in full disclosure: healthcare pricing

In case you missed it, the shackles are coming off healthcare pricing data. Payers, PBMs and hospitals are  releasing massive amounts of previously private pricing data into the public sphere. It looks like a giant data free-for-all... machine-readable files, APIs and consumer tools revealing in great detail:

• how payers are reimbursing medical and pharmacy providers
• what providers are charging their patients for "shoppable services"
• what drug rebates and discounts are being paid (pending rule-making)
  
  

Consumers can use the information to shop and price compare but their ability to make sense of the data will depend heavily on the efforts of payers, providers and 3rd parties in curating the data and simplifying user experience. It promises to be a confusing time of transition. Payers and providers can use this public data to benchmark their competitive position, strengthen networks and improve member/patient experience. 

What pricing data must be disclosed?

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Hospitals
beginning January 1, 2021

For all medical services including hospital-administered drugs, the following will be publicly available on machine-readable files:

• Gross charges
• Discounted cash price
• Payer-specific negotiated charges
• Minimum negotiated charge
• Maximum negotiated charge

For a minimum of 300 shoppable services (70 of which are CMS-prescribed) the above price components must be shown online in a user-friendly consumer format.

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Government Program Payers
Medicare Advantage, Medicaid/CHIP, QHPs on Federally-facilitated Exchanges
beginning January 1, 2021

Interoperability via Application Programming Interfaces (APIs) using standards-based protocols (FHIR HL7) allowing 3rd party developers to create digital apps which enable consumers to access their healthcare data on demand.

For all apps developed using these APIs, usage will be consumer-directed with secure delegated access (OAuth) regardless of carrier.

• Patient Access API – adjudicated claims detail, cost sharing, clinical data, lab tests
• Provider Access API - online access to provider directories

• Payer-to-payer exchange API - effective January 1, 2022 (enforcement delayed pending additional rule-making)
• Prior Authorization API  (proposed, Jan 2023)

Insurers and Group Health Plans
Individual market and non-grandfathered group plans
beginning January 1, 2022 (enforcement 7/1/2022)

For all medical services and drugs, make publicly available machine-readable files for the following:

• Provider in-network rates
• Provider out-of-network paid amounts
  Deferred pending additional rule-making:
• Net historical drug prices (net of rebates and other price concessions)

Beginning January 1, 2023, real-time personalized out-of-pocket cost sharing via internet self-service tool for 500 medical services. In 2024, this information will be required for all services.

New opportunities, new threats

Beyond the immediate compliance and operational challenges, industry stakeholders should take advantage of new opportunities while mitigating risks arising from these new data sources: 

• Business Intelligence: integrate new data into existing platforms
• Market Reputation: identify pricing outliers that have reputational risk
• Network Pricing: re-assess market position and provider composition
• Value-based Care: leverage pricing data to inform value-based strategy
• Member Engagement: build trust by simplifying member experience
• Product Design: incorporate new data into plan design

​Prospective Strategies empowers healthcare business transformation. With the right strategy, you can unlock your product potential and maximize market opportunity.