The labyrinth of healthcare costs has long been an area of mystery for patients and even healthcare providers themselves. But the tide is turning, as a new era of transparency legislation provides a roadmap to uncovering and understanding the complexities of payer contracted rates among providers. It's an invaluable opportunity for healthcare RCM leaders to not only gain the knowledge of payer rates of their competitors, but also align their pricing strategies with market norms while fostering patient trust and loyalty through clearer cost communication.
In this post, we'll break down what the recent healthcare transparency requirements mean for your organization, how to access and analyze the vast amounts of valuable payer data now available, and most importantly, how to leverage it to your advantage. We’ll also highlight the cutting-edge tools and technologies, such as Rivet’s benchmarking tools, that are facilitating this crucial evolution for healthcare organizations.
The Transparency in Coverage (TiC) federal legislation has stirred up a whirlwind in the healthcare industry. It mandated that as of July 1, 2022, group health plans and individual health insurance policies must publicly disclose their pricing information. The goal is to empower consumers with the knowledge to make informed healthcare decisions and to foster competition that can help drive down healthcare costs.
In order to comply with this legislation, insurance companies must disclose their pricing information that exists within each payer contract, with all providers. This is an extremely large amount of pricing information. This includes the negotiated rates for in-network and out-of-network providers, as well as historical payments to these providers. Additionally, payers are required to make cost-sharing information available through an online self-service tool.
It's important to note that while this federal legislation sets a baseline for transparency requirements, states may have additional and more stringent regulations in place. It's crucial to stay informed and compliant with all relevant legislation.
With the floodgates of pricing information opening, healthcare RCM leaders need the right tools and strategies in place to effectively access and analyze this data. For most organizations, deciphering the machine-readable files can seem like a task straight out of a healthcare version of “National Treasure.” These massive machine-readable files are available on each payer's websites, though not entirely easy to find. CMS recommends to search the internet using the following key words associated with the required disclosures, including (but not limited to) “machine readable files,” “transparency in coverage,” “in- network rates,” and “out-of-network allowed amounts,” along with the plan’s or issuer’s name.
Analyzing these massive files can be difficult, especially when you'd like information to compare your organization's negotiated rates with those of other payers in the market. This can help identify areas where your rates may be higher or lower than average and inform pricing strategies accordingly.
While some organizations may attempt to manually collect and analyze this data themselves, it can quickly become overwhelming and time-consuming. That's where benchmarking platforms like Rivet come in, providing a comprehensive and user-friendly solution to access and analyze payer rate data. These platforms use advanced technology to collect and standardize the data, making it easier for organizations to identify patterns and insights.
Benchmarking is the process of comparing your organization's contracted pricing per billable CPT or DRG code to valid external data sources that reflect other providers in your area. A revenue cycle management team can leverage this data as a powerful tool to identify areas for improvement for their own contracted payer rates. It allows you to assess how competitive your pricing strategies are compared to market rates, model scenarios on how to improve and negotiate with payers over contracts to adjust accordingly.
How to Navigate and Utilize This Data
Accessing and utilizing the information revealed through this legislation is where the rubber meets the road. It’s an unprecedented opportunity to benchmark your organization’s payer rates and billing practices against competitors and market averages.
With actual contracted rates of your competitors now published in machine readable files and available to you, benchmarking will become a powerful instrument in your strategic RCM toolkit. It allows you to compare your payer rates and billing practices with those of providers in your geographic area, your peers, as well as industry leaders. With such a massive amount of data an organization needs a tool they can count on like Rivet to parse and organize the data so it is accessible, usable and current. The use of Rivet's comparative analysis tool informs pricing negotiations, revenue cycle management strategies, and even service line planning.
Armed with the knowledge of your competitive position using Rivet, you can enter payer negotiations from a position of strength. Clarity on how your rates compare to others provides you with leverage, and the verifiable data to back it up can lead to more favorable contracts. When you go to negotiate a contract and the insurance payer tells you that you are "being paid the highest in your area" you now have the undeniable proof if you are, in fact, not the highest. You'll know where you fall against competitors on your critical codes so you can negotiate with proof from their own machine-readable file.
But benchmarking isn't just about staying abreast of the competition’s rates; it’s also about strategic adaptation. The actionable insights you derive from benchmarking your payer rates and billing practices allow you to ensure not only that you’re staying competitive.
Transparency in healthcare is quickly becoming the new normal. Organizations that adapt quickly and use this as an opportunity to improve their practices are the ones that will lead the way in the post-transparency marketplace.
The wave of change brought about by healthcare pricing transparency is monumental, offering both challenges and unprecedented opportunities. By harnessing the power of benchmarking, healthcare organizations can ensure they set sail on the right course, towards a future where costs are clear, competition is healthy, and care is patient-centered.
The tools and strategies you employ today will not only shape your response to the current regulatory landscape but also dictate your success in a rapidly evolving healthcare market. With Rivet’s benchmarking tool, you can turn the chaos of change into the clarity of competitive advantage. Engage with Rivethealth.com today to usher your organization into a new era of healthcare pricing excellence.
Rivet is at the forefront of this revolution, pioneering tools that redefine the benchmarking landscape to allow for better, more transparent pricing knowledge and contract strategies. Its state-of-the-art software platform enables healthcare providers to assess, measure, and improve their performance.
By tailoring its benchmarking tools to the unique needs of healthcare organizations, Rivet provides an edge in deciphering the complexities of healthcare pricing data. Whether you’re a hospital CEO, a billing manager, or a director of revenue, Rivet's platform offers the granularity and sophistication to benchmark with precision.
Learn more about Rivet: https://www.rivethealth.com/payer-performance
