On July 29, CMS proposed that hospitals post their contracted rates with commercial insurance companies online, which you can view here.  There has been a great deal of discussion around “Surprise Medical Billing” and how patients are caught in the middle (see our prior article here).  This Medicare Proposed Rule would require hospitals and ambulatory surgery centers (ASCs) to post the rates that they have contracted with healthcare insurance companies.

 

WHY HASN’T THIS HAPPENED BEFORE?

This is in fact fairly revolutionary.  The health insurance lobby, which is a trillion dollar a year gorilla, has effectively prevented this from happening up until now.  The CMS order is a result of the executive order from President Trump titled “Improving Price and Quality Transparency in American Healthcare to Put Patients First”.

 

Insurance companies have claimed in the past that they needed their contracted rates to be secret for several reasons.  They didn’t want their rates known to their competitors, which seems reasonable under most circumstances although in many industries this is public anyways and doesn’t seem to hurt competition.  More importantly, insurance companies claimed that it would allow physicians to somehow collude against them.  In fact, physicians, laboratories and providers in general are prevented from even talking about their contracted with colleagues.  This is ludicrous.  Not only are providers much more fragmented than insurers, which make the possibility of collusion by providers almost laughable, but the insurance companies themselves actually do collude.  Not only is this done in subtle ways like data mining, but they have in fact been caught and punished for collusion and anti-competitive practices on many occasions.

 

The problem has been that they have been so powerful and their lobbying so effective that they have kept a lid on it.  Until now.

 

FIRST STEP OF MANY

Hopefully this is just the crack in the door.  This is a requisite part of the process if there will ever be any transparency for patients and allow them to know and understand how much they will owe as their share of cost for healthcare services provided.  As we have articulated in past articles, the long-term need is for patients to know PROSPECTIVELY exactly how much they will owe for the healthcare services they will receive.  The first step in this process is to be able to know the negotiated rates that different providers have for their insurance and that the provider be able (and willing) to discuss and show this to the patient.

 

This will prevent a great deal of the massive amount of bankruptcies that are hitting Americans who get surprised by how much they end up owing.

About Apache Health

Apache Health is a revenue cycle management (RCM) analytics, benchmarking, and auditing company. The founders of Apache formerly ran a large RCM company that was acquired by a private equity group in a rollup. Apache’s predictive analytics will benchmark billing performance and project exactly how much more revenue you should earn from your existing volume of patients.  Using many factors and a blend of artificial intelligence and specialty specific benchmarks, the model projects whether changing the billing process would improve collections for your particular mix of procedures and payers. Apache Health can help you evaluate whether to outsource the billing, determine which billing company to select to maximize performance, or track in-house billing performance improvement over time. For more information contact:

Sean McSweeney

Apache Health

www.apachehealth.com

888-422-5514