Another (Questionable) Approach to Transparency

I sometimes participate on a list serve of attorneys who work in managed care - whether from the provider or payor “side of the table”. An attorney representing a group of specialty physicians recently posted asking how he could get information about the rates insurers paid to other area physicians practicing in the same specialty. His suspicion was that his client's insurance contracts were outdated and their payment rates were significantly below the market.

The various responses urged caution over efforts that might be considered price fixing and other possible infractions.  Tuesday’s news carried a story about Alliance Community Hospital offering $100 to area patients for copies of their EOBs for services at neighboring hospitals. The article, which includes a telephone number for readers to call, says the hospital is gathering information on neighboring hospitals’ rates with specific payors as part of a data base intended to promote transparency for patients.

Although the article cites surrounding hospitals and some insurers as generally supporting the effort, “[a]t least one insurer is raising concerns.” Community Mutual of Ohio, which, several years ago, had a reputation for tough rate protection language in its provider contracts, voiced concern. A representative was quoted as saying:

"'While we support the concept of transparency, this initiative seems problematic. Looking through EOBs from unrelated facilities poses issues of data collection, interpretation and validity.  Moreover, there may be numerous legal issues inherent in such an effort.''

This is going to be an interesting story to watch. Based on what I read, this effort will probably be challenged. I’d be interested in information from anyone more closely connected with the story. 

Link to Akron Beacon Journal Story: Here

Comments

[Robin Fisk]

One reader looked into this issue and e-mailed me the following response:

Here is a response I received from a health care atty in Washington, DC which I agree with. Your thoughts?

“It is possible that the hospital thought providing competing carriers' rates to a carrier might violate Section 1 of the Sherman Antitrust Act, 15 U.S.C. 1. That assumption is incorrect. Although competing carriers cannot agree on the rates that they will pay to providers, there is no antitrust prohibition on a physician (or other provider) providing one or more competing carriers' rate information to a carrier and asking that carrier to increase the reimbursement to a level commensurate with what its competitors are paying. One word of caution, though. If you represent competing providers (e.g., two physicians trained in the same medical specialty providing services in the same geographic area, but who are not part of the same practice group or corporate entity), you cannot include reimbursements received by competing providers in the same spreadsheet if you intend to use that spreadsheet to increase the reimbursement paid by a carrier. Doing so could constitute a violation of Section 1 of the Sherman Act because you could be viewed as facilitating an illegal agreement on price between the competing providers."

(Robin writing again) My knowledge of antitrust law is admittedly rusty, but the hospital's actions bother me.

If the risk presented in his last sentence: including competitors' rates on the same spreadsheet, exists for competing physicians, then why wouldn't it also exist for competing hospitals, assuming similar services and same service area? If Hospital 1 pays for competitive information on the rates Carrier X pays to Hospital 2, then adjusts its rates to Carrier X accordingly, isn't that the same thing, whether or not a spread sheet is used?