Friday, July 1, 2022 (Caesars News) — Consumers, employers and virtually everyone interested in healthcare prices will soon gain unprecedented insight into what insurance companies pay for healthcare, which may help Answers that have long plagued those buying insurance: Are we getting the best deal?
As of July 1, health insurers and self-insured employers must itemize on their websites every price they negotiate with healthcare providers.The only thing not included is the price paid prescriptionunless administered in a hospital or doctor’s office.
Federally-requested data releases could affect future prices and even the way employers sign health care contracts. Many will see for the first time how their insurance company is performing compared to other insurance companies.
The new rules are much broader than those that took effect last year that require hospitals to publish their negotiated rates for public viewing. Jeffrey Leibach, a partner at the consultancy Guidehouse, said insurers now have to disclose how much they pay for “every doctor, every hospital, every surgery center, every care facility in the network.”
“When you start doing math, you’re talking about trillions of records,” he said. The federal government can also impose heavier fines for violations than the penalties faced by hospitals.
Federal officials have learned from the hospital’s experience and are giving insurance companies more direction to anticipate, Lebach said. If an insurance company or self-insured employer fails to provide data, each affected enrollee may be fined up to $100 per day per violation.
“Get your calculator out: all of a sudden, you’re in the millions very quickly,” Leibach said.
determined consumers, especially those with highdeductible Health plans, might try to mine and use data right away to try and compare what they pay for a particular service at different hospitals, clinics, or doctors’ offices.
But the sheer size of each database likely means most people “will find it difficult to use the data in nuanced ways,” said Kathryn Baker, dean of the Harris School of Public Policy at the University of Chicago.
At least at first.
Entrepreneurs are expected to quickly convert the information into a more user-friendly format so that it can be incorporated into new or existing services that estimate costs for patients. Starting Jan. 1, the rules require insurers to provide online tools to help people get up-front cost estimates for about 500 so-called “purchasable” services, meaning they can schedule care ahead of time.
Once those things happen, “you at least have options,” said Chris Severn, chief executive of Turquoise Health, an online company that publishes pricing information under hospital rules, although many haven’t yet complied.
By adding data from insurers, sites like his will be able to gain further insight into how costs change from one place to another or between insurers.
“If you’re going to take an X-ray, you can see that it’s $250 at this hospital, $75 at an imaging center by the road, or your specialist can spend $25 in the office,” he said.
Everyone knows everyone else’s business: how much do insurance companies Aetna and Humana pay for the same surgery center, for example? knee replacement.
The requirements stem from the Affordable Care Act and then-President Donald Trump’s 2019 executive order.
“These programs are supposed to negotiate favorable rates on behalf of employers, and little we know about that suggests it’s not happening,” said Elizabeth Mitchell, president and CEO of Buyer’s Health business group, which is part of Pay to Workers Employers that offer work-based health benefits. “I do believe the dynamics will change.”
Other observers are more cautious.
“Maybe at best this will reduce the huge disparity in prices,” said Zach Cooper, director of health policy at the Yale Institute for Social and Policy Research. “But it won’t spark a consumer revolution.”
Still, the biggest value of the July data release may be in revealing how successful insurers are at negotiating prices. Studies that followed have shown huge disparities in health care costs. For example, a recent RAND Corporation study showed that employers who offer work-based insurance plans pay, on average, 224 percent more than Medicare for the same services.
The tens of thousands of employers who buy insurance for their workers will get this more complete picture of pricing — and may not like what they see.
“What we know from hospital data is that insurers are really not good at negotiating,” said Gerald Anderson, a professor of health policy at the Johns Hopkins Bloomberg School of Public Health. Hospital care may be higher than facilities never used Expenses accepted by patients who are insured and paid in cash.
That could exacerbate what Mitchell and others say are employers’ frustration with the current health insurance system. More may try to contract directly with suppliers and only use insurance companies for claims processing.
Other employers may bring their insurers back to the negotiating table.
“For the first time, an employer can go to an insurance company and say, ‘You haven’t negotiated a good enough deal, we know because we can see the same supplier negotiating a better deal with another company,'” ERISA Industry Council chair James Gelfand said the council was a trade body of self-insured employers.
If that happens, he added, “patients will be able to save money.”
However, this is not necessarily a given.
How this will affect future spending remains uncertain, as this method of publicly releasing pricing data has not been widely tried in healthcare before. Prices could fall if insurers are pushed back to the negotiating table or suppliers see their standing relative to their peers. However, if some suppliers find they are charging less than their peers, they may increase their prices.
“Downward pressure may not be a given,” said Kelley Schultz, vice president of business policy for the industry trade lobby group AHIP.
Even after the data is released, rates will continue to be heavily influenced by local conditions, such as the size of the insurer or employer — for example, insurers often give larger discounts or self-insured employers, said the University of Chicago’s Baicker. The most patients that can be sent to them. The number of hospitals in an area also matters—for example, if an area has only one, that usually means the facility can demand higher rates.
Another unknown: Will insurers make available data by the deadline?
AHIP’s Schultz said the industry is going well, in part because the original deadline was extended by six months. She expects insurance companies to do better than the hospital industry. “We’re seeing a lot of hospitals just decide not to release documents or make them hard to find,” she said.
To date, more than 300 non-compliant hospitals have received warning letters from the government. But they could face fines of $300 a day for failing to comply, less than what insurance companies could face, even though the federal government recently raised the stakes to $5,500 a day for the largest facilities.
Even after the pricing data became public, “I don’t think things will change overnight,” Leibach said. “Patients still make care decisions based on their doctors and referrals, for many reasons other than price.”