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Leveraging Price Transparency Data for Provider Organizations

Updated: Jan 18

Author: Maria Nikol, MJ

Following July 1, 2022, most group health plans and issuers of group or individual health insurance across the country are required to disclose pricing information of negotiated rates for healthcare services between insurer and provider under the new Federal Price Transparency Rule (The Rule). The stated purpose of The Rule is “empowering consumers with the necessary information to make informed health care decisions.”

However, provider organizations, especially those that currently have value-based care arrangements or those looking to engage in value-based care arrangements, can also benefit from price transparency data.

Machine-Readable Files derived from the payers under The Rule reveal the costs for items and services related to in-network rates and allowed amounts. Provider organizations can understand the rates for each specialist in the geographic area, by payer. Insights derived from this data helps to understand how peer organizations are being reimbursed within a provider network; this information will be helpful as provider organizations look to complete fee-for-service contract negotiations. Pricing information can be combined with quality information to identify high-value providers. This information will be instrumental in helping to negotiate fair-market value rates. 

This is especially critical for value-based care (VBC) arrangements. Pricing and quality data can be combined to identify high-value providers and organizations to develop preferred provider networks. As VBC organizations will look to direct patients to high-value facilities, patient engagement will be a critical component. This can feed into value-based benefit design, assisting with the original intent of The Rule: to empower consumers. 

In day-to-day operations, most physician contracts are focused on RVU productivity. However, some physician groups have started to focus on a hybrid model of RVU productivity and collections, especially those that are in private practice. While physicians have control over their RVUs (to some degree), no matter how hard they work to increase their work output, it will be impossible to increase their collections if they are not receiving adequate reimbursement for each procedure. Understanding their collections and negotiated rates helps to align physicians’ and administrations’ incentives. 

The pricing information goes beyond the day-to-day operations use cases. As venture capital firms look at acquire MSOs and IPAs, pricing information can assist in beginning valuation discussions. Is the practice receiving fair market value rates for their services? 

While the pricing data in machine readable files can be extremely helpful as the healthcare system moves from fee-for-service to value-based care, without technology, these files are very difficult to use. Contact Revelar Analytics to learn more about how our solution can help your organization. 



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