On October 18, 2022, Turquoise Health published its Price Transparency Impact Report, which outlines the healthcare industry’s progress on compliance with price transparency requirements and outlines a path forward to achieving industry-wide adoption.
Background
There are currently three regulations that come together and define the health care price transparency landscape: the Hospital Price Transparency Final Rule, the Transparency in Coverage Final Rule, and the No Surprises Act.
On January 1, 2021, under the Hospital Price Transparency Final Rule, hospitals were required to start publishing their negotiated private-insurer rates. Then, in July 2022, under the Transparency in Coverage Final Rule, payers were required to disclose their negotiated rates for all items and services for all providers. However, since each of those dates, we have seen varied levels of compliance with the requirements and uncertainty surrounding whether patients are actually using the data to their benefit. Additionally, on January 1, 2022, the No Surprises Act went into effect, which limits the amount that patents can be charged to the in-network rate.
Turquoise Report Findings
In the report, Turquoise reviews price transparency regulations, the innovation that has started as a result of third-party organizations, and additional government actions needed for price transparency to be fully integrated in the healthcare industry.
When it comes to compliance, Turquoise reports that 76% of hospitals have posted a machine-readable file (MRF), 65% have posted an MRF with negotiated rates, and 63% have posted an MRF with cash rates. Of those in compliance, some of the major health care systems (i.e., Mayo Clinic, Advocate Aurora Health, The Cleveland Clinic Health System, and Prime Healthcare) have 5-star MRFs, the highest possible score, meaning they have a complete MRF with cash, list, and negotiated rates for a significant quantity of items and services.
55% of short-term acute hospitals received a 5-star “complete” rating (a total of 2,264 hospitals), 24% received a four-star “mostly complete” rating (a total of 970 hospitals), 8% received a three-star “partially complete” rating (a total of 309 hospitals), and 13% received a two-start “partially incomplete” rating (a total of 544 hospitals).
On the payer side, eighty carriers have published rates, including BlueCross BlueShield, United, Cigna, Aetna, and Humana.
The ten most search shoppable services in Q3 2022, according to Turquoise Health, are: implantable cardiac loop recorder, CT scan head or brain without contrast, colonoscopy diagnostic, surgical drainage of hematoma or seroma, mammogram screening, diagnostic heart catheterization, joint arthrocentesis, x-ray hip and pelvis, tonsil removal patient under 12, and CT scan of cervical spine without contrast.
Recommendations
Turquoise Health noted that as of the report writing, the Centers for Medicare and Medicaid Services (CMS) had only issued penalties for non-compliance to one health system, despite many hospitals “still significantly out of compliance.” They argue that a “more active stance in penalizing non-compliant systems” is necessary, coupled with public recognition of the hospitals that are compliant.
Additionally, given that when it comes to payers, it is up to individual state departments of insurance to evaluate compliance with the Transparency in Coverage rule, uniform enforcement is difficult to get.
Conclusion
“We expect the initial phase of price transparency adoption to take five years,” says Turquoise Health Co-Founder and CEO, Chris Severn. The clock started in January of 2021 when the first of three different rules and laws that dictate price transparency went into effect. “After seven quarters of transparency, progress is evident. 65% of hospitals have published robust negotiated rates. Additionally, 80 carriers have also published rates, representing the majority of covered lives in the United States,” says Severn.
Severn (and the report) conclude that “further government action and third-party innovation is necessary to facilitate a competitive market in healthcare. Standards should be adopted for shoppable service packages and hospital machine readable files.”