- Leveraging the data of all-payers claims databases (APCDs) could improve healthcare price transparency for consumers, according to testimony presented at a House Energy and Commerce Committee hearing.
Jamie S. King, a professor at the USC Hastings College of Law, told the committee that APCDs could address price transparency challenges if stakeholders use the millions of claims within APCDs to identify spending trends, develop pricing transparency tools, and create public information hubs about costs.
“Controlling healthcare spending requires engagement from all stakeholders in the healthcare market – patients, providers, payers, and policymakers,” King said.
“Price transparency initiatives, such as all payer claims databases, have great potential to provide critical data to guide healthcare reform efforts, inform analysis on the drivers of healthcare costs, and help patients and providers choose high-value/lower-cost treatment options.”
King stressed to lawmakers that new policies that expand access to APCD data and allow more stakeholders to use APCDs are needed to promote price transparency across healthcare.
Michael Chernew, a professor in the Department of Healthcare Policy at Harvard University, agreed with King. The data contained within an APCD could provide transparency solutions that lower consumers costs, he said.
Chernew suggested that lawmakers should require Employee Retirement Income Security Act (ERISA) compliant health plans to submit data to an APCD. Currently, due to a previous Supreme Court ruling, these plans are not mandated to submit their data. He believes that adding ERISA plan data to APCDs, and using federal funds to expand APCDs, would create more affordable healthcare options for consumers.
“I am generally supportive of transparency initiatives,” Chernew said. “They are important as we move to newer, innovative benefit designs that attempt to help patients shop. They need not be tremendously detailed and may provide broad categories of price and/or quality.”
King advised members of Congress to focus on state-level flexibility and innovation for managing APCD data and creating price transparency programs.
King concurred with Chernew that using ERISA health plan data could provide critical information to payers, researchers, and other stakeholders about care quality and costs. She also suggested that Congress should pass legislation that allows the Department of Labor to partner with APCDs to collect health plan information.
“APCDs have the greatest potential of any price transparency initiative to inform consumers and policymakers in ways that can help control healthcare costs,” King stated.
King advised Congress to implement consumer price shopping initiatives like reference pricing, financial rewards, and tiered networks that incentivize patients to select high value/lower-priced providers. Congress could create reference pricing frameworks for Medicare and pilot referencing pricing initiatives in other public payer programs.
In addition, she suggested that lawmakers should limit anti-tiering and anti-steering provisions in provider contracts in order to connect patients to low-cost providers more effectively.
King also believes that removing trade secret protections in the healthcare industry on a case-by-case basis would improve transparency for consumers.
“Congress should pass a public interest exemption to the Defend Trade Secrets Act of 2016 that clearly establishes that trades secret protections will not apply to information being kept secret in ways that harm the public’s interest,” King said.
“In the case of negotiated healthcare prices, keeping negotiated rates secret from competitors in highly concentrated markets where disclosure might drive costs up might serve the public interest, but keeping those same rates secret from the government, employers who pay them, or consumers would not.”
The testimonies from King and Chernew follow federal initiatives that aim to expand consumer price transparency across the healthcare industry.
The latest effort came from CMS at the start of July 2018, when the agency released a request for information to expand price transparency in Medicare and asked stakeholders to provide potential solutions. CMS believes that enhance transparency will provide more affordable healthcare options for consumers.
Enhancing transparency across the healthcare system through APCDs could be a viable strategy to illuminate healthcare costs, based on success stories on a state-by-state basis.
In Washington, stakeholders used ACPD data to identify $222 million in wasteful spending on healthcare services for a limited number of patients. In Minnesota and Virginia, the claims data within an APCD also helped to identify opportunities to reduce healthcare overutilization.