Analytics Opportunities for Payers from CMS Regulations

Authors: Shobhit Saran, Asst. Vice President - Health Plans, CitiusTech and Aritra Roy - Healthcare Consultant, CitiusTech

Transparency in information has been an ongoing trend in the healthcare industry since late 2020. After the Final Rule against information blocking by healthcare providers, CMS announced two transparency rules for hospitals and health plans. The Price Transparency rule for hospitals has been in effect since January 1, 2021. Many hospitals have been reported as compliant by publicly exposing their negotiated rates with health plans in machine-readable files as mandated by CMS. Post-July 1, 2022, U.S. health plans are mandated to publicly share pricing information as mentioned in the Transparency in Coverage rule.

One of the goals of transparency rules is to have the right information available and in the hands of members/patients at the right time. But, is the current or proposed publicly-available data useful for members? Perhaps not. Members will face immense challenges in understanding and analyzing the terabytes of pricing information that their health plans will update and expose every month. The result will be a poor or unsatisfactory experience.

Having this MRF data publicly available will be internally leveraged by payers, providers, TPAs, policymakers, legal bodies, and other healthcare stakeholders (including aggregators). These entities will invest in decoding and analyzing this data made available by all their competitor providers or health plans to leverage insights for their business goals. This will ultimately benefit the overall healthcare ecosystem by optimizing value-based care partnerships and solutions, improving quality of care, and reducing healthcare costs.

For health plans, how is this information useful? It can be utilized in multiple ways! Several health plans are already building competitive analytics models using these machine-readable files to identify overpaid providers and services. Payers are looking at ways to optimize their network by combining utilization patterns from claims information to re-negotiate with in-network providers or taking steps for network inclusion of out-of-network providers. Integrating quality metrics or provider performance, pricing, and utilization information will leverage data as a “real asset” to enable use cases like steering members to lower-cost providers of similar quality ratings.

Apart from the CMS Transparency in Coverage Rule, payers are also working towards complying with the No Surprises Act mandates. There is a level of uncertainty (and accusations already) about the payer’s initial payment to providers and the calculation of qualified payment amounts (QPA), mainly around the reimbursement and negotiation workflow that this rule has implemented. With transparency in the market now, a lot of publicly-available data can be leveraged to simplify pricing negotiations and network management workflows. Hence, payers are investing in technology and using machine learning models to calculate the most appropriate initial payment for provider’s claims and the best ways to avoid the expenses of going into probable arbitration processes.

The Consolidated Appropriations Act (CAA) includes requirements for the Advanced Explanation of Benefits (AEOBs), ID cards, and provider directory provisions. What can payers gain by enabling all these additional workflows? Again, these can achieve enhanced member experience and satisfaction. While member experience is the core goal, what other benefits can payers attain? These can include monetization and optimization of these additional work streams, leveraging the same for their internal stakeholders by using analytics as the enabler. Analytics can help assessing trend of requesting providers and services for AEOBs, as well as templatizing the AEOB for personalized engagements with OOP cost-saving opportunities

Payers view this as a compliance need and strategic transformation strategy, using data and analytics. By virtue of access to humungous data and publicly-available information, payers can capitalize on transforming themselves to drive value across their enterprise. To be a part of this journey and explore value beyond compliance in the healthcare ecosystem, CitiusTech can provide a set of accelerators, solutions, and thought leadership artifacts to guide organizations and pave their path in this analytics revolution.

Reference Links

Transparency in Coverage Final Rule Fact Sheet (CMS-9915-F) | CMS

CMS delays enforcement of key parts of price transparency rule by 6 months | Fierce Healthcare

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