We’ve only had payer price transparency data available for a little over one year, and in that relatively short time frame, we’ve been on quite the narrative journey.

Payer MRFs were celebrated due to their quickness to come online after the 7/1/22 deadline, compared to the lag in some hospital MRFs. They were criticized for being too large to download and/or parse shortly thereafter. They were maligned for including unnecessary rates that caused massive bloat. And now, it seems they are being touted as a reason to ignore hospital MRFs altogether.

It won’t take you long to find an article or blog featuring a payer MRF and a hospital MRF in a saloon, with the payer MRF saying, “This town ain’t big enough for the both of us.” We envision this conversation occurring with all parties wearing Crocs with spurs. BRB, submitting that script to a reality TV series.

As it turns out, the town is in fact big enough, and it benefits from both hospital and payer data. How so? Let’s find out.

Price transparency matters for volume and cost

Hospital encounters typically make up a smaller overall % of total patient care volume, but it’s overly simplistic to boil price transparency down to any one statistic. Given the complexity of the revenue cycle and Managed Care negotiations, a narrow, singular data point view of price transparency misses broader landscape implications.

In this specific instance, for example, volume is not the only factor for consideration in price transparency legislation. The original Hospital Final Rule was about price transparency for the sake of lowering the cost of care.

This is crucial because what hospital claims lack in volume they certainly make up for in cost – to the tune of over 37% of total personal healthcare expenditures.

It’s certainly true that the number of double lung transplants, which occur in hospital settings, is significantly smaller than the number of routine blood draws, which may occur in non-hospital labs or clinics. However, the cost of blood draws pales compared to such clinically complex and resource-intensive procedures. Lowering the cost of care delivered in hospital settings has ramifications across all other sites of service.

Both MRFs contain unique fields

The two Final Rules with MRF requirements are not carbon copies of each other, and as a result, both payer and hospital MRFs bring something different to the table.

Payer files have more sites of care (think ASCs, imaging centers, etc.) and more rate types like professional rates for practices and individual physicians. But even if a payer posted a 100% complete machine-readable file, that MRF would still be missing elements that can only be found in a hospital MRF.

Hospital files contain list prices from chargemasters, cash prices for self-pay patients, and non-commercial rates, including Medicare Advantage and Managed Medicaid rates. Cash prices are particularly crucial when uninsured patients are planning for their care in advance, such as when a patient is preparing to deliver a baby or schedule an MRI.

Furthermore, elements of the hospital MRFs can add context and give meaning to the payer MRFs. For instance, it’s common for payers to report rate structures as a percent of billed charges. Within their MRF, payers might report a rate as “75% of list price,” but without the corresponding list price from the hospital, there is no price to apply that 75% to determine the actual contracted rate.

What's in payer data that is not included hospital data?

Cross-checking hospital and payer data = increased accountability and accuracy

Neither hospital nor payer price transparency data were greeted with significant trust from any industry stakeholder, and that sentiment was warranted.

Initial files were slow to come online, messy, incomplete, bloated, or non-existent. As we continue to move away from the first iteration of files, there’s a level of accountability that comes from being able to cross-check rates from different data sources. Whether you are a data vendor, patient, hospital, or payer, it behooves you to be able to confirm rate accuracy across data files.

The ability to fact-check rates and confirm the same rate exists in two MRFs created by two different entities increases trust and peace of mind. We frequently re-examine and visualize price variance by geography to demonstrate that combining hospital and payer data creates a trustworthy feedback loop on data veracity.

Accessing data from hospital files can be a more efficient solution

Payer MRFs must include rates for all sites of service, including non-hospital entities. As a result, their files are significantly larger and require additional parsing before they are usable.

Hospital files, built solely on the hospital’s CDM, have a much lower barrier to entry as a result. Not every stakeholder interested in price transparency needs non-hospital rate data, and when that’s the case, why not pull data from a cleaner, smaller, and equally accurate data source? It’s like going to Costco when you only need a few bananas. Sure, you could go to a busy warehouse and come home with a three-pound bunch. Or, you could go to the grocery store up the street and leave with exactly two bananas and an hour saved.

Go ahead and buy stock in hospital data

Hospital data is here to stay, and with the CMS 2024 OPPS Proposed Rule currently open for comments, it’s looking like it will  improve in the coming months. A world where only payer data exists would stall the progress we are making to eliminate the financial complexity of healthcare. All stakeholders must be responsible for their own transparent practices, including publicly-available MRFs, for us to move ahead in using foundational MRF data to create patient-facing estimate tools and ensure the negotiation of fair market rates.

Curious to compare hospital and payer data? Reach out at info@turquoise.health.