The labyrinth of healthcare costs has long been an area of mystery for patients and even healthcare providers themselves. But the tide is turning, as a new era of transparency legislation provides a roadmap to uncovering and understanding the complexities of payer contracted rates among providers. Healthcare price benchmarking is an invaluable opportunity for RCM leaders to not only gain the knowledge of their competitors’ payer rates, but also align their pricing strategies with market norms while fostering patient trust and loyalty through clearer cost communication.
In this post, we'll break down what the recent transparency requirements mean for your healthcare system, how to access and analyze the vast amounts of valuable payer data now available, and most importantly, how to leverage it to your advantage.
We’ll also highlight the cutting-edge tools and technologies, such as Rivet’s benchmarking tools, that are facilitating this crucial evolution for healthcare organizations.
Benchmarking is the process of comparing your organization's contracted pricing per billable CPT or DRG code to valid external data sources that reflect other providers in your area. A revenue cycle management team can leverage this data as a powerful tool to identify areas for improvement for their own contracted payer rates. It allows you to assess how competitive your pricing strategies are compared to market rates, model scenarios on how to improve and negotiate with payers over contracts to adjust accordingly.
Accessing and utilizing the information revealed through this legislation is where the rubber meets the road. The resulting metrics represent an unprecedented opportunity to benchmark your organization’s payer rates and billing practices against competitors and market averages.
The Transparency in Coverage (TiC) federal legislation has stirred up a whirlwind across health systems. It mandated that as of July 1, 2022, group health plans and individual health insurance policies must publicly disclose their pricing information. The goal is to empower consumers with the knowledge to make informed healthcare decisions and to foster competition that can help drive down healthcare costs.
In order to comply with this legislation, insurance companies must disclose their pricing information that exists within each payer contract, with all providers. This is an extremely large amount of pricing information. This includes the negotiated rates for in-network and out-of-network providers, as well as historical payments to these providers. Additionally, payers are required to make cost-sharing information available through an online self-service tool.
It's important to note that while this federal legislation sets a baseline for transparency requirements, states may have additional and more stringent regulations in place. It's crucial to stay informed and compliant with all relevant legislation.
With the floodgates of pricing information opening, healthcare RCM leaders need the right tools and strategies in place to effectively access and analyze this data. For most organizations, deciphering the machine-readable files can seem like a task straight out of a healthcare version of “National Treasure.” These massive machine-readable files are available on each payer's websites, though not entirely easy to find.
CMS recommends to search the internet using the following key words associated with the required disclosures, including (but not limited to):
“machine readable files”
“transparency in coverage”
“in- network rates”
“out-of-network allowed amounts”
The name of the plan or its issuer
Analyzing these massive files can be difficult, especially when you'd like information to compare your organization's negotiated rates with those of other payers in the market. This can help identify areas where your rates may be higher or lower than average and inform pricing strategies accordingly.
While some organizations may attempt to manually collect and analyze this data themselves, diving in without a solid methodology quickly becomes overwhelming and time-consuming. That's where benchmarking platforms like Rivet come in, providing a comprehensive and user-friendly solution to access and analyze payer rate data. These platforms use advanced technology to collect and standardize the data, making it easier for organizations to identify patterns and insights.
With actual contracted rates of your competitors now published in machine readable files and available to you, benchmarking will become a powerful instrument in your strategic RCM toolkit. It allows you to compare your payer rates and billing practices with those of providers in your geographic area, your peers, as well as industry leaders.
With such a massive amount of data to process, an organization needs a tool they can count on like Rivet to parse and organize the data so it is accessible, usable and current. The use of Rivet's comparative analysis tool informs pricing negotiations, revenue cycle management strategies, and even service line planning.
Armed with the knowledge of your competitive position using Rivet, you can enter payer negotiations from a position of strength. Clarity on how your rates compare to others provides you with leverage, and the verifiable data to back it up can lead to more favorable contracts.
When you go to negotiate a contract and the insurance payer tells you that you are "being paid the highest in your area" you now have the undeniable proof if you are, in fact, not the highest. You'll know where you fall against competitors on your critical codes so you can negotiate with proof from their own machine-readable file.
But benchmarking isn't just about staying abreast of the competition’s rates; it’s also about strategic adaptation. The actionable insights you derive from benchmarking your payer rates and billing practices allow you to ensure not only that you’re staying competitive.
Transparency in healthcare is quickly becoming the new normal. Organizations that adapt quickly and use this as an opportunity to improve their practices are the ones that will lead the way in the post-transparency marketplace.
The wave of change brought about by healthcare pricing transparency is monumental, offering both challenges and unprecedented opportunities. By harnessing the power of benchmarking, healthcare organizations can ensure they set sail on the right course, towards a future where the cost of care is clear, competition is healthy, and quality of care remains high.
