Price Transparency, Is It Possible to Achieve?

Suzann Crowder, MBA, CMPE

Late in 2019 the Department of Health and Human Services, the Department of Labor, and the Department of the Treasury issued a proposed rule, "Transparency in Coverage" that would require most health insurance issuers to disclose price and cost-sharing information to participants, beneficiaries, and enrollees up front. The rule requires insurance companies to provide accurate estimates of patient cost for medical services believing this will improve patient consumerism and ultimately reduce the cost of health care.

The comment period for the proposed rule was extended until January 29th with mixed reaction from stakeholders. Concerns range from legal and privacy issues to overwhelming the consumer resulting in a negative impact.

Patients Perspective

According to the Health Care Cost Institute 2017 Health Care Cost and Utilization Report per person health care spending reached $5,641 with 6.7% of that representing ER visits. This data suggest that a large portion of the consumers medical spending can be planned for and options considered prior to receiving services. However, there are several barriers to consumers:

·        Lack of access to accurate out-of-pocket cost and in-network status for available providers of service

·        Lack of choice in their community, possibly due to a rural setting or lack of transportation

·        Lack of choice within the narrow network of their insurance plan

·        Low medical care/medical billing literacy, limiting ability to understand what services are actually needed, how to obtain the needed information to compare and/or ability to accurately compare options for quality, cost, or access.

·        Lack of financial preparedness for large health care out-of-pocket expenses.

·        Established behavior that relies fully on a trusted health care provider to direct all care and services without considering cost in advance.

Providers Perspective

Providers have been slow to modify their patient financial policies to adapt to increasing patient financial responsibility and growing interest in price transparency. There are several tools available to all size facilities that provide guidance for best practice patient financial communications and supporting patient medical billing literacy.

However, even the most proactive facilities struggle with efficiently obtaining accurate and current information from insurance carriers as well as communicating pricing information to patients. Some specific issues are:

·        Inaccurate, inconsistent or incomplete information from insurance companies regarding plan benefit coverage and patient out-of-pocket amount.

·        Complexity of estimating the patients cost when deductibles, portion of out of pocket max remaining, and the final billed services often change between estimate and final claim adjudication.

·        Poor patient medical billing literacy; patients often do not understand:

o  That multiple entities will bill for services such as physician professional, facility, anesthesia, radiology and pathology fees.

o  Insurance plan structure, what is covered, and how out-of-pocket amounts are determined.

o  That the estimate provided by one entity will not be all they owe for all providers and facilities and the final out-of-pocket can be greater than the estimate.

·        Patients are often unprepared to meet the financial obligation of their out-of-pocket cost for medical services. It is left to the physician’s office to be the medical billing educator and financial planner for their patients. 

·        The physician, who has the direct personal relationship with the patient, is now also the bill collector. This distracts from and reduces the important patient-doctor relationship that is key to successful health care.

Will Insurance Companies Take Some Responsibility?  

A cynical person would charge the insurance companies with intentional obfuscation and risk shifting as part of their business plan. The governments move to require changes by insurance carriers through the Transparency in Coverage Proposed Rule is needed and, at a minimum, will nudge the industry towards improved pricing transparency for patients and providers of service.

Ideally insurance carriers would be required to be very specific and detailed with personalized data for patients, their dependents, and providers in advance of medical services. The information would need to:

·        Allow for multiple data entry points to research options on the fly including: physician, facility, date of service, procedure code or description, and diagnosis codes or description.

·        Once entered or modified the resulting patient out-of-pocket should be displayed and broken down by type such as co-pay, co-insurance, deductible and the resulting impact on and running total of out of pockets maximums.

·        Alerts should be triggered by data points that will impact the patients out-of-pocket such as:

o  Out-of-network provider or facility

o  Date of service outside range of plan term

o  Possible medical necessity limitations for procedure and/or diagnosis combinations

o  Deductible not applicable (preventive care)

o  Pre-authorization, pre-certification, or referral required

o  Non-covered services or items per patients plan

o  High possibility of associated or related charges such as anesthesia for surgery case or radiologist reading for MRI.

·        The insurance carriers should be required to stand by the information provided and not include broad disclaimers that excuse them from abiding by the provided information.

·        The feature should be easily accessible for members, their dependents, providers and their staff. Confirmation reference numbers or other mechanism should be provided as a tool for all parties to reference for consistency.

·        Future goals should include links to accurate data on providers and facilities selected including quality measures and patient satisfaction ratings. In addition, reliable links for clinical data for procedures or items selected that would provide non-biased, easy to understand clinical information about the considered services.

Making these features available will be a huge undertaking and will require large amounts of money and time. The investment will be required if the industry can make any strides in improving consumers responsible participation in their health care services. Perhaps focusing on insurance company’s responsibility to be part of the solution will encourage these companies to move towards simplification and consumer friendly products and features.

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