Payers harnessing data to get ready for Transparency in Coverage requirements

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One of the most important components of the No Surprises Act is the Transparency in Coverage rule, the requirements of which have been rolling out throughout the year – requiring health insurers and group health plans, including self-funded clients, to provide cost-sharing data to consumers via machine readable files and consumer price transparency tools. Already, payers are gearing up for the next phase.

That next phase begins on January 1, 2023, when the price transparency tools will be formally required. Published machine readable files are already a reality, as that requirement kicked in for payers on July 1 of this year. These files provide pricing data for covered items and services based on in-network negotiated payment rates and historical out-of-network allowed amounts.  

A third machine readable file for prescription drug rates and historical costs has been delayed pending further guidance, according to UnitedHealthcare.

After the new year, when the price transparency tools will be mandated, "patients should be able to access an estimation of their cost of care," said Carol Skenes, payer and provider strategist at Turquoise Health. "Copay, coinsurance, deductibles and the rest will be similar to the machine readable files – the end goal is to give the patient an idea of how much they'll be required to pay."

Originally, the price transparency tools were going to be required on July 1 of this year, along with the machine readable files. But this phase of the rollout was delayed due to payer and provider difficulties in meeting the requirements on time. 

According to Jonathan Wiik, vice president of Healthcare Insights at FinThrive, payers have made use of the extra time and are mostly ready for the next phase to begin. In that phase, payers will need to compile a list of negotiated rates for 500 shoppable services – a list that UnitedHealthcare, CVS, Aetna, Cigna and other major players say they have already completed. 

What gives payers a leg up, said Wiik, is that they already have access to reams of data. They want to manage their risks and keep premiums and care costs down, and since they contract nationally, they tend to have fairly sophisticated data sets.

"Payers have much more data than a hospital does," said Wiik. "They live and breathe analytics, so they have a lot of this information lying around. They're at risk for all of those dollars."

Another reason for the delay in the Transparency in Coverage rule's next phase was to give stakeholders time to wrap their collective heads around the Advanced Explanation of Benefits (AEOB), which will also be required starting January 1. Typically, explanations of benefits came within about a month. The issue with that, said Wiik, is that most claims at a hospital take three to five days to be processed – less if it's for an easy procedure, like an MRI. Surgeries, by contrast, can take five or six days. That makes it challenging to estimate the cost of a visit from the payer side.

"Medicine is an art, not a science," said Wiik. "It depends on how much drugs are needed, what procedures are performed. That's a spectrum. If you come to the emergency department with chest pain, that could be $5,000 or $50,000, depending on how bad things are. You won't know within 24 hours. I don't know if EOBs were designed for heart attacks, but it's weird. That's one of the reasons why they punted."

In keeping with the phased approach to the final rule's implementation, stakeholders will need to have a list of 500 CPT codes ready by January 1, listing all of the services that are required to be in the price transparency tool. After one year, on January 1, 2024, they'll be required to have estimates for all items and services.

"This world of allowing patients access and knowledge about their cost of care seems to need a phased approach," said Skenes, "because there's been some technical hookups, and cost of care has been decided after care is over or the patient leaves the hospital. This is about shifting that to before the care appointment."

To prepare, some payers have been making patients aware of what estimates are available to them prior to their care. But pulling all of that data can be a complex process.

"In the old world, these cost amounts weren't calculated until after a visit occurred and services had been rendered," said Skenes. "Payers are asking [the Centers for Medicare and Medicaid Services], 'Can you give us some technical guidance to create an estimate earlier in the cycle?' There have been a lot of comments and questions from payers on how to make all of this work in a more automated way."

CMS' response was to delay that requirement while they take a look at how best to guide the conversation on data interoperability. With different organizations sometimes operating out of different systems, it could be a question of getting different electronic health records and payer warehouses to talk to each other prior to claims submission, Skenes said. If an estimate comes in before care occurs and the final calculation is different, the work then is to minimize the difference between the two.

Skenes expects that CMS will crack down on compliance in the new year after being somewhat lax in 2022. To date, she said, CMS has only financially penalized two hospitals for being out of compliance with the machine readable files requirement; Skenes anticipates that will change as the accuracy and comprehensiveness of the data become more important.

"Patients in particular have the ability to maybe educate themselves and ask better questions on the difference between the estimate they get up front and their final bill," she said. "It gives them language and a better understanding of what has been a very inaccessible process. This is the first step in empowering patients in understanding what's going on."

According to Wiik, payers are being quiet and waiting to see how the final rule will play out.

"You haven't heard much from AHIP," he said. "Payers don't squawk much when these rules come out. They do the minimum to meet the requirements. They don't like press at all, so 'less is more' is their philosophy. They probably support a lot of the rules that are there – from the payer lens, the more data and transparency that is out there, the better they're going to do.

"Payers are actually well-positioned for this stuff," he said.
 

Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com