North Carolina Blues Plan Unloads Price Transparency Surprise

Amazing Revelation! Will Coke Cola Recipe Be Next? 

There’s a fascinating story out of North Carolina about that state’s largest insurer unexpectedly publishing information on how much it pays healthcare providers for a wide range of elective, non-emergency services. ……Such payments normally are closely guarded business secrets……………………Providers were not pleased.

By Harris Meyer  | January 13, 2015

There’s a fascinating story out of North Carolina about that state’s largest insurer unexpectedly publishing information on how much it pays healthcare providers for a wide range of elective, non-emergency services.

Providers were not pleased. More surprisingly, consumer advocates were sharply critical. But more such efforts are on the way and providers should stop complaining and get prepared.

Blue Cross and Blue Shield of North Carolina suddenly released its all-inclusive payment rates for services including kidney transplants, knee replacements, coronary bypass procedures, screening colonoscopies and other services. The insurer’s online look-up tool includes all payments for a service, including facility fees, doctor fees and pathology.

The Blues data reportedly showed big variations in payments to different providers. Knee replacements in the Charlotte area ranged from $20,000 to $40,000. The insurer paid Duke University Hospital, Durham, an average of $53,000 more for kidney transplants than it paid Carolinas Medical Center, Charlotte.

Payments for a coronary bypass without cardiac catheterization in the Charlotte and Raleigh areas ranged from $49,000 at UNC Hospitals in Chapel Hill to $79,000 at CMC-Northeast in Concord.

Such payments normally are closely guarded business secrets. But the Blues plan may have felt pressured to release the data because the state Department of Health and Human Services, under a 2013 price transparency law, recently began publishing cost data submitted by hospitals on 100 common inpatient services, 20 surgical procedures, and 20 imaging procedures, including the actual prices paid by Medicare, Medicaid and the state’s top five insurers.

“We are getting consumers literally begging us for this information,” Dr. Susan Weaver, Blue Cross’ chief medical officer, said to reporters last week.

But Lynn Quincey, associate director for health reform policy at Consumers Union, complained that the Blues’ online look-up tool doesn’t explain what the payment numbers mean, where they come from and how they can be used.

The North Carolina data release comes as health policy experts such asKaiser Family Foundation CEO Drew Altman are calling for more focus on driving down healthcare prices as a cost control strategy.

“Greater price transparency would enable consumers facing higher and higher deductibles to make more price-sensitive choices, but price information is very limited,” he wrote in the Wall Street Journal Monday.

A Modern Healthcare article last year reported that “despite the growing clamor for transparency, providers and insurers continue to argue that the prices they charge and pay are business secrets and that publicly disclosing those rates would hurt their bargaining positions and jeopardize their finances.”

Still, providers said they found the Blues data release very interesting; it’s the first time they’ve seen what the insurer pays their competitors. “It’s one of the more comprehensive efforts that we’ve seen and that we’re aware of,” Bob Seehausen, Novant Health’s senior vice president of business development, told Kaiser Health News. In his view, the data release was intended to put pressure on providers at the high end of the price range.

That works both ways, though. Leaders at Carolinas Medical Center said the insurer may find itself facing questions from providers who are receiving payments at the low end of the scale.

Follow Harris Meyer on Twitter: @MHHmeyer

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