CALLING ALL REFORMERS: Your Comments Needed to End Secret Health Care Prices

[Comment period closes just before midnight Jan 29th. Go straight here to submit comments. Or read below to learn more. Share far and wide. Numbers do matter in the regulatory process.]

In November, the Trump Administration published a proposed “Transparency in Coverage” regulation that would require price transparency of insurance companies and group health plans. The proposal would require that:

1. Each insurer or group health plan have an online interactive tool that allows enrollees to obtain personalized out-of-pocket cost information for all covered items and services (and paper form upon request) in the form of an “advance EOB” reflecting patient-specific cost-sharing (such as deductible spend, etc), whereby negotiated rates as well as patient share of those rates, are disclosed.
2. Each insurer or group health plan must make available two machine-readable files on a public web site, updated monthly, showing: 

• In-network rates: all negotiated rates for all contracted items and services for all providers; 
• Out-of-network rates: historical allowed amounts for out-of-network items and services for all providers, for items or services that have been provided by that provider more than 10 times in the reporting period (to avoid outlier bias and potential re-identification).

*The proposal also requests comment on whether this information ought to be made available through standard, open APIs rather than machine-readable files on a web site.

As you might imagine, hospitals and insurers are preparing for war. The four major hospital associations have already filed a lawsuit to stop the companion regulation imposing transparency requirements on hospitals. Insurers will likely do the same as soon as the Transparency in Coverage rule is finalized.

When the regulators finalize a rule, the law requires them to either accommodate concerns raised by commenters on the proposed version, or explain why they didn’t. You can be sure that the opponents of transparency – the BUCAs, providers, and all others who benefit from the broken status quo – will be lawyering up and filing extensive comments, such as:

• All this transparency is far too burdensome, difficult and will crash their web sites when posted.
• When insurers can see their competitor prices, they will defy the laws of economics and actually raise their prices higher.
• Self-insured group health plans who use TPAs aren’t capable of complying with these transparency requirements.
• Patients only want to know their own out-of-pocket costs – all other transparency, such as negotiated rates, or public posting of all plan’s rates, is unnecessary.
• Health care is special and different from every other industry - people don’t use price information when it’s given to them.

The Administration will be pressured to accommodate the complaints of insurance companies and hospitals, if they don’t hear from those who SUPPORT the proposal to end secret prices. The most effective comments are in your own words (rather than a form letter), include examples or experiences, and refute the arguments likely to be raised by the other side. Below are some key points you might consider in your comment: 

“It’s hard.” Complexity is no excuse to hide prices from purchasers of care.

• Insurers have weaponized their pricing complexity against patients and employers for too long.
• The fact that pricing schemes are too complex for normal people to understand only serves the sellers of care and not the buyers.
• Nobody is holding a gun to the head of insurers and forcing them to create an irrational and indecipherable pricing scheme.
• The proposed transparency requirements will reward market actors who simplify and rationalize their pricing structures, and will disadvantage those whose pricing structures serve to keep purchasers of care in the dark.
• The proposed transparency requirements will finally equalize the power of the purchasers of care, who for too long, have been victims of the asymmetric, secrecy-enabled market power of the sellers of care, that is, insurers and providers.

Self-insured group health plans are capable of complying with the proposed regulation, and have long cried out for a fairer and more competitive health care market.

• They can enter into agreements with their third party administrators or other expert vendors to comply with the requirements in the proposed regulation.
• The costs or burdens of compliance by self-insured employers are far less onerous than the grave costs and consequences of the broken status quo.
• The proposed rule includes a request for comment on whether the transparent price information should be made available by standard, open APIs rather than the monthly file-posting. APIs would make compliance easier, because third party innovators would be more easily able to scrape up the pricing information, aggregate it and present it to employers, patients and regulators with less effort and time.

Patients do use price information, including negotiated rates, cash prices, or out-of-network charge information, particularly when they are given financial incentives to do so.

• A number of self-insured employers are starting to design their benefits in such a way that make high-value health care choices free or low-cost, and lower-value choices more expensive.
• Their experiences demonstrate that these benefit designs can significantly lower costs for the employer and for patients – precisely because patients DO respond to incentives to shop for high-value care.
• When patients have deductibles, their out-of-pocket cost is derived from the negotiated rate.
• Newer models of re-pricing, such as reference-based pricing, eliminate networks and negotiate with providers using their cash prices or a provider’s historical commercial rates.

Patients are not the only consumers of full price information. Plan sponsors have an ERISA fiduciary obligation to know and use price information, in order to manage plan assets solely in the interests of plan beneficiaries, including paying “reasonable fees” to “service providers.”

• It’s not good enough for plan sponsors to only see out-of-pocket costs, estimates or averages, or merely the price information from their current plans.
• Plan sponsors must be able to compare the deal they’re getting now with the deal they could be getting from other plans.
• Real price information will help plan fiduciaries evaluate the performance and cost-effectiveness of their broker, their TPA, their PBM and other vendors, as well as the provider network provided by their ASO or TPA.
• It’s essential for plan sponsors, brokers, or other vendors serving self-insured employers to see prices paid by all payers to all providers if they are to effectively negotiate direct contracts, reference-based prices, reductions in balance bills, and other essential tasks required to help serve plan beneficiaries get high quality and lower cost care.

Tell your own story HERE or put some of the above points that matter the most to you in your own words and submit your comment automatically. (You can also file your comments directly on the government site here.) And please feel free to send your clients’ employees, your friends, neighbors and family members to this (jargon-free) site collecting comments from those who don’t work in the industry. COMMENT PERIOD CLOSES END OF DAY, 11:59PM, JANUARY 29TH.