Insurers and employers began publicly posting the prices they pay for healthcare services ranging from doctor visits to lab tests, hugely expanding a federally mandated effort to unveil the long-secret rates.

The new data is coming in the form of massive, machine-readable digital files, typically in formats not easily accessible to consumers, posted mostly on insurers’ websites. The Centers for Medicare and Medicaid Services set a deadline of July 1 for the data to be released, with some big insurers releasing data by the early morning hours Friday, including Elevance Health Inc.’s Anthem, Cigna Corp. and Humana Inc., according to Turquoise Health Co., a company compiling the data.

UnitedHealth Group Inc.’s UnitedHealthcare had posted files online by mid-morning Friday, according to a review of their disclosure website. CVS Health Corp.’s Aetna said ahead of the deadline it planned to comply with disclosures on time.

In addition to insurers, employers are required to post prices under the rule, though many of them are expected to outsource the responsibility to insurers and health-plan administrators.

Early review of newly posted information found some disclosures were incomplete, with files that lacked some granular pricing data, said Maximilian Pany, a graduate student and researcher affiliated with the Healthcare Markets and Regulation Lab at Harvard Medical School.


The costs of medical supplies could soon become clearer for patients.
PHOTO: STEVE MARCUS/ASSOCIATED PRESS
The data comes after a tranche of pricing information that hospitals began posting at the start of 2021, under a rule issued under the Trump administration. But compliance by hospitals has been mixed, and their disclosure is limited to the services they provide. Only two have so far been penalized for failing to meet the requirements of the rule, facing fines that initially totaled about $1.1 million between the two hospitals, which had a common owner. A CMS spokeswoman said the agency is “encouraged by the increase in hospital compliance” since last year.

The insurer data, required under a separate federal rule issued in November 2020, is expected to cover much more of the healthcare ecosystem, wrapping in the prices for free-standing surgery centers, clinics, private doctor practices, labs and other types of medical-service providers.

The more expansive data will eventually allow consumers to make more comprehensive decisions, said Adam Geitgey, chief technology officer at Turquoise Health and one of the company’s founders.

The large and complex files are likely too difficult to use for many patients, but newly public prices will become more useful in the marketplace as companies begin adding data to consumer tools, said industry experts.

The files will include the prices that the insurer has negotiated with healthcare providers in its network. The data will also include rates for those that are out-of-network, listing the amounts that the provider billed and what the health plan paid.



“Everything an insurance company pays for, except for pharmaceuticals, will be in these files,” said Stephen Parente, a professor at the University of Minnesota who helped write the insurer rule while working for the White House Council of Economic Advisers during the Trump administration.

CMS has delayed enforcing part of the rule that would have required disclosing a file of prescription drug prices. A CMS spokeswoman said regulators were considering whether that part of the rule remains appropriate, after passage of a subsequent law and “stakeholder concerns.”

The new requirement is limited to commercial plans—those for employers and individual consumers—not government-backed products such as Medicare Advantage. The insurer rule included more specific instructions than the one on hospitals, likely leading to cleaner data, experts said, and it also mandated monthly updates. “It’s more structured and precise,” said Chris Severn, chief executive of Turquoise Health.

The broader data will be valuable to employers seeking to decide which doctors, clinics and other providers to include in their health-plan networks, as well as in selecting which insurers to use in the future, said Elizabeth Mitchell, chief executive of the Purchaser Business Group on Health.

“There is a lot to be learned when the information is finally available,” she said. However, she said her group was disappointed by the lack of data on prescription-drug pricing.

Write to Anna Wilde Mathews at anna.mathews@wsj.com and Melanie Evans at Melanie.Evans@wsj.com

Appeared in the July 2, 2022, print edition as 'Health-Insurance Providers Publish Prices for Medical Care'.

I'm all for transparency; I guess the information has been in the EOBs but no one outside the insurance companies would have been able to collate the data.

I fail to see how this will improve costs, not that I'm saying it won't. I just don't see how.

To me, it's like the insurance companies saying, "This is the different spreads we make and how we run this racket. What you going to do about it?"

I'd expect any large medical provider to make the data as difficult as possible to decode. They don't want customers to be able to compare prices and see large differences in costs at different providers. Ditto for the insurance companies.

If we're lucky, startup companies will appear that will make it easy to compare prices in your area. Sure, there are lots of 'it depends' in healthcare billing, but it can be simplified and compared.

quote:

Originally posted by Rey HRH:
I fail to see how this will improve costs, not that I'm saying it won't. I just don't see how.

Economics works when prices affect decisions. Good value? More sales. Bad value? Stays on the shelves. Companies get the message.

Without data available in advance, about the only things known for certain when buying insurance are premiums and deductibles. Now (or, honestly, eventually) with this data made available up front, the insurer's ability to negotiate prices can be a factor in choosing coverage as well.

When (if?) people start making decisions moving from higher cost options to lower cost options (or being willing to pay more for better options, once they know what better is), then economics will start to take hold.

