Leaders Edge

Healthcare Pricing Transparency | Position Paper

SUPPORT EFFORTS TO INCREASE HEALTHCARE PRICING TRANSPARENCY & ACCESS TO MACHINE READABLE FILE DATA

BACKGROUND

Today, most Americans pay a fee for every service, drug, and test. There are no standard prices or price ranges, nor is there a clear framework that structures pricing negotiations. Prices are highest in the commercial insurance market. Employer-sponsored health plans pay on average 253% of what Medicare pays for the same service.1

To enable greater healthcare pricing transparency, since 2022, group health plan sponsors and issuers have been required to post machine readable files (MRFs) publicly that contain in-network negotiated charges for every medical service with every provider in their networks, in compliance with the Transparency in Coverage final rule. There is no standard file format or naming convention, which has created confusion among employers, and their broker and consultant partners, as to how to utilize the data effectively.

THE ISSUE

This data could help to uncover alternative ways to decrease total plan costs and improve health outcomes. The opportunity to unlock new data-driven insights hinges on the ability to navigate the MRF data as well as the ability to augment the MRFs with other datasets (i.e., claims data). There are five major gaps across the data that currently create barriers to accessibility:

  1. Multiple Unexplained Rates: One of the most common issues found in the data is the presence of more rates than can be explained by the data.
  2. Missing Facility-Based Inpatient Codes: Some payers have omitted inpatient codes from their network files.
  3. Variability & Missing Facility-Based Outpatient Codes: How different facilities are reimbursed can vary by facility and/or by insurance carrier (Fee-for-service, case rates, Ambulatory Payment Classifications (APCs), total dollar amount of charges).
  4. Missing Providers: Some payers do not include rates for all contracted providers in their networks.
  5. Alignment of Services to Specialties: It is common to see provider specialties list rates for services that they would never provide. For example, dermatologists have prices for hip replacements and eye practice groups have rates for orthopedic procedures.

OUR POSITION

There are several ways to enhance access to machine readable file data and create meaningful transparency among healthcare industry stakeholders. The Council urges Congress to:

  • Codify the Transparency in Coverage rules.
  • Pass legislation that requires group health plans to prepare a summary of all rate and payment information, including new statistical information about formulas, pricing methodologies and other data used to calculate the certain payment rates, as well as the name and description of the type of plan and network of participating providers.
  • Expand plan fiduciaries’ authority to access and audit claims and encounter data to inform decisions about their service providers.
1. Prices Paid to Hospitals by Private Health Plans: Findings from Round 5 of an Employer-Led Transparency Initiative (RAND Corporation)

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ABOUT US

The Council of Insurance Agents & Brokers is the premier association for the top regional, national and international commercial insurance and employee benefits brokerage firms worldwide. Council members are market leaders who annually place 90 percent of U.S. commercial property/casualty premiums, and 70 percent of all employee benefits business in the U.S.

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