Analysis of price transparency data suggests better information on health insurance exchange plans (HIX) is needed.
Payers generally negotiate lower amounts for HIX plans than their commercial group rates and significantly more than their Medicare Advantage (MA) contracts at the same hospital, according to a study published in The American Journal of Managed Care.
Researchers at the University of Southern California (USC) Schaeffer Center compared price transparency data of 25 common inpatient services and 56 common outpatient services across hospital-insurer pairings and found stark differences in allowed amounts.
The 16 insurers in the study with both HIX and commercial group plans paid providers for their HIX enrollees 88.6% of their commercial group rate for inpatient services and 88.9% for outpatient services.
The 19 insurers with both HIX and MA plans paid providers for HIX enrollees 143.3% of their MA enrollees for inpatient services and 243.6% for outpatient services.
The authors attribute the price discrepancy to a few factors such as narrow network plan design and hospitals' willingness to accept lower rates for HIX plans to recoup on bills that may otherwise go unpaid due to the lower income level of HIX enrollees.
"Although hospitals receive lower reimbursement for HIX enrollees than other commercial plan enrollees, the HIX plan payment level is still preferable to the uncompensated care burden hospitals faced before the Affordable Care Act established the HIXs," the report states.
Additionally, the study's findings also back up the rulemaking in the No Surprises Act related to calculating qualifying payment amounts (QPAs) as arbitration for out-of-network payment disputes between insurers and providers. The rule states payers should calculate QPAs separately for individual and group markets, which is supported by the observed differences in negotiated prices between plans.
"The divergence between HIX and non-HIX commercial group plans that we observe in this study suggests that bifurcating the markets when calculating QPA measures is appropriate," the researchers said.
Lastly, the authors note that in the process of collecting the data for the study, a lack of price transparency led to challenges acquiring comprehensive pricing, as well as difficulties analyzing nonstandardized file formats.
A recent report by PatientsRightsAdvocate.org revealed that only 16% of hospitals are complying with the hospital price transparency rule, nearly 20 months after it went into effect.
"More robust hospital price transparency data, made available as legislated, would enable investigators to evaluate longitudinal trends in contracted rates, compare payment generosity across insurers, and assess the association between prices and market competition," the USC researchers said.
Jay Asser is the contributing editor for strategy at HealthLeaders.
KEY TAKEAWAYS
The 16 insurers in the study with both HIX and commercial group plans paid providers for their HIX enrollees 88.6% of their commercial group rate for inpatient services and 88.9% for outpatient services.
The 19 insurers with both HIX and MA plans paid providers for HIX enrollees 143.3% of their MA enrollees for inpatient services and 243.6% for outpatient services.
The price discrepancy was attributed to the HIX plans' narrow networks and hospitals' willingness to accept lower rates for HIX plans to recoup on unpaid bills from less-affluent HIX enrollees.