Payer Machine-Readable Files: The Good, the Bad, and the Ugly

Did you know the average total cost of a knee replacement surgery in the U.S. can range from $14,188 to $49,016? That’s almost a $35,000 difference.??

Commercial healthcare services typically don’t have set prices. Because of this, and due to the relative negotiating strength of different payers and providers across healthcare markets, payers (and consumers!) may end up spending wildly different amounts for similar services. But we already knew this.???

What’s different now, as a result of the Transparency in Coverage Rule (TiC), is that for the first time ever the public is able to see how contracted rates vary across payers, geographies, and CPT codes and services. Meaning: there is now a huge amount of data that were never before available. And this new information doesn’t just help the consumer. It helps the payer, too.???

Unfortunately, with unchartered waters, there often comes problems. And big ones at that.??????

With the TiC, over a billion new rates-based data sets are now publicly available via machine-readable files (MRFs), giving payers the opportunity to make strategic decisions based on market contract pricing data.???????

But the data as-is are messy, incomplete, and hard to use.??????

Introducing MRFs?????

The federal TiC rule requires health plans and health insurance issuers to disclose pricing for covered services and items. Insurers must include provider-negotiated rates, as well as allowed billable amounts (aka the maximum accepted price for a given service) for all out-of-network providers. These are disclosed via MRFs.?? ????

The idea behind the policy is that information will be used to help consumers better understand the care they receive and enable them to shop around for the option that will best meet their individual needs.?? ????

These data, made publicly available through MRFs, are quite an innovative first step towards price transparency and healthy payer competition, but currently, sharing that data is much easier than sorting through it. ???

The challenges? ???

The main problem with MRFs is their mega files are far bigger than anyone could have anticipated. The data sets are extremely large and impossible to use. You must represent every (and I mean every) rate that a provider is contracted to perform, whether they perform the service or not. Yet, the important details (e.g., geography, specialty, provider network) are lacking. ???

To put it into perspective, let’s think about the number of multi-specialty practices that are out there. Multidisciplinary offices may have audiologists, physical therapists, orthopedics, and PCPs, and their fee schedule is spread across their entire practice, rather than just performed services. Essentially, you end up with quite a bit of noise in the data, basically meaningless information.? ???

For example in the graphic below, we see that billing code 59514 – Cesarean Delivery – has rates associated with chiropractors. While a chiropractor would not perform this, they are still part of the contracted rate.?????

Another complication is that every self-funded employer needs its own data representation. To try to simplify, regulators introduced the concept of tables of contents.?????

While this did, in fact, minimize the amount of data shared, it also added a ton of complexity to the way in which files must be created, hosted, updated, and maintained.???

The solution??????

It’s not reasonable or realistic to assume your organization is going to have the time to sort through the oceans of data on its own. Rather, you need a one-stop-shop partner who has visibility across the healthcare continuum, with a strong foundation delivering payer transparency MRFs, cost solutions, and network analytics.???????

Introducing Zelis Healthcare Insights 360.???????

Built on Zelis’ proven technology, complementary data sets, and expertise creating, ingesting, and analyzing MRFs , Zelis Healthcare Insights 360 turns the data into an easy-to-use software tool, through which payers can visualize differences in rates across plans and providers. You’ll have a competitive advantage to build, access, and manage competitive, cost effective, and compliant networks with our suite of provider data and analytics services.?????

Yes; no more worrying about unlocking data.??????

I would love to hear from you and continue the discussion. Please, leave a comment and let me know when you hear “Machine Readable Files”, what words come to mind? Is it complex? Overwhelming? Opportunity?????

Watch our 1-minute video on MRFs to get the information you need to know and sign up to receive our upcoming research here.??