Another component of the government’s Transparency in Coverage mandate and No Surprises Act legislation for health insurance plans will go into effect on January 1, 2023 for price transparency.
Another component of the government’s Transparency in Coverage mandate and No Surprises Act legislation for health insurance plans will go into effect on January 1, 2023 for price transparency. This phase of the mandate requires most commercial insurers and group payers to provide out-of-pocket cost estimates for 500 items and services to health plan members. To better understand how insurers are managing this process, we recently surveyed 200 health plan executives and the findings offered a few surprises: they overwhelmingly believe transparency is beneficial, but getting the required data is incredibly complex.
Executives Are Hopeful About Transparency
While health plan executives shared challenges with compliance, 9 out of 10 agree that price transparency is good for providers, consumers, and their own plans. The benefits of price transparency have been widely debated over the last decade and there is now widespread consensus that the opacity of pricing in healthcare is a pressing issue that must be solved. Price transparency in healthcare has been linked to the promise of consumerism – the hope that people will start to compare options and make more empowered choices versus selecting high-cost care that isn’t necessarily high quality. The mandates alone are not a silver bullet for all that ails the overly complex and expensive healthcare system, but they shed light on issues in a manner that’s never been done before.
Shedding Light on the Challenges of Transparency
When asked about the hardest aspects of keeping up with transparency mandates, executives placed data management at the top of the list. Following closely is keeping up with the CMS data schema.
The challenges plans face around data management aren’t unique to price transparency. Negotiated rates have been buried in claims adjudication systems and are used post-care delivery. It’s a major undertaking to turn that data into out-of-pocket estimates that people can easily search for and effectively use when planning their care, and do it at scale. Claims systems aren’t built to price care for hundreds of providers in real time. Plus, plans must apply logic to raw billing code-level rates and share them in a consumer-friendly way. They need to ensure only appropriate providers show if rates are applied to all in-network providers, and that place-of-service codes are applied properly.
Going Beyond the Letter of the Law
Nearly all (91%) executives agree that current price transparency requirements are only as effective as the user-friendly experience they can build for consumers. The mandate itself only requires estimates to be available at the billing code level, which is not helpful for patients seeking information about what they will pay for care in a more holistic way. This means someone could search for knee surgery and may only see the professional fees for the surgeon, and not the other costs of their surgical procedure.
Nearly 3 in 5 (57%) health plan executives say they are thinking strategically to leverage the January 2023 mandate to offer new member experiences. There are a few key ways plans can help their members find, compare, and access quality care by taking the mandate and building member experiences that deliver additional value for members:
Go beyond showing just the numbers. Ensure members are guided to appropriate care options that are relevant to their current health situation so they can make decisions without having to be experts.
Display the real cost involved. A person who searches for knee repair doesn’t just want the cost of the surgeon’s fees or an MRI. The best member experience will support savings opportunities for complex, end-to-end episodes of care, such as surgery, with contextual costs, details, and time involved from evaluation through recovery.
Incentivize members to save. We know from behavioral economics that people will make different choices if financially incentivized to do so. We’ve seen health plans drive people toward more cost-effective care by offering rewards as low as $25.
Even with the associated challenges with meeting the mandate, health plans are looking forward to the benefits. Nearly 4 in 5 (78%) say that new tools for price transparency will improve consumers’ experiences. Now, that’s not really a surprise. Helping improve how people experience healthcare is certainly something we can all get behind.
Mark Menton is General Manager at HealthSparq.