By Will Holding and Rafiq Ahmed
February 22, 2023
With recent legislation, price transparency has become a buzzword in our space. What does it mean for the industry, for patients, providers, and payers?
We sat down with Rafiq Ahmed, co-founder of Serif Health, to discuss price transparency, how it’s affecting the market, and how it might change the healthcare landscape.
In January 2021, The Hospital Price Transparency rule went into effect. With that, hospitals were required to offer price estimator tools and disclose certain pricing information on their websites, including charges and contracted “allowable” rates with insurers for certain services. Then in July 2022, The Transparency in Coverage rules went into effect. With that, insurance companies had to release data files, similar to the hospitals’ files. Both rulings were intended by CMS to help consumers understand the cost of a covered item or service before receiving care.
What’s happened since rules went into effect?
For many reasons, many hospitals did not immediately comply when the rule went into effect. However, by mid-2022, hospital compliance took a big jump, with 75% of hospitals posting some form of pricing data on their websites.
As for insurance companies, many of them complied immediately and continue to do so. However, they are releasing large, machine-readable files for all of their in-network providers (read: no patient or lay person can parse). Only developers can process these files to extract the data. Companies like Serif started to process this data to help make market pricing more accessible, creating a more efficient contracting process for payers and providers.
What might happen as rules play out?*
The data will allow for much more transparency into trends, but the specific trends and rate of change is anyone’s guess. Rafiq said, “We were really excited for the potential transformational impact of price transparency legislation. If data was out in the open, pricing could become more standardized, instantaneous, easier. Then you would see more of a performance-based contracting market. Where over time, if you’re a good provider, you can start to get better rates. And if you’re not performing in terms of clinical impact or patient satisfaction, then your rates would be much more standardized.”
More specifically, Rafiq’s got a handful of predictions.
Who may be impacted?*
The End Goal
From a CMS perspective, the goal was increased visibility for consumers, so they might know the cost for services before receiving these services. For Serif, the goal is efficiency, for the sake of a more equitable healthcare environment. And for Compass, the goal is to increase visibility so more patients can receive the high-quality, low-cost care available at ASCs.
The broad impact of price transparency is yet to be seen, though it’s likely all stakeholders will be impacted by these rules.
* All predictions in this article are just that—predictions.
About Serif Health:
About Compass Surgical Partners: