Price Transparency Slowdown May Aid Strategic Response

Delays are hitting some aspects of the federal price transparency agenda — the complex web of laws, rules and regulations targeting insurers, providers and pharmacy stakeholders, among others. But policy experts say it’s not time to sit back and wait. That’s what a panel of payer- and provider-focused insiders from the Advisory Board recommended during a Dec. 1 webinar covering federal transparency requirements for the health care sector. The webinar, “The price transparency trifecta: Examining policy and strategy in a (potentially) transparent marketplace,” assessed the impact on three key areas that have boiled to the fore in recent months: payer transparency rules, provider transparency rules and surprise billing regulations. Among the delays under discussion was the Biden administration’s decision to postpone the mandate for insurers and pharmacy groups to deliver drug-price disclosures and machine-readable files of other pricing data for six months, or until July 2022. Instead of waiting for the enforcement date for the payer transparency regulations, the Advisory Board experts argue that the time is ripe to craft a formidable data-sharing strategy and, because some of the regulations are still in formation, to voice comments with rulemaking bodies. After all, pieces of the vast price transparency effort remain unsettled. And additional ramp-up time can only serve as a benefit. “The delays are helpful,” said Natalie Trebes, director of health plan research with the Advisory Board, during the webinar. Trebes called some aspects of the price transparency efforts, such as the requirement to provide patients with advanced explanations of benefits, “enormously complicated” and said they are going to demand a cohesive approach to get them right. Another chief component that falls under the six-month reprieve is the requirement that insurers share negotiated rates, or, as the Advisory Board describes it, the “public, structured, organization-specific payment rate for providers and prescription drugs data.” The hiatus may help, but it doesn’t erase the mandate. “I don’t read this as CMS pulling back,” said Heather Bell, a senior consultant who leads the Advisory Board’s health policy research. Instead, it means “the industry has more time to weigh in…to work with CMS.” In fact, given cues from the administration, such as the Aug. 20 frequently asked questions (FAQ) outlining the delays, federal regulators appear to be showing “more rigor” and “commitment” to the ongoing efforts, said Ben Umansky, expert partner with Advisory Board who moderated the panel session. The prospect of putting negotiated rates into the public realm is perhaps the most seismic dynamic among the federal government’s push toward price transparency, according to the Advisory Board panel. Rule’s Impact Is Still Uncertain It remains to be seen what the “magnitude of the market impact” will be when insurers are forced to air negotiated rates in full view of competitors and providers, said Lauren Robinson, senior research analyst with the Advisory Board. “Is it going to change the balance of power?” she asked. While the sharing of negotiated rates may be one of the more divisive issues in the wider transparency effort, Trebes noted that some parts of the process are unlikely to change. “All of the usual factors in negotiations still come into play here,” she said, citing factors such as quality of care, pedigree and brand recognition. “There is an entire industry around payer-provider negotiations that is not going to disappear overnight,” Trebes added. Not all stakeholders are in the same wait-and-prepare mode as health plans and pharmacy groups. Hospitals are subject to price transparency regulations that went into effect at the beginning of 2021, though multiple reports have indicated they have been slow to comply. In a final rule released Nov. 2, CMS increased the civil monetary penalties for hospitals that fail to provide public pricing data to patients. Starting Jan. 1, the penalties rise to a maximum of $5,500 per day for large hospitals that fail to meet transparency standards. That translates to a maximum of more than $2 million in penalties per year. The federal government’s focus on price transparency, which now spans presidential administrations, has become a multiyear effort that encompasses pieces of the No Surprises Act, the Consolidated Appropriations Act of 2020 and a diverse array of federal rules stretching back to 2019. Plans Can Shape Discourse Around Rule While CMS has closed the comment periods on parts one and two of the surprise billing interim final rules, as well as the “transparency in coverage” rule that was announced in October 2020, the “prescription drug and health care spending” interim final rule, which was released Nov. 17, 2021, remains open to feedback. That rule requires that plans in group and individual markets report numerous data points, such as total health care spending by setting, and a spate of prescription drug cost information, to the federal government. The comment period remains open until Jan. 24, 2022. The additional time afforded to health plans to comply with the transparency in coverage rule also provides a window to shape public discourse, Trebes noted. Health plans now have time to consider what other data points or pieces of information, such as quality results or additional cost data, they can publicly share as a way to burnish their image as they seek to “get ahead of that narrative,” she said. How insurers respond in the coming months will go a long way toward determining the market reactions. “It’s still a very malleable space,” Umansky said. Ultimately, Trebes said, the open data landscape begs the question, “How do you want to tell your story?” by Richard Scott

Price Transparency Slowdown May Aid Strategic Response

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