Healthcare News & Insights

More payment transparency is coming, but will it help anyone?

Last month Medicare released its physician payment data to the public. And now, for better or worse, even more cost transparency is coming to the healthcare industry. 

158532063Cost transparency in the healthcare industry has become a new key focus for many government and healthcare agencies, leading to the recent release of physician service payments by the Centers for Medicare & Medicaid Services (CMS).

The transparency push comes primarily from changing insurance plans and higher deductibles, which have begun to drive patients to learn more about the costs associated with their care.

Following CMS’ transparency move, three of the largest insurers in the U.S. (Aetna, Humana and UnitedHealthcare) are planning to release their own information about physician payments to the public, according to a recent Modern Healthcare article.

Transparency in action?

The insurance giants announced Wednesday that they would be partnering with non-profit group, Health Care Cost Institute (HCCI).

HCCI will use information on processed claims provided by the insurers to create a free public database, where people can see and compare how much providers charge for medical services.

The non-profit expects the database to be available sometime in 2015, and that even more insurers will join the effort and contribute their data. The hope is that the database will aid individuals in their health care shopping, now that the Affordable Care Act has given Americans many more options for coverage.

The database also may just be a preemptive move, since more states are passing cost transparency legislation anyway.

There are currently 11 states with mandatory payor claims databases, with another six currently debating the creation of databases.

Despite the benefits of transparency for consumers, there are serious concerns about the logistical and unintended consequences of care transparency on the healthcare industry.

Information travesty waiting to happen?

Many healthcare professionals were concerned about the effects the CMS data release would have on healthcare facilities and practices. Initially, the general fear was that the information would be misinterpreted by the public and news media to make legitimate physicians and facilities appear as if they were over billing and prescribing.

The American Medical Association (AMA) said in a letter to CMS, that this is exactly what happened. AMA CEO Dr. James Madara, complained that, “Untrained observers are using the data to make flawed regional, specialty or other comparisons that CMS should do more to discourage.” In particular, media reports over looked flaws in CMS’ data which misled patients into making health choices that weren’t beneficial to them.

For example: CMS’ data lumped payments for expensive prescriptions in with overall payments for services, which then incorrectly inflated some physicians overall expenses. Some hospital and group practice doctors also saw some blow back from the data, making certain doctors look like they have huge bills because multiple doctors from the facility submitted claims under one provider.

Given the consequences that plagued physicians from CMS’ data release, there’s a decent chance the “Big Three’s” database may cause similar problems.

Madara’s solution for these transparency issues will hopefully be considered in the new claims database being developed. Madara asks CMS to allow healthcare providers to edit the information before its made public. This way, if there are any unintended administrative errors in the data, providers can correct it before it confuses and misleads patients. It’s unclear whether CMS will take his request to heart, but hopefully, private payors will give the solution a shot for their future transparency efforts.

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