Don’t Cross the Streams When the NSA and Price Transparency Collide

Don’t Cross the Streams! When the NSA and Price Transparency Collide

What happens when the streams cross? 

One of the most memorable lines from the 1984 comedy film Ghostbusters was when Harold Ramis’s character, Egon Spengler, warns ominously of the team’s proton pack weapons: “Don’t cross the streams!” My colleagues and I have written many articles about hospital price transparency, and many more about the No Surprises Act (NSA). But what happens when those two streams cross? That’s a topic we haven’t discussed – until now.    

One element of the NSA is that when a healthcare organization believes it is being under-compensated by an insurance company, there is an independent dispute resolution (IDR) process to determine whether the qualified payment amount (QPA) offered by the insurance company is fair. Much of the NSA litigation brought by the Texas Medical Association, which has frequently prevailed, involves the question of whether the arbitrator should give extra weight to the insurance company’s data. Fortunately, and wisely, the courts have said no.

But this is where the stream-crossing can become a big deal. Under the price transparency regulations, hospitals are required to make available, in a machine-readable format, all of their contractually agreed rates for every private payor. This treasure trove of data creates a new mechanism to determine fair reimbursement, also allowing patients and their families to better determine norms.

Quite candidly, I have no absolutely no clue what insights that data will yield; whether it will help health insurers or hospitals more is well beyond my pay grade. But I know this: the existence of that pool of data is likely to revolutionize the IDR process.

Anyone with the ability to analyze the myriad of machine-readable data from hospitals across the country will have the ability to make arguments about the reasonableness of a hospital’s charges. Most hospitals seem concerned about the data, but I would posit that only half should be.

If you are above the median, it is true that you will face pressure to lower your fees. But if you are below the median, you will have new leverage in contract negotiations. I was never a Prairie Home Companion listener, but I know that in Lake Wobegon, “all the children were above average.”

I suspect that such overconfidence is common and that many hospitals believe (or at least hope) that they skillfully negotiated “above-average” contracts and fear that the data will show it. The reality, of course, is that by definition, only 50 percent are above the median.     

I do worry that large insurers, which are used to working with and manipulating data, will have an advantage when it comes to using the data. Hopefully, a resourceful consulting company with a predisposition toward helping healthcare organizations will step in as a counterweight. 

One other NSA point. A client recently mentioned that a third-party administrator (TPA) moved to have an IDR claim dismissed, arguing that the plan, rather than the TPA, should have been served with the action. The American Hospital Association (AHA) has noted that the regulatory framework about this is less clear than it should be; but wow, it takes chutzpah for a TPA that appears as the contact on insurance cards to say “You should send your claims to us, but not your IDR notices.” I assume their motion will fail, but I will let you know.

If you’re feeling like you don’t have a good understanding of the hospital price transparency regulations, or you have other questions about healthcare pricing in general, I’ve got good news for you. Fredrikson’s free monthly health law webinar for November was about pricing. While the live broadcast is over, it’s recorded, so you can listen for free at any time. Register here.

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