Tag Archives: Phil Ellenberg

Healthcare price transparency requirements and considerations

In November 2019, the Centers for Medicare and Medicaid Services (CMS) released a final rule establishing requirements for hospitals operating in the United States to establish, update, and make public a list of their standard charges for items and services they provide. The provisions of the final rule go into effect on January 1, 2021.

The lack of price transparency in the U.S. healthcare market is well known. There are several reasons that can make estimating costs before care difficult for consumers. One of the main challenges is the variation in billed charges and negotiated rates between insurance companies and providers. The majority of Americans have health insurance coverage through insurance companies (or payers), which negotiate prices with hospitals and providers. The negotiated prices between payers and providers have historically been confidential and subject to nondisclosure agreements.

Health economists and other experts believe that transparency in pricing is key to healthcare cost containment. Opponents of the policies adopted in the CMS final rule say that these requirements will impose a significant burden on hospitals and may lead to confusion without providing any relevant information.

In this paper, Milliman actuaries and consultants provide a summary of key provisions of the final rule that apply to hospitals, briefly touching on topics that require additional consideration by parties affected by the rule.

ACA risk adjustment transfers will be on EDGE

In 2019, the Centers for Medicare and Medicaid Services (CMS) will begin partially calibrating the HHS-HCC commercial risk adjustment model using actual Patient Protection and Affordable Care Act (ACA) experience from the 2016 EDGE server data submissions. CMS has based the model solely on non-ACA data up to this point.

This article by Milliman’s Zach Davis, Phil Ellenberg, and Brian Sweatman contains four interactive exhibits that allow issuers to review coefficients from the 2019 model. They can also compare how the EDGE data incorporated into the 2019 model will affect risk scores, and the magnitude of the impact on an issuer’s risk adjustment transfer.