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Health insurers are ignoring price transparency rules at the expense of private practice


Since January 1, 2023, the Transparency in Coverage Rule required health insurance providers and health insurers to provide price information to participants in a publicly accessible place. This means consumers should, in theory, be able to go to any payer’s website and see what different doctors, hospitals, and health systems are charging for the same services. The law was meant to allow consumers the ability to shop for health care services based on cost and, thus, hopefully, lower their health care expenditures.

What we have observed contrasts with what was intended. Insurance payers have been slow to follow the rule, with some plans outright not complying with it. Some health plans published a “data dump” of multiple terabytes of information that was impossible for consumers to actually use.

Price transparency is supposed to lower costs. If consumers knew that you could get a knee replacement from a qualified surgeon at a surgery center versus the hospital for tens of thousands of dollars less, they likely would be the driving factor as to where the procedure is performed. In fact, outpatient joint replacements performed in an ASC cost 40 percent less than those performed in a hospital, and other procedures, such as rotator cuff repair and knee arthroscopy, cost over 50 percent less.

The cost can also vary widely according to your health plan. A Blue Cross Blue Shield health plan could have negotiated a rate that’s much lower than United Healthcare, and thus, employer groups and consumers could shop more appropriately.

So why don’t insurance companies want the information public to actually drive down costs? Interestingly, health plans have been able to see what their payer competitors are reimbursing through what is called coordination of benefits for years. With coordination of benefits, payers can view allowable rates for secondary insurances (often their competitors) and have created their own databases.

The answer is not necessarily that payers are concerned about consumers shopping around for health care services but rather that the rules would show the health care community that corporate-owned health systems and hospitals have been enjoying rates that are often 200 percent to 500 percent greater than small to medium-sized physician groups. These hospitals and health systems are often financially tied to many of these health plans. Meaningful price transparency would dismantle these institutions and the supra-normal profits they enjoy on the backs of employer groups and taxpayers.

Payers have been sacrificing physician groups and pointing the finger at physicians as the scapegoat. It’s much easier to create that narrative rather than actually focus the blame on the corporate practice of medicine at these larger health institutions.

What can be done? It’s uncertain if the Center for Medicare and Medicaid Services (CMS) will start enforcing the new rules more forcefully. To date, no health plan has been fined for failing to be in compliance. In the meantime, physician groups need to stand up against payers and negotiate their reimbursement rates. In theory, the health plans should be shifting reimbursement from the hospital to these physician groups. This would result in a more robust and competitive private physician landscape. This would help to avoid the mass entrance of private equity in private practice. Physician groups would be able to remain independent from hospital systems and private equity, where it has been proven that clinical outcomes and patient safety are superior.

As an organization that negotiates for these groups, we understand the impact that this information has on health care and how it could actually control costs while leveling the playing field for physician groups. It could save taxpayers substantially and improve clinical outcomes. For patient-reported outcomes, smaller practices were consistently found to be associated with better access to care and better patient satisfaction.

Nathaniel Arana is CEO, NGA Healthcare. With many years of experience in business and in the health care field, Nathaniel earned a management degree from the Eller College of Management with an emphasis on operational management and organization. He helped start an out-of-network billing and consulting business from concept to profitability. Thereafter, he managed and grew a health care consulting business; under his management, the business dramatically increased its revenues and clients.

Nathaniel started NGA Healthcare because he found that practices were looking for consulting companies that could provide results—not just empty promises. Since then, NGA Healthcare has worked with all specialties to help grow, reorganize, and make practices more profitable. Nathaniel regularly contributes to many healthcare business magazines and companies as an expert in practice management. A physician advocate, Nathaniel believes in working directly with his clients to achieve and surpass their goals.


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