These files are enormous, highly technical and can be easy to misinterpret. In this article, we will break down what these transparency rules actually mean, what is required and why this data can be messy. We’ll discuss how medical billing experts can help you understand this data and how to use comparable data in personal injury litigation and deposition and trial testimony.
Federal regulations now require almost all hospitals in the United States to publicly post their fee schedules online. They typically do this through two deliverables:
These are not just chargemasters. Hospitals must disclose several data points related to pricing for each service.
Each hospital must publish a downloadable file (usually CSV or JSON) that includes the following:
These files must be publicly accessible normally via their website. The files are supposed to be updated at least annually, but not all providers are compliant. Lastly, the machine readable file should clearly be labeled with the date of the last update.
Along with the full list of all charges, hospitals must also publish a more consumer friendly version with at least 300 common services. These items typically contain imaging studies, joint injections, and other predictable, non-emergency procedures.
These tables should include the descriptions in plain English, codes and negotiated rates and cash prices. The idea is that a patient could essentially shop medical procedures across multiple providers before going to the hospital.
The second major update was related to health insurers. This level of price transparency is called Transparency in Coverage (TiC). While hospital rules focus on what providers must post, TiC focuses on health plans and insurers.
Most plans, although there are exceptions, must publicly post three datasets in the form of a machine readable file:
This includes all negotiated rates for all covered items and services with every in-network provider.
This includes historical allowed amounts for out of network providers.
This includes the negotiated rates and in some cases, the net prices for covered drugs.
Similar to price transparency rules, these files must be posted online for public access in a machine readable format (usually JSON given the size of the files).
Alongside the machine readable files, the insurers must provide member facing cost estimator tools that allow plan participants to type in a specific service and see their out of pocket costs based on their remaining deductible, co-pays and co-insurance.
For any given CPT or HCPCS code, in a specific geographic region, TiC files can potentially tell us the full range of negotiated rates across multiple payers. It also provides clarity in the amount that would typically be reimbursed to a medical provider for the given procedure and health insurance carrier. This sounds powerful, and it is, but only if you can get the data and have a qualified medical billing expert witness who can interpret the data correctly.
When these rules went into place, the intent was clear, provide patients with transparency so that they could avoid surprise bills. They could encourage competition and give third parties more tools to evaluate network value while supporting further research regarding healthcare costs and pricing patterns.
In personal injury claims, this transparency can provide clear insight on actual charges at similar medical providers so that attorneys, judges and jurors could have a better understanding of a reasonable medical charge.
However, the reality is that these price transparency tools are not easy to navigate. In fact, some of these files are massive and exceed several gigabytes in size. A single insurer may post thousands of separate machine readable files. Many of the files are in JSON which means that you cannot simply open the data and explore within Excel.
Even if you are able to extract the data, you may face other challenges related to the data. Different hospitals and payers will use different schemas which means you can’t necessarily map out procedures directly. Payment methodologies can vary and may include specific dollar amounts, percentage of charge or even unique formulas for payment. Providers may also have multiple entities which leads to multiple NPIs, TINs and internal system IDs.
In other words, transparency gives you more data points and accessibility to charge and payer rates, but requires the experience of a qualified medical billing expert witness.
In a typical personal injury case, the core economic question around medical bills are: What is the reasonable value of the services rendered to this patient in this market?
Historically, that analysis relied on industry standard databases that collect usual, customary and reasonable charge data along with professional judgement from experts familiar with local pricing. Now with price transparency data, medical billing expert witnesses have more data to analysis and base their analysis.
When handled correctly, transparency data can help provide specific medical providers that are charging within our outside the usual, customary and reasonable range of charges. Medical billing expert witnesses can see if a providers charges compare to local hospitals or ASCs for the same or similar medical procedure.
Medical billing expert witnesses can analyze in-network negotiated rates and allowed amounts across multiple payers to see what commercial payers actually pay for the same service. Instead of providing a single reimbursement rate, experts can present the data in the form of a minimum, maximum and average reimbursement for a specific health insurance carrier.
Some medical billing expert witnesses attempt to bring in the lowest number to show that other providers charge less or that managed care contracts pay less than the full bill charge. However, this over simplifies the complexity of healthcare finance. For example, negotiated rates and Medicare reimbursement rates are typically lower than a providers’ full bill charge rate. That does not mean that negotiated rates and Medicare rates meet the standard for what is usual, customary and reasonable.
These discounted rates are tied to network participation along with benefit design, risk-sharing and network strategy. Medicare rates are commonly tied to government purchasing power, policy and fiscal goals.
Usual, customary and reasonable determination respects the full range of market charges and looks to local market competition and the economic realities of providing medical care. This includes various cost structures (direct and indirect costs) along with risk and uncompensated care.
Transparency providers a richer set of facts to work from, but the medical billing expert witnesses job is to integrate those facts into a full comprehensive case review that leads to a coherent and defensible methodology.
Given all these updates, what does a strong medical billing expert witness bring to your case?
First off, Abacus Analytics medical billing expert witnesses bring technical ability to handle the data. They are able to locate and download the relevant hospital and insurer files. They are familiar working with large datasets and can normalize and match codes and distinguish between the facility and professional components. Without this level of expertise, transparency is just a buzzword, not reliable evidence.
Abacus Analytics provides individuals with a real-world understanding of healthcare finance. They understand and can articulate how hospitals and ASCs set their charges and their various discount structures. They can analyze the differences between charges, allowed amounts and net payments. They explain in laymans terms how Medicare and third party health insurance rates do not establish the usual, customary and reasonable range of charges in a geographic area. This healthcare finance context is what turns raw transparency data into a meaningful usual, customary and reasonable determination rather than an excel sheet of JSON file full of numbers and datapoints.
Lastly, the medical billing expert witness must be able to translate all of this into clear, persuasive testimony. They do this through the form of professional reports by providing insight into their analysis, data sources, and methodology in a way that judges, opposing counsel and jurors can understand. They can handle cross examination when opposing counsel challenges data, methodology and conclusions in deposition and trial testimony.
Price transparency in healthcare finance is here to stay. Hospital and insurers are now required to publish enormous amounts of pricing data. The public now has access to standard charges, discounted cash rates and payer-specific negotiated rates. For personal injury attorneys, it’s important to understand the value and limitations of these price transparency files. By retaining a medical billing expert witness, you can bring in quality data and a qualified expert to explain the reasonableness of past and future medical expenses.
At Abacus Analytics, we live in the intersection of healthcare finance and litigation. We don’t just download files, our medical billing expert witnesses analyze them, contextualize them and stand behind them in deposition and trial testimony. If you have cases with past medical damages, now is the time to develop a strategy around them by presenting qualified medical billing experts that can present evidence of medical charges based on the wealth of data available.
Michael is an avid medical billing expert and team member of Abacus Analytics and focuses on stories and articles in and around the medical billing industry.
Disclaimer: The views and opinions included in this blog post belong to their author and do not necessarily mirror the views and opinions of the company. Our employees are obliged not to make any defamatory clauses, infringe, or authorize infringement of any legal right.