But it all starts with knowing the data up front.

Imagine a grocery setup that worked like a hospital.

You'd buy shopper-insurance and then go to the store when you're hungry. Your final costs are given to you a few weeks (months?) after you leave and they are computed by taking your shopper-insurance's negotiated prices of what you went home with, and either paying all of the balance (till you meet your grocery-deductible), some of the balance (your grocery-co-pay percentage) or none of the balance (after you've met your grocery-deductible).

As confusing as that is, regarding making choices, imagine further that - like today's health insurance situation - you don't even know what the shopper-insurance's negotiated prices are. How would consumers make decisions on what to buy?

TL: DR More data will help (eventually) by enabling better decision-making by insurance buyers and letting competition drive costs down.

quote:

Originally posted by joel9507:

quote:

Originally posted by Rey HRH:
I fail to see how this will improve costs, not that I'm saying it won't. I just don't see how.

Without data available in advance, about the only thing known for certain were premiums and deductibles. Now (or, honestly, eventually) with this data made available up front, the insurer's ability to negotiate prices can be a factor in choosing coverage as well.

When (if?) people start making decisions moving from higher cost options to lower cost options (or being willing to pay more for better options, once they know what better is), then economics will start to take hold.

But it all starts with knowing the data up front.

I'm not arguing; I'm discussing.

I would guess that most if not the overwhelming number of medical insurance in this country is through employer subsidized plans and, recently, government subsidized ACA plans are also significant.

For the government, as long as they can offer a set of graduated offerings starting with zero premiums and deductibles after the subsidy, they pretty much don't care what the insurance companies charge.

For employers, they also have a set subsidy and as long as they, too, can provide a range of offerings with varying net employee premiums and deductibles that appear to be in line with the market, they also don't really care what the insurance companies charge. They recognize that costs do go up each year.

So, I imagine the data would be the different types of procedures, the providers' invoice amounts, the insurer's "negotiated" costs, and the insured's copayment amounts. The negotiated costs aren't really negotiated; the insurance companies set what amount they'll pay. The only thing I see happening is that the providers' invoice amounts will go up even more so to give the appearance that the insurance companies are adding value.

Ever since I started learning about medical insurance a couple of years ago in advance of my wife going on Medicare, I learned the following:

1) The invoiced amounts from the providers have no connection with what they will receive from the insurance company. Often, the providers don't know what they'll receive. The people who process their billings don't really care how much the providers are paid, their value is knowing the ins and outs of how to get paid and to make sure they get a payment from the insurance. The invoice amounts serves as a moat to protect the racket run by the insurance companies; if anyone wants to not pay the insurance companies, they are liable for the astronomically high invoice amounts.

2) The "negotiated" amount paid by the insurance company has no relationship to the invoiced amount. The amount in total paid by the insurance company is related to the requirements of the law that the insurance companies pay out a certain percentage of premiums received (usually 85%) as payments to providers which are classified as benefits received by consumers for their insurance products. The law allows insurance companies to keep the remaining 15% as gross margin from which they pay their costs and earn profits.

3. But insurance companies do NOT pay out only 85% in benefits; they make sure they pay out 87% in benefits. This is so that the following year, they can increase their premiums to reset to the 85% / 15% ratio which requires increasing their premiums the following year by 2.35%. By taking only 13% this year, the additional 2% they did not take becomes an investment that pays off 118% each following year in perpetuity. Their 13% gross margin this year grows by 18% next year.

Some may say that premiums have gone up more than 2.35% and that's because the insurance companies paid out more than just 87% in benefits in order to increase their future gross margins even more.

Hence, I don't see how the additional information will help make prices competitive. One doctor whom I've followed and learn these things from said that what is needed is a complete overhaul. One point he raises for consideration is to think about car insurance. We only use car insurance benefits if we get into an accident. We don't use our car insurance if we need an oil change or an engine tune up or even a new transmission because the old one is just too old. But every time we see a doctor for a cold, a fever, and everything in between up to major procedures such as cancer treatments or open heart surgery, people are forced to use their medical insurance.

Excited to see this, thanks again President Trump!

It looks like there's hope. Turquoise Health allows you to compare prices for specific medical tasks. If I type in 'lipid panel' for my area, it shows me prices from $8 to $160 near me for the same billing code.

About 15 years ago I called a bunch of local providers and asked how much it would cost to get a basic physical. None would discuss costs at all. Being on a high deductible plan for a while, I tried calling again a year ago and this time a few places gave me insurance contract rate estimates of $600 to $1900 including mandatory bloodwork. As I learn more about billing codes, it may start to be possible to control some costs by looking up what each provider charges.

This message has been edited. Last edited by: bryan11,

Interesting exercise.

I just check an LDL test in my area and the cash cost ranges from $5.52 to $638.19.

Is this not the same testing? Why would it cost more than 100X?

So yes, this is important information to the consumer to make decisions based on their budget and whether they want to use insurance for a simple procedure like this.