The tools and strategies you employ today will not only shape your response to the current regulatory landscape but also dictate your success in a rapidly evolving healthcare market. With Rivet’s benchmarking tool, you can turn the chaos of change into the clarity of competitive advantage. Engage with Rivethealth.com today to usher your organization into a new era of healthcare pricing excellence.
Healthcare price benchmarking is transforming how healthcare organizations approach pricing strategies and contract negotiations. Leveraging payer price transparency data can provide the following strategic benefits:
Improved Contract Negotiations
With clear insights into competitors’ payer rates, healthcare providers can negotiate from a position of strength. Benchmarking allows providers to demonstrate exactly where their rates stand in relation to competitors, empowering them to secure better contracts with payers and optimize reimbursement.
Enhanced Cost Savings
By identifying areas where payer rates are higher than market averages, organizations can address cost of care inefficiencies and streamline pricing structures. This enables healthcare systems to achieve substantial cost savings without compromising quality of care.
Transparency for Improved Patient Trust
Price transparency initiatives provide patients with insights into the cost of healthcare services, promoting trust. Patients who understand their financial responsibilities are more likely to choose healthcare providers who offer clear pricing, leading to greater patient satisfaction and loyalty.
Data-Driven Decision Making
With access to comprehensive payer rate data, organizations can make data-driven decisions regarding budget allocations, service offerings, and revenue cycle management strategies. These decisions, grounded in accurate pricing data, enhance the financial health of the organization.
Competitive Positioning in the Healthcare Market
Access to transparency data enables healthcare organizations to track their performance relative to competitors. Staying competitive on pricing attracts more patients and positions the organization as a trusted provider within the healthcare system.
Through effective price benchmarking, healthcare organizations can navigate the evolving landscape of healthcare costs with confidence and clarity.
Rivet is at the forefront of this revolution, pioneering tools that redefine the benchmarking landscape to allow for better, more transparent pricing knowledge and contract strategies. Its state-of-the-art software platform enables healthcare providers to assess, measure, and achieve performance improvement.
By tailoring its benchmarking tools to the unique needs of healthcare organizations, Rivet provides an edge in deciphering the complexities of healthcare pricing data. Whether you’re a hospital CEO, a billing manager, or a director of revenue, Rivet's platform offers the granularity and sophistication to benchmark with precision.
Learn more about Rivet’s contact management tools or schedule a demo to discover more.
1. What is healthcare price benchmarking?
Healthcare price benchmarking is the process of comparing an organization’s payer rates and billing practices with those of other healthcare providers to assess competitiveness and optimize pricing strategies.
2. Why is price transparency important in healthcare?
Price transparency helps patients understand their financial responsibilities and fosters competition among providers. For healthcare organizations, it provides insights into reimbursement rates and improves contract negotiations.
3. How can healthcare providers use payer transparency data?
Healthcare providers can use payer transparency data to compare their negotiated rates with those of competitors, identify cost-saving opportunities, and negotiate better contracts with payers based on real-world benchmarking insights.
4. What are the benefits of benchmarking in healthcare?
Benchmarking provides insights into competitive pricing, helps in contract management, improves revenue cycle performance, and positions an organization as a leader in transparent healthcare pricing. It also supports financial health by identifying areas for cost savings.
5. How does Rivet’s benchmarking tool assist healthcare organizations?
Rivet’s benchmarking tool simplifies the process of analyzing payer rate data and comparing rates across providers. It enables healthcare providers to make informed decisions about pricing and improve contract negotiations by leveraging real-time transparency data.
6. How can benchmarking data influence contract negotiations?
By showing how rates compare to market averages, benchmarking data provides leverage in contract negotiations, helping providers advocate for fair reimbursement and better terms with insurance payers.
7. What information is included in transparency data disclosures?
Transparency data includes negotiated rates for in-network and out-of-network providers, historical payment amounts, and cost-sharing information. This data helps healthcare organizations benchmark their rates and identify pricing disparities.
8. How often should healthcare organizations review benchmarking data?
Regularly reviewing benchmarking data—at least quarterly—helps healthcare providers stay competitive and adjust their pricing strategies based on market trends and payer performance.
9. How does healthcare price benchmarking support patient care?
By using benchmarking data to optimize pricing strategies, providers can allocate resources efficiently and focus on maintaining high-quality patient care without compromising financial performance.
10. What challenges do organizations face when accessing payer transparency data?
Challenges include locating relevant data on payer websites, analyzing large machine-readable files, and interpreting complex reimbursement rates. Tools like Rivet’s platform simplify data access and analysis.
