to the website and it just totally crashes. Not your computer crashing, but literally it's like unavailable. We'll get back to you in six months. So but yeah, these files are great. really listed by the employer, back to what Karen was just saying, and by employer group. And that's what results in literally thousands of files that then need to be, again, if you don't have a machine to open it and somebody to search exactly what file you're looking for, you would literally have to open thousands of files on a monthly basis to try to find the one that you're looking for maybe. And maybe you're looking for 10 of them out of thousands, so there's no way to actually find it. Now, one of the other data complexities is the way that things are billed and understanding what NPI intend to utilize to be able to then pull that file. Anyway, everybody's familiar with hospital systems. Let's take a hospital system as the example. they're going to use multiple TINs and NPIs to be able to bill under that. And so those rates, you don't know which one of the hundreds, literally, that they have that their rates are under. So you need to be able to understand that part of the equation before you even start to do the data pull. and you think you have their TIN and you think you might have their NPI, and then you go search that file and what you come up with is nothing. And so it's really important to be able to holistically look at all of the rates under all of the TINs and NPIs for a specific system to be able to pull under that, especially with mergers, acquisitions going on. You can't just pull on a name. You have to be able to identify the specific TIN and NPI by which you then do the pull Which presents another data complexity and challenge that we kind of haven't covered. Again, across multiple, literally thousands of files. So now you're searching for hundreds of NPIs across thousands of files, which again, not very human friendly. Yeah. And to that effect, that's not just for hospital systems. That's also for larger practices, MSOs, IPAs. You need to be able to holistically pull their information. The hospital system was just a small example of that.
SPEAKER_03:So I would like to just circle back for a minute on the fact that the patient that is looking, shopping for healthcare services and looking at this data on the website, say of their plan, there's no app, by the way, that was deemed to be too burdensome at this time. So they go to, an individual goes to the plan website and what they're going to get, a couple limitations on that data, they're going to get an estimate. And again, the exact executive order is looking to change that and possibly include actual pricing information, not estimates, but it'll be very interesting because the plans don't likely have enough information to commit to what the price is in advance. They'll get the code. You have to put in the CPT code. You have to get that from your provider and put that in the insurance plan's website. But coverage is a very complicated concept. And so whether they would commit that they would pay that price depends in part on whether they view it as a covered service or not. And that might include, for example, a medical necessity review of whether the service is required. So I'm not exactly sure what the actual prices mentioned in the executive order will look like, but it'll be interesting to follow. And then one last point on the patient data. Remember, there's no quality data. This is all cost information. And so you're going to have to go to other places for that quality data. Perhaps CMS website has some information on quality for hospitals, at least. And so that's a piece of the the shopping experience, right? Is you wanna pick a quality provider. So this is all about cost. So we really are at the beginning stages, but in the shopping experience, just understand. And the last thing, actually, one other thing I thought of was, if you're interested in going out of network, the data is limited in that sense. You'll get the allowed amount that the plan is willing to pay, which is not what you will be billed by the provider. So if you're going out in network, there's a high chance that that allowed amount won't cover the provider's full billed amount. And so that difference would be balanced billed to you. So you would have to go back to the provider and get that data from that provider. So you as the patient have to do a lot of work pulling together the provider and the plan, the providers and the plans don't have to work together to get you this data. So it's, it's, It's complicated. I'll end on that note. Do you guys have any other specific uses or limitations of the data that you wanted to address that we didn't hit on? No, I
SPEAKER_02:think that what your observation, your observations, Jackie, are very on point, you know, and really, you know, rather than view it as sort of a this is just gonna be more confusing or create more confusion. I think looking at this as the first step and it's a small step in the right direction that will eventually work together with the other forces. So a lot of times we have a tendency to focus on one area, The Affordable Care Act was a massive law and it has lots of moving pieces. There have been other components and other laws that have passed things like MACRA with the Quality Payments Program, the 21st Century Cures Act, and those types of laws that have brought more clarity to where the transparency and coverage rules need to go and the hospital transparency rules need to go. And so just keeping in mind that it took us probably half a century to get to the point where we said, oh boy, We need this clarified, and it's not going to get unwound with one set of rules. And again, transparency also means something a little bit different to each of the stakeholders in this whole paradigm. what transparency means to an individual patient is something very different than what transparency means to a health plan, to an insurer, to a provider, and within the provider organizations, there's a lot of variation between medical practice groups and hospital groups and health centers and all those types of things. So just keeping in mind that this is the first step, giving... We should give it a chance. We shouldn't get too frustrated by it. And enforcement isn't necessarily a bad thing, but we have to remember that it costs a lot to enforce. And so it's really looking at the ways that everyone can benefit from the right path forward here. Well said.
SPEAKER_01:Yeah, absolutely. Just to add a little bit more to that, I think you're right. This is just the first of hopefully many steps towards increasing price transparency. And again, the large payers by and far are fairly compliant, at least posting some really critical pricing information. And again, our clients have used this information for contract negotiations extraordinarily successfully. And while there's so much complexity to it, it's really good. But then there's other... non-compliance issues as you delve deeper and deeper into it. And, you know, some rates are not published, some procedures are not published. So, you know, if you're looking for a very specific thing, it might not be in there, or a specific group might not be in there. So like an omission of a large hospital system that you know exists. And, you know, if you compare, interestingly, the hospital file and the health plan file, what do you come up with there? Sometimes some pricing variation. Sometimes you see that the hospital posted that information while the health plan didn't. So that's of interest. But again, as we go further and further, hopefully there's more compliance, more enforcement. But by and large, this information is extremely helpful and it's a great first step, as Karen said. So I absolutely echo and agree with that.
SPEAKER_03:Lots
SPEAKER_01:to come.
SPEAKER_02:Yeah. Well, it was great talking to both of you today about this.
SPEAKER_01:Same. Yeah, this
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