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Almost One-Third of Hospitals Not Compliant
with Price Transparency Requirements

According to Guidehouse, a consulting services firm, 30 percent of hospitals analyzed across 27 states are not compliant with either of the two price transparency rules required by the Centers for Medicare & Medicaid Services (CMS).

The price transparency rules became effective January 1, and U.S. hospitals are required to disclose their pricing with payers two different ways:

  1. Comprehensive machine-readable file – This consists of a single file that contains five types of standard charges for all the items and services provided by the hospital. Acceptable formats include .XML, .JSON, and .CSV formats. The five standard charges include:
    1. Gross charges
    2. Payer-specific negotiated charges
    3. Discounted cash price
    4. De-identified minimum negotiated rates
    5. De-identified maximum negotiated rates
  1. Consumer-friendly shoppable services file – This consists of a set of at least 300 shoppable services, which includes 70 CMS-specified services and 230 hospital-selected services. Hospitals can opt to use a patient price estimator tool to fulfill this requirement.

What Guidehouse Found

More than 1,000 hospitals were recently analyzed across 27 states by Guidehouse. Overall, about 70 percent of the hospitals were compliant with at least one of the two files, while the other 30 percent of providers were not compliant with either. According to Guidehouse, non-compliant hospitals have expressed “they either have significant resource constraints to meet these requirements (COVID-19 or otherwise) or have a lack of understanding of the ruling.”

Guidehouse analysis also found that:

  • 60 percent of hospitals that were analyzed were compliant with the consumer-friendly shoppable services file, while 40 percent were not.
  • 48 percent of hospitals were compliant with the machine-readable file, while 52 percent were not.
  • Larger hospitals and health systems were most likely to be compliant and were often using existing tools to comply with the shoppable services portion of the law.
  • The machine-readable files that do exist are inconsistent in terms of format and content, which often requires significant data transformation and enhancements necessary to make the data usable to consumers and researchers.

By the way, non-compliant hospitals would be penalized $300 per day and face withholding of Medicare payments if they are not in compliance with the CMS.

Des Moines Hospitals – MercyOne and UnityPoint Health

As mentioned in my January blog, two Des Moines hospitals – MercyOne and UnityPoint Health – did not comply with the machine-readable file requirements, and, according to a more recent review, non-compliance continues. However, both hospitals do offer a personalized cost-estimator online tool. To what extent these tools comply with the CMS requirements is unknown at this writing.

I did attempt to perform a personalized cost-estimation on the MercyOne website, but when I was prompted to select a Blue Cross plan in a drop-down box, I could not find an option similar to my plan – Wellmark (BC/BS) PPO – the largest health plan offered within Iowa. Other BC/BS plans were offered as alternatives, but none would fit my requirements – a confusing process.

As for UnityPoint Health, I provided my Wellmark identification and group number, but was booted out of the cost-estimator page and suggested that I call a phone number for further assistance. Both Mercy One and UnityPoint, in my estimation, are successfuly making it difficult for the public to gain access to their coveted negotiated prices with commerical payers. But this is no different than what is happening around the country.

Why Does this Matter?

Most Iowans are covered by employer-based health coverage, and 150 million Americans have coverage through employers. Because of this, employers are forced to find new ways to ensure they are receiving the best prices for their employees’ health coverage. Currently, the gold standard of hospital prices is what Medicare pays hospitals. It is extremely difficult, however, for employers to learn how much they (or their selected insurance companies) are paying hospitals when compared to Medicare reimbursement prices.

In the past, employers were assured by insurers that hospital prices were ‘discounted’ by a handsome amount. But this approach can be rather disingenuous. Negotiated ‘discounts’ off grossly-elevated chargemaster prices do not help employers keep costs affordable. Instead, employers now see the need to negotiate prices UP from the publicly-known Medicare prices, rather than DOWN from the irrelevant chargemaster prices that nobody pays.

Summary

In short, the compliance with price transparency requirements appear to be comparable to a ‘cat and mouse’ game between some hospitals and the enforcement efforts of CMS. Yes, healthcare pricing is both complicated and secretive, but this is by design. It is quite apparent that hospitals have little desire to reveal their negotiated prices with the public. This subject matter will continue to evolve over time and will be included in future blogs as more information becomes available.

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New Kaiser Survey on Employer Health Coverage Released

National Study on Employer Health CoverageNearly every September for the past two decades, I have released our survey findings from the Iowa Employer Benefits Study and, during that same month, would eagerly await the results from the annual Kaiser Family Foundation Employer Health Benefits Survey. The Kaiser findings put a complementary national perspective to our Iowa results.

Unfortunately, due to the Covid-19 pandemic, I pumped the brakes on surveying Iowa employers for this year. Kaiser, however, did pursue their national survey and it was released a little later than usual – on October 8.  The results provide an important glimpse into what is happening to employer-sponsored health insurance around the U.S.  Overall, Kaiser surveyed 1,765 non-federal public and private organizations with three or more employees, and from this number, 540 employers were located in 12 Midwestern states (an average of 45 employers per state). The Kaiser study, I must mention, does not break out the results by each state, only by region.

