Limited insight into the true price of elective healthcare services puts plans, brokers and their clients at a disadvantage. They may struggle to negotiate appropriate reimbursement rates, design cost-effective plans and create high-quality networks. Under these circumstances, they lose money.
At the same time, mounting cost pressure are prompting employers to act. The largest brokerage firms in the country project that health benefit costs will rise between 6% and 9% this year.
Recently, the Transparency in Coverage and Hospital Price Transparency regulations have required health plans and hospitals to provide rates-based data on all services. February’s executive order on price transparency only turns up the heat, as the Trump administration is keen on “holding the healthcare industrial complex accountable.” Couple that pressure with competitive and regulatory pushes to keep care costs in check and it’s imperative for plans and brokers to understand the full landscape of utilization, pricing and reimbursement in their markets.
Many third parties have stepped up to make hospital and health plan pricing data available – but all too often they leave it to customers to make sense of data sets that can include billions of records. Claritev is uniquely positioned to help plans and brokers generate actionable insights from pricing data, empowering them to make informed decisions about setting competitive reimbursement rates, designing high-quality networks and helping their clients make care more affordable for patients.
Negotiating from a disadvantage
One of healthcare’s worst-kept secrets – and the motivation for recent rulemaking and executive orders – is that the price a health system charges for a service isn’t the price a plan or patient ultimately pays.
Traditionally, commercial health plans have negotiated discounts from the “sticker price” set by the hospital chargemaster. Even with a heavy discount, the payment to the hospital exceeds the true cost of providing the service. This is especially true when compared to the Medicare benchmark for a service – a rate set by the Centers for Medicare & Medicaid Services (CMS) and applicable to traditional Medicare plans.
Negotiating discounts from sticker prices don’t benefit commercial plans or brokers. Because they still pay too much for healthcare services, they incur cost increases they have no choice but to pass on to their clients – and can lead them to lose business. Plans and brokers also struggle to optimize plan and network design for high-quality care, as there’s no way to tune rates to the true cost of care. On top of everything else, negotiation is a time-consuming and labor-intensive process.
The challenge is that, to set rates that benefit all parties, commercial plans and brokers need more than clean, trustworthy and up-to-date pricing data that’s already publicly available. They also need robust analytics tools that make it possible to compare rates, curate networks and improve their competitive positioning.
Contextualizing cost data at scale
PlanOptix from Claritev ingests hundreds of billions of records and delivers more than 125 billion enriched price transparency records across over 160 health plans and 3.5 million providers. All told, this represents 93% of the commercially insured and employer sponsored population in the U.S.
However, size alone is insufficient to enable data-driven decision-making. For each provider data set, PlanOptix applies a Data Usability Rating, a proprietary assessment of the data’s adequacy and coverage. That helps plan and broker executives prioritize data sets that they can quickly identify as reliable and relevant for setting their business objectives.
PlanOptix also includes analytics models that contextualize healthcare costs. Users can easily see contracted rates as a percentage of what Medicare fee schedules pay ad the code, procedure group, and network level, providing an easy and apples-to-apples comparison of providers across health plans. The results of the analytics models are far more granular and insightful than the Uniform Discount and Data Specification (UDS), which is shown to favor national carriers. This gives plans and brokers significant leverage when negotiating rates.
What’s more, the combination of proprietary analytics and price transparency at scale enables PlanOptix users to take a holistic look at pricing differences by factors such as geographic market, location of covered lives, or historicalutilization patterns.
From there, PlanOptix users have the insights they need to create high-performing networks. This offers a key advantage in competitive markets while providing an opportunity to better serve “market deserts,” where such networks don’t otherwise exist. Plans and brokers can also use the pricing data in their hands to create custom cost and plan comparison solutions. This, too, creates a competitive advantage, as their clients now have tools to better control employers’ healthcare costs, limit patient out-of-pocket spending and steer utilization to high-quality, cost-effective care.
Improving healthcare price transparency is a continued priority on Capitol Hill, as it helps prices, reimbursements and costs to commercial plans and patients remain reasonable. Plans and brokers striving to succeed in this environment can turn to Claritev for insights from pricing data that support their efforts to negotiate rates, create networks and design plans that best meet the needs of their clients and the patients they serve.