Recently three national health plans, Aetna, United Healthcare, and Humana, announced they would contribute claims data to the Health Care Cost Institute (HCCI), a not for profit enterprise supported by Aetna, Humana, Kaiser Permanente, and United Healthcare to promote what they claim will be “independent, nonpartisan research and analysis on the causes of the rise in U.S. health spending.” So HCCI is going to build a database of health care payments based on claims data submitted by health plans. That reminds me of something…oh, yes, INGENIX, the infamous United Health Plan owned database of usual and customary charges that, according to the New York Attorney General, was manipulated by health plans through selective contribution of claims data in order to bilk plan enrollees of hundreds of millions of dollars in benefits. One wonders why health plans might want to send claims data to a plan-supported non-profit enterprise that is collecting PAYMENTS information. Could it be that by selectively submitting claims with lower payments (i.e. deeply discounted contracted payments), the plans could leverage this data in negotiations with providers for deeper discounts, or change legislature and regulator perceptions of the reasonable value of provider services?
According to an article in Law360, David Newman, HCCI’s executive director said that this “database will focus on services that are “truly shoppable,” such as nonemergency surgeries. Policyholders will be able to get detailed information based on their benefits, and even noncustomers will be able to peruse higher-level data that should allow them to find good values on health care services”. He also said: “I think this is going to put pressure on providers.” Christine Chun, the author of the Law360 article, noted that: “the insurers on Wednesday all declined to say whether they expect providers to give ground on prices as a result of the transparency, and they also ducked a question about whether the endeavor might lead more consumers to start viewing provider costs as a key driver of increases in insurance premiums.”
It is pretty clear that the objective of the plans in contributing to this database is not simply to provide transparency in terms of payments made to out-of-network providers and discounts accepted by contracted providers in order to help enrollees shop for less expensive health care services; but to use the database to leverage providers into accepting even lower payments, and to undermine the commercial value of provider services. The thing about a database of contractually discounted payments is that these payments do not reflect any of the value of the considerations that providers obtain from the plans in exchange for the discount (such as an exclusive or preferential referral base or quicker payments). Thus, such a database is likely to significantly under-represent the value of these services in the market. Regulators and legislators who might turn to this database as a surrogate for the reasonable market value of physician or hospital services will come away with inaccurate information, especially if the claims submitted to this database are selectively contributed to over-represent the most heavily discounted or underpaid claims. Only by thoroughly and aggressively auditing and validating such claims submissions by the plans can HCCI ensure that the data is properly representative. Prior experience with Ingenix, and the direct financial relationship between HCCI and the plans, leads me to believe this is not a good bet.