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July 28, 2022

Anyone can now see insurers' prices. But can 'mere mortals' understand them?

Daily Briefing

    As of July 1, health insurance pricing information for most health care services must be publicly available, but the overwhelming amount of data means it is not understandable to most consumers, Julie Appleby writes for Kaiser Health News.

    The price transparency trifecta: 5 takeaways from our expert panel

    About the new health insurer price transparency rule

    A new federal regulation entered effect on July 1 requiring health insurers and self-insured employers to publish an itemized list of the prices they pay for most health care services—a move that gives consumers access to cost estimates for around 500 "shoppable" services.

    Under the rule, all health insurers and self-insured employers are required to publish their negotiated prices paid to in-network providers and hospitals, as well as their allowed rates for out-of-network providers and hospitals, in machine-readable files.

    Companies that fail to publish their data face a fine of $100 per day per enrollee, which means that a company that provides health insurance to at least 10,000 employees would be hit with $1 million in penalties in a single day.

    "For the first time, an employer will be able to go to an insurance company and say, 'You have not negotiated a good-enough deal, and we know that because we can see the same provider has negotiated a better deal with another company,'" said James Gelfand, president of the ERISA Industry Committee, a lobbying group for large, self-insured employers.

    An overwhelming amount of data is proving hard to digest

    According to Appleby, health insurers have posted their pricing data on public websites, but the sheer size of these databases has made it difficult for consumers to access, much less understand.

    "There is data out there; it's just not accessible to mere mortals," said Sabrina Corlette, a researcher at Georgetown University’s Center on Health Insurance Reforms.

    So far, it's difficult for patients to see the prices under their specific plan or even different plans offered by one insurer. Employers also cannot easily use the information to compare their insurers' negotiated rates with others'.

    Currently, the data is in a format that computers can read but is not easily searchable, and employers "really need someone to download and import the data" to make it more usable, according to Randa Deaton, VP of purchaser engagement at the Purchaser Business Group on Health.

    "The question is what is the story this data will tell us?" she added. "I don't think we have the answer yet."

    To make the data more understandable, private firms and researchers, some of whom are aiming to commercialize this information, are taking on the task of analyzing the data and producing more accessible versions, Appleby writes.

    For example, Turquoise Health has downloaded more than 700,000 unique files, or around 250 billion pages of typed text, which is around 17% to 50% of the total available data, so far. After the data is downloaded, the company hopes to organize and share it, first with its paying customers before offering it free of charge to consumers.

    Could additional rules improve accessibility?

    On Jan. 1, 2023, a new rule will take effect that will potentially improve consumers' access to pricing information. It will require insurers to offer apps or other tools that help policyholders estimate the cost of a visit, test, or procedure.

    It will also require insurers to make available the costs for 500 government-selected "shoppable services," which include knee replacements, mammograms, and MRIs, online or on paper if requested. Then, in 2024, insurers will be required to provide consumers with cost-sharing information for all services, not just the initial 500.

    Insurers also face additional regulatory requirements under the No Surprises Act, which went into effect this year. Currently, providers are required to provide upfront "good faith estimates" for nonemergency care when requested by patients who are uninsured or who are paying for care out-of-pocket.

    In the future, the No Surprises Act will also apply to insured patients using their coverage benefits, and insurers will be required to give policyholders information about costs before they receive care in the form of an advanced explanation of benefits (EOB).

    According to Corlette, this means that patients could theoretically receive an upfront EOB and have a price comparison tool that could help them decide where and from whom to get a specific service.

    However, given the complexity of the regulations, Corlette said she is skeptical that "these tools will be available in a usable format, in real life, for real people on anywhere near the timeline envisioned." (Appleby, Kaiser Health News, 7/27)

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