Many factors need to be taken into account when health insurance plans and other payers comply with price transparency rules mandated by the Centers for Medicare & Medicaid Services (CMS), according to an article in Health Affairs.
All but one of the nine authors of the article work for insurance giant Elevance Health, with the main message being that “descriptive statistics derived from the pricing data do not fully capture the intricacies of the out-of-pocket price faced by a consumer.”
Andrea DeVries, Ph.D., staff vice president for health services research at Elevance Health, told Fierce Healthcare that “the general takeaway from our article is that using price data without the utilization data is going to be tough.”
“This is meant to be guidance or helpful tips for researchers,” DeVries said. “We know that there are going to be data science companies, data analytics companies that will be working with this data.”
She noted that healthcare recruiting agency Kelia Healthcare has issued various reports about price transparency.
“We know people are very interested in it and working with it,” DeVries said. “And we just wanted to share some of the lessons that we learned.”
CMS mandated that payers release price data in three phases. The first occurred last July when payers released so many data that nobody could make head nor tail of them.
CMS predicted that this might be a problem and encouraged payers to seek out third-party computer vendor experts to help decipher the information with the aim of massaging it to a point where it could be used by consumers. However, even computer experts found the task nearly impossible.
Kosali Simon, Ph.D., a nationally known healthcare economist at Indiana University, told Fierce Healthcare at the time that “we have had a team of data science masters’ students analyzing the data here at Indiana University. Even to download one tiny, tiny part of it is a giant task, let alone open the file or understand the data.”
The second phase involved payers making price information available for an initial list of 500 items and services on Jan. 1, 2023, but, again, the data proved difficult to decipher.
David Cutler, Ph.D., an internationally known healthcare economist, told Fierce Healthcare then that “it seems likely to me that insurers are complying in the least helpful way possible.”
The Health Affairs article that DeVries co-wrote compares Elevance Health's pricing data to the plan’s administrative claims data.
“Based on that analysis, we provide recommendations on how to use the pricing data for the purpose of either conducting research, such as on the cost of care and price variation, or for creating tools for consumers to price shop,” the article said.
They focused on colonoscopies because it’s a fairly common and uncomplicated procedure to see whether using those data alone might lead to inaccurate pricing conclusions. The authors looked at colonoscopies performed in August 2022 in Colorado.
They pinpoint a series of problems with pricing and offer recommendations. For one, most listed prices do not have an associated cost. The recommendation? “If possible, researchers and data scientists should confirm actual use via claims. If not possible, use provider specialty field to limit the prices to only those who perform a procedure of interest," according to the article.
In addition, the authors note that some providers listed in a state can’t operate in that state. The authors suggest using the ZIP code associated with National Provider Identifier data to determine prices in a given region.
Other challenges and the authors' recommendations include:
- Use distribution affects the mean price. Recommendation: “Supplement the price files with usage data if possible and weigh the prices by use. If no usage data are available, caution should be taken when reporting summary statistics from the data, and full distributions should be presented.”
- The total cost includes professional and facility components. Recommendation: “Differentiate between professional and facility prices when making comparisons. Don’t use price data alone for episode-level inferences as just adding together the mean professional and facility prices may not equal the mean episode-level cost because the unique combination of facility and professional is important.”
- Location can greatly affect prices. Recommendation: “When working with price data, limit analysis to places of service that are procedure-specific. Stratify results by place of service where possible.”
- Facility prices don’t make it easy stratify care based on place of service. Recommendation: “When working with price data, limit analysis to places of service that are procedure specific. Stratify results by place of service where possible. Use publicly available NPI data to determine place of service when working with facility data.”
- One provider can have many prices for a procedure. Recommendation: “Don’t use price data alone for episode-level inferences, as patient-level insurance characteristics can also impact the price of a procedure.”
The authors argue that computer experts also need to keep in mind that there’s often confusion regarding the national provider identifier, an ID for providers.
“As academic research organizations begin to study and analyze price transparency data, it is important to use additional data such as claims, from partner teaching institutions, professional providers, or other third-party claim sources to supplement payer machine-readable price files,” the article said. “Use data from claims give the best representation of which NPIs are performing a given procedure. Without data related to use, limiting data to NPIs in a given geography and specialty can give a better representation of the prices of procedures being performed.”
DeVries said the system should focus on episodes of care.
“Our concern would be that due to the complexity of the material, it would be very easy to draw incorrect conclusions, or put numbers out there that really don’t make sense for the consumer," she said. "We want to get ahead of that.”