Key Findings by Kaiser

The Kaiser survey is very helpful because it documents national health trends for employer-sponsored plans. Some of the key findings in 2020 include the following:

  • About 56 percent of employers offer health benefits, a percentage that remains unchanged over the past five years. Similar to Iowa, the larger the employer, the more likely health benefits are offered. About half (53 percent) of U.S. organizations with fewer than 50 employees offer health coverage, and nearly all (99 percent) of the organizations surveyed by Kaiser with at least 200 employees offer health coverage.
  • The average single and family premiums increased by four percent over the past year, while worker’s wages increased by 3.4 percent and inflation increased by 2.1 percent.
  • The average annual premium for single health coverage is now $7,470, while the average family health premium is at $21,342. Over the last five years, the family premium has increased over 22 percent, and over the last 10 years, it has increased 55 percent.
  • On average, covered workers contribute 17 percent of the total single coverage premium and 27 percent of the premium for family coverage. In our 2019 Iowa study, we found that covered workers contributed 18.6 percent for single coverage while workers for family coverage contributed 30 percent of the premium.
  • The average single deductible found by Kaiser now stands at $1,644, which is remarkably similar to last year’s $1,655 average. In 2020, 83 percent of covered workers have a deductible in their plan, similar to last year.
  • Most large organizations (81 percent) offer at least one type of wellness or health promotion program. However, among those that offer the coverages, only 11 percent) view the programs as “very effective” at reducing the organization’s health care costs.
  • About 83 percent of surveyed employers who offer health benefits say they are satisfied with the overall choice of providers available through their insurance plans, however, only two-thirds (67 percent) say the same about their mental health and substance abuse networks.

The 2020 Kaiser survey was conducted from January to July, with about half of the interviews conducted before the full extent of the pandemic had been felt by surveyed employers.  Kaiser President and CEO Drew Altman acknowledged, “…our survey shows the burden of health costs on workers remain high, though not getting dramatically worse. Things may look different moving forward as employers grapple with the economic and health upheaval sparked by the pandemic.”

Because of this, next year’s survey will provide a more realistic look at how the pandemic may have impacted employer-sponsored health benefits in the U.S.

To learn more about the Kaiser study, the article was published in the peer-reviewed journal Health Affairs.

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Reflections of a Privileged White Male

This title is redundant. I am privileged because I am white and male.

I usually write about healthcare, employee benefits and insurance issues, but given the racial unrest in our country, I feel compelled to write about a much more complicated and emotional topic.

The senseless killing of George Floyd, another black man while in police custody, has rightfully brought shock and outrage to our country. But with our history of racism, prejudice and social injustice, shock and outrage has never been enough to overcome the inequalities that consistently plague racial minorities.

It is time to be honest with myself, and I implore you to do the same. I am a white male who is protected by our status-quo society, given unwarranted power and prestige at the expense of others. This privilege buffers me from the naked truth of what is happening to non-white citizens. I don’t know what life would be like without having that privilege. Consequently, how can I possibly understand the perspectives and struggles experienced by those without privilege? I simply can’t.  But it is imperative that I begin to try harder.

In 1984, while unknowingly taking a wrong turn on a one-way street in downtown Minneapolis, I was stopped by a police car, sternly directed to step out of my vehicle and place my hands on top of the car. I quickly complied. The officer then forcefully kicked my feet apart and told me that I was driving the wrong way – the interaction felt unnecessarily aggressive.

Despite my privilege – power through wealth, health and opportunity that others are not afforded because of the color of their skin – this simple traffic stop made me feel demeaned. I was humiliated, frightened and incensed about how I was treated. But, unlike George Floyd and too many other people of color, my life was never at risk.

Watching George Floyd’s brazen killing changed everything for me – in a very fundamental way.

Upon reflection, that experience of feeling demeaned 36 years ago makes me realize that privilege is the ability to get angry and see that moment as an isolated incident. That experience lasted 10 minutes…not a lifetime. My societal privileges have shielded me from the reality that people of color are at risk of experiencing much worse every day. I have been complicit by not speaking up about such social injustices.

Dr. Martin Luther King Jr. described this complicity: “A man dies when he refuses to stand up for that which is right. A man dies when he refuses to stand up for justice. A man dies when he refuses to take a stand for that which is true.”

I have not stood up as I should have.

It is said that any society, any nation, is judged on the basis of how it treats its vulnerable members. Dignity should not be discretionary and should be afforded to all people.

So how can we as Americans move forward from this history of systemic racism? I don’t have the answer. However, I do know for real change to happen, it must begin with a confession from me, and from each white American who comfortably accepts the privileges enjoyed. Merely believing you are ‘not racist’ is not enough. We must learn how to be anti-racist in our core beliefs and practices.

I am responsible for educating myself and can no longer remain silent. I must not tolerate ignorant or intentionally harmful actions or words aimed at people of color. Listening and learning are the first steps in the very long and critically important journey ahead. Voting is a necessity – insisting on policy and political reform to eradicate social injustices. We, as a society, must step up.

I do not write this because I am more enlightened than others. But change must start with me – and each of us, individually.  I must recognize that my societal privileges have been at the expense of those who are without. I can certainly do better. Our country can do much better – and together, we must.

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