On the third and final day of its National Health Policy Conference Online, a virtual conference, the leaders of the Washington, D.C.-based America’s Health Insurance Plans (AHIP), presented a panel discussion session on pricing transparency and the current evolution of federal regulations affecting health plans and hospitals.
The session, “Navigating the Health Care Transparency Landscape: What’s Next?” was presented in the form of a panel discussion led by Danielle Lloyd, AHIP’s senior vice president, private market innovations and quality initiatives. Lloyd was joined by three fellow panelists: Elinor Hiller, a partner at Alston & Bird LLP; Christi Skalka, managing director, Deloitte Consulting; and Anne Phelps, principal and U.S. healthcare regulatory leader at Deloitte & Touche, LLP.
The panelists focused primarily on two sets of federal regulations: the health insurer price transparency rule finalized on Oct. 29, 2020; and the hospital price transparency regulation, which was promulgated by executive order on Nov. 15, 2019, by then-President Donald Trump.
As explained on the website of the Department of Health and Human Services (HHS), the health plan price transparency rule will help “to ensure Americans know how much care will cost in advance and allowing them to make fully informed and value-conscious decisions. The rule requires that almost all health insurance companies and self-insured plans disclose pricing and cost-sharing information. Under this final rule, more than 200 million Americans with private-sector insurance (both individual-market and employer-based) will have access to a list of real-time price information, including cost-sharing, enabling them to know how much care will cost them before going in for treatment,” HHS explained.
Meanwhile, the hospital pricing regulation promulgated on Nov. 15, 2019 actually involved two rules: “One of the rules is the Calendar Year (CY) 2020 Outpatient Prospective Payment System (OPPS) & Ambulatory Surgical Center (ASC) Price Transparency Requirements for Hospitals to Make Standard Charges Public Final Rule. The second rule is the Transparency in Coverage Proposed Rule. Both the final and proposed rules require that pricing information be made publicly available,” HHS noted on that date.
The hospital price regulation went into effect on Jan. 1, 2021; the health insurer price regulation will go into effect on Jan. 1, 2022.
Asked by Danielle Lloyd to summarize this policy moment around these regulations, Elinor Hiller said that, “Per the price transparency rules, there was plenty of work that predated the rules, but the previous administration issued an executive order and CMS labeled it as a strategic initiative. So the messaging was around consumer empowerment. So the first rule to be finalized was around hospital price transparency, and it took effect at the beginning of this year. Same day CMS issued final hospital price transparency rule, it issued the proposed plan transparency rule. 2022, plans will need to post their negotiated rates, and will have to publish self-service tools. And the last track. Rules that will come out of the Consolidated Appropriations Act that came out in December and included the No Surprises Act.”
What’s more, Hiller said, “Plans will have to make publicly available machine-readable tools for consumers to see their rates. And in 2023, they’ll have to make available a set of tools for shoppable rates. And in 2024, plans will have to make that information available for all services. And there’s been a lot of activity for the past few years around price transparency.”
“What Deloitte has been doing over the last three months is our own analysis,” Christi Skalka said. “Three major themes have developed. The first is that major providers have posted machine-readable files. Major systems have posted those files with confidential rates with payers. Most systems posted in the first couple of weeks. But across the nation, there’s been pretty low compliance. We’re seeing a national game of chicken, where everybody is holding this file close to the chest and no one is yet sharing. Second theme: providers are acquiring as much data as they can, to make sense of it. And the third major theme, separate and distinct from acquiring the data, is developing the analytics to understand specifically their rate position with the major payers in their area.”
In doing that research, Skalka reported that “We’ve uncovered our major archetypes among hospital organizations,” as hospital-based organizations move to respond to the federal rule. “First, there’s the data dumper”: that hospital is sharing “typically one giant file with all the data in one tab, typically from the hospital’s finance system. Second is the picker and chooser. Often hospitals are only displaying Medicare Advantage data, not commercial. The third type is the strategic summarizer. The inpatient rates are rolled up to DRGs, and the outpatient rates are generalized. The final type is the perfectionists, who have created accessible, usable, comprehensive files.”
Further, Skalka said, “While the machine-readable file is the more controversial element, the second issue was around patient-facing. What are patients looking for? We did a survey in the fall to find out what patients are looking for. Three major results: patients are shopping more than they ever have in the past, and are looking at quality and cost. And they’re more interested in quality than cost. And they’re looking at sites like Yelp. And the third major finding, which we think is important, is that patients want a complete estimate, meaning, no surprises. And they want something accurate, meaning within plus or minus 10 percent of what they actually will see in their final bill. And most of what’s out there on the hospital sites is not meeting those needs. There’s not much quality information, and it’s not comprehensive. So where does healthcare really need to go from here? The intent of the rule was to increase competition and encourage consumerism. But so many hospitals just have a “file ready,” and aren’t yet sharing it. But the next step is that HC needs to articulate value to consumers, and provide information on cost, quality, and accessibility. Finally, in the not-too-distant future, we see partnering starting to happen between providers and payers, to provide a much different experience for patients than they have today.”
Skalka’s Deloitte colleague Anne Phelps stated that “Anne Phelps: We’ll talk about what’s happening on the health plan side, and which regulations we really think will disrupt the market. How we think about how these regulatory requirements will start to disrupt the market—many have noted that we haven’t seen any disruption yet. The hospital rules just came online this year. And on the health plan side, we’re starting on 1/1/22 moving out to 2023 and 2024. So it’ll take a while to see things develop. So we have the new law, plus the current rule on transparency and coverage.”
