Podcast Title
Key Price Transparency Use Cases, HFMA 2024, Late Adopters or Sitting Ducks?
Season 1, Episode 3
Overview
In this episode of Payercast, the Payerset team explores how health insurance carriers are proactively reducing reimbursements to hospitals by leveraging price transparency MRF files from other carriers. We dive into the core and most successful use cases for price transparency data and share PT success stories from the 2024 HFMA conference. Tune in to learn more about the evolving landscape of healthcare reimbursement and price transparency.
Featured Topics
Use Cases for Price Transparency Data in Healthcare
The conversation delved into various use cases for health plan price transparency data, particularly focusing on the contractual rates between providers and carriers. Price transparency is increasingly becoming a valuable tool for healthcare organizations and payers alike, as the industry adapts to using this data more strategically. Below are some key takeaways.
Bi-Directional Rate Benchmarking and Negotiation
Key Insight:
One of the most common uses of price transparency data is benchmarking reimbursement rates. Healthcare organizations use this data to understand how their rates compare to similar providers in their area. This allows for more informed negotiations with payers. For instance, a hospital can compare its reimbursement rates by billing code to neighboring facilities with similar demographics, clinicians, and market power, leading to more competitive negotiations.
However, the insurance carriers are also using the data—sometimes in reverse. Hospitals have received letters from large health insurance companies pointing out that the hospital is being reimbursed at a higher rate than competitors and suggesting reductions based on the transparency data. This puts healthcare organizations on the defensive, making it critical for them to be proactive in their use of this information.
Actionable Insight:
Healthcare organizations must adopt a proactive approach to rate negotiation using this data, or risk being caught off-guard when payers leverage it against them. Understanding how payers are using this data can help prevent significant revenue loss.
Market Expansion with Price Transparency Data
Key Insight:
The second significant use case discussed was market expansion. Larger health systems are using transparency data to strategically expand their services beyond their current geographic regions. For example, a hospital in Florida might look to expand into Tennessee, or a multi-specialty practice in one state may seek to acquire a practice in another.
By analyzing publicly available rates, organizations can assess market dynamics and reimbursement rates in regions where they don’t yet have a relationship with insurers. This data provides a foundation for understanding what rates are common and how they can position themselves for market entry.
Actionable Insight:
Market expansion decisions can be more informed and strategic when leveraging this data. Organizations can avoid blindly entering a new market by first gaining visibility into the prevailing rates and reimbursement structures.
Underpayment Analysis and Claim Filling Gaps
Key Insight:
Another emerging use case involves using the data as a backstop for revenue cycle management. Underpayment analysis allows health systems to catch gaps in revenue more quickly by automating the detection of discrepancies between expected payments and actual payments received.
Actionable Insight:
By incorporating price transparency data into their revenue cycle processes, healthcare organizations can improve the speed and accuracy of underpayment detection, enhancing financial performance and reducing the revenue loss associated with claim underpayments.
Case Study: UofL Health—Leading the Way in Price Transparency Utilization
At the HFMA annual conference, UofL Health in Kentucky was highlighted as an example of a health system successfully leveraging price transparency data. They were able to extract and analyze data from a large payer, Anthem Elevance, and used it in their negotiations. As a result, they secured significant reimbursement increases across 20 DRGs (Diagnosis-Related Groups), which is forecasted to improve their EBITDA by 3-4% over the next year.
Key Takeaway:
Proactively adopting price transparency data can yield significant financial benefits, as demonstrated by UofL Health. Other healthcare systems can follow suit by collaborating with cross-functional teams and technology departments to analyze data and use it in negotiations.
Conclusion
The podcast emphasized the importance of price transparency in transforming healthcare organizations’ negotiation strategies, market expansion efforts, and revenue cycle management. Proactive organizations are already using this data to increase revenues and strengthen their negotiation positions. However, those who ignore it risk becoming “sitting ducks” when payers come knocking. Now is the time for healthcare systems to embrace price transparency and use it to their advantage.
Final Thought:
With the rising use of price transparency data across the industry, both proactive adoption and strategic application are essential. Those who prepare now will be better equipped to handle the new dynamics in healthcare pricing and reimbursement.
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