The Transparency in Coverage Final Rules took effect on July 1st. CMS is monitoring for compliance (just like providers), requiring most health plans and health insurance issuers in the individual and group markets to publicly disclose certain pricing information on their website, including:
- In-network rates for covered items and services between the plan or issuer and in-network providers
- Out-of-network allowed amounts, including historical payments and billed charges for covered items and services
- Negotiated rates and historical net prices for all covered prescription drugs at the pharmacy location level
Providers should consider mining and leveraging the published payor information to inform negotiations with payors.
Six Steps Providers Should Know to Create a Favorable Negotiation Strategy
The veil surrounding contracted rates is now lifted. Providers now have access to the rates paid by plans and issuers to other providers, hospitals and health systems. Consequently, providers can now engage payors with more information in hand to support contract negotiations or to increase market share.
Information is power, but only when fully understood and appropriately used to support decision-making. Providers should follow the steps outlined below to develop a deliberate personalized strategy to download, mine and analyze this publicly available information.
- Organize and create a priority list of your contracted commercial payors by contract expiration date to ensure readiness to enter negotiations with publicly available information.
- Research and download the corresponding in-network rates for each commercial payor on your priority list. Be sure to create a project plan with enough lead time to support this extremely labor-intensive project due to the size and scale of the machine-readable files. And be prepared to download and review potentially thousands of files. The huge scale and complexity of the data needs to be considered when creating your plan.
- Prepare for comparative analysis between your existing contracted rates vs. those publicly available by exporting the contracted rates with the same payor in a format that may be compared to that same payor’s downloaded publicly available rate data. Judgment calls may be necessary due to the sheer array of payor agreements.
- Target opportunities to establish thresholds for identifying large variances between what your facility is paid vs. other facilities or health systems in your geographic area for high-dollar procedures, items and/or services. Additionally, consider the procedures, items and/or services that reflect the specialized training or experience of your physicians and facility and how your rates for those services compare to those paid to others.
- Develop an individualized negotiation strategy analyzing the data to determine which items and services to emphasize during rate negotiations based upon their expected revenue impacts. Additionally, perform a historical analysis of current rates compared to sought-after rates with current patient volume. Appeal to considerations of equity, patient volume and the exceptional services provided by your physicians and facility.
- Consider other contracting opportunities such as examining the potential to bring out-of-network payors in network. Analyze rates paid by out-of-network payors to other facilities and perform an analysis of opportunities for contracting based on patient volume.
Using the strategies outlined above to leverage payor pricing information could positively impact providers creating an opportunity for a more level playing field with plans and issuers.
Resource
- CMS Transparency in Coverage: https://www.cms.gov/healthplan-price-transparency
These materials are for general informational purposes only. These materials do not, and are not intended to, constitute legal or compliance advice, and you should not act or refrain from acting based on any information provided in these materials. Neither Ensemble Health Partners, nor any of its employees, are your lawyers. Please consult with your own legal counsel or compliance professional regarding specific legal or compliance questions you have.