What she and her colleagues are finding, Phelps said, is that “Quality is incredibly important for consumers. When you look underneath these rules, it’s all about the use and coordination of data. It’s all about the data that will require new digital tools. It will change your interactions with your providers and customers. So a lot of this is about data-sharing that not only you will put together, but think about disruptors, other vendors. A lot of this information will be in the hands of the public.”
Presenting a series of slides describing her team’s research on the price transparency regs, Phelps said that “I hear people say, this isn’t really going to have impact. But I say, let’s take a look at it. I’ve listed some of the rules on interoperability, as well as the different price transparency rules.” The key point, she said, is that, “For health plans, you won’t have all the control over the data. A lot of it will be made public by you and by CMS [the Centers for Medicare and Medicaid Services]. And members will have information and will be able to take it other places. And as we go across the healthcare spectrum, it will affect all plans: Medicare, Medicaid, commercial, exchange. And the No Surprises Act applies across the board, including to self-insured employers. We’ll all be in the soup.”
Importantly, Phelps noted, “We did a provider survey last year and a health plan survey this year. Seventy-six percent of respondents to health plan survey say they will pursue technology investments for analytics on competitive and market prices; 64 percent coordinate with providers in communicating pricing and quality information to members. And 72 percent of respondents said they will accelerate innovations in benefit design to better meet employer and consumer needs. Per the 76 percent, those chief strategy officers realize that that will impact market prices. Health plans will have to publish data every month, that will be impactful. And 64 percent said they want to coordinate with providers on price and quality data. And 72 percent of respondents said it will challenge us to come up with better tools and benefit designs on the commercial side, to meet our employers’ and consumers’ needs. You can see the level of response in terms of the strategic approach to these rules and use of data,” she said.
“I think that a lot of plans and providers have focused on the B2B play,” Phelps continued. “But when they come together and look at how they can show consumers the value of their networks, to show them how they provide care, that’s where the opportunity side of this is, on the other side of compliance. And don’t let other vendors get between you and your members. You can do this. Members will appreciate it. So we say, be the disruptor, think about how this ties into your strategic plans and your data disruptor strategy. For me, that’s the starting point out of the gate. Be the disruptor.”
And, Skalka added, “To Anne’s point, providers are looking at this strategically, looking at how they might be able to partner, and whom they might be able to partner with. They’re looking across their landscape now.”
Following the conclusion of the panel discussion, Anne Phelps spoke with Healthcare Innovation Editor-in-Chief Mark Hagland regarding the discussion, and the implications for providers and plans right now. Below are excerpts from that interview.
How do you see the next couple of years playing out, in terms of the ongoing evolution of these regulations?
There’s a lot going on. Number one, there were lawsuits around this [the hospital price transparency regulation], including on the part of the AHA [American Hospital Association]. And it was just late last year that they lost that battle in court. Meanwhile, we’re transitioning from the Trump administration to the Biden administration, and some thought that maybe this wouldn’t happen, but it did. And also, hospitals have to do this annually. My guess is that hospitals will probably ask for a more standard format, and changes to the regulations. To your main question, once the health plans get into the game, and you start to see all the requirements stacking up in the next few years, this will tick up and up and up; more information will be put out in public.
The plans will provide not only negotiated rates, but also the shoppable tools, as required. And it’s an old adage that plans and providers need to work together. But if they don’t step up, other providers will step in. So I think the imperative has become greater now, and these rules are just putting a little bit of lighter fluid on the fire, and health systems need to catch up with the strategy.
Christi Skalka drew a comparison with Expedia, per hospital-based health systems that will be forced to prove and show value? Will be traditional, bricks-and-mortar hospitals and health systems become vulnerable to disruptors?
Yes, Christi and I call it “Hixpedia”! And patients will shop in different ways. I agree with you. And providers are thinking about diversifying revenues and about alternative sites of care. So showing value and sharing data, they’re having to think of new strategies, new ways to compete—and this price transparency effort is a huge part of it. And I agree, if some of these disruptors become nimble enough, are highly rated, can offer specific, targeted services to patients, at planned rates, that will be important for hospitals and plans to think about. And I think the disruptors can come in a variety of forms. The disruptors might be other hospitals that are more strategic, could be post-acute care provider, a commercial pharmacy.
What should the CIOs of hospitals and health systems be thinking about all of these issues around price transparency, right now?
At Deloitte, we start with the data. So, thinking about data that you currently have as a plan or provider; there’s data that is coming into you or you’re receiving; there’s data you have to push out. So in terms of the advice we share with CIOs is that, first of all, we tell them to analyze what types of data are involved. And how do you organize it and deal with it internally. So there’s internal transparency. How do you organize it? Who needs to work with it? Where do you need consent? So, linking the CIO up with their internal business leaders. That sounds simple, but in practice, it’s not. And it’s actually a challenge. And it’s important to build once not twice—to slow down and look at all the rules coming, and for plans, just don’t slap on the compliance for 1/1/22.
What would your overall advice be for CIOs of provider organizations?
Two things. One, thing about your analytical capabilities; this is not one and done. You’ll have to have market-sensing tools. And with interoperability, it’s at the point of care. With price transparency, you have to update every month. So think about what things you have to do to support that. Think about the tool or API that you think will be most useful to your customers. So in addition to understanding and organizing the data, it’s analytics and digital tools, and keeping an eye on the market. At the end of the day, you really need an enterprise strategy around this. You need the provider team, with your CIO team, with your consumer team, to figure this out. You can’t just meet these compliance requirements on their own. And I’d say, grab this one by the horns. This would be a really good one to go faster on, in terms of differentiating your health plan, on the plan side.
