Leveraging
Pricing Data to
Gain a Competitive
Advantage
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Regulatory Drivers and
the Data it Yields
dynamics of the healthcare market. Whether you view that as an opportunity or another regulatory requirement
depends on how you view the value of the data, it will yield.
Innovative models
Regulatory Drivers
disrupting pricing
Transparency in Coverage (TiC) Hospital Outpatient Prospective Value-Based Care
Payment System (OPPS)
• Release of negotiated rates
- In-network & allowed amount MRFs The final rule under 45 CFR § Transition to VBC arrangements focusing on
• Out-of-pocket cost estimator tool 180.50 laid out the requirements care, quality & cost
- Real-time out-of-pocket cost info for hospitals to publish their
• Revised MLR calculations standard charges for all items and
- Financial incentives for services. CMS mandated this info
Retail Health Clinics
in the form of machine-
count in MLR readable files (MRFs).
Walmart Care, Kroger, CVS
GFEs and AEOBs - Site of Care Optimization
The No Surprises Act Consolidated
Limits the amount patients can Appropriations Act of Guiding the member to high-performing, lower
2021 (CAA)
be charged at the in-network cost provider or virtual care setting
rate. Allows provider and The intent of GFEs (Good Faith
insurer to negotiate the final Estimate) is to educate patients on the
rate, however, if left unresolved, cost of upcoming items or services.
Virtual Health Clinics
either party may initiate the IDR AEOBs (Advanced Explanation of
process to determine the billed Benefits) are the insurer’s equivalent to
GFEs and provide insured patients an Significant growth & access to high-quality virtual
amount.
estimate of the cost prior to care. care options
Figure 1: Transparency Initiatives - Market Disruption
Figure 1 (white boxes) lists the four drivers from a Figure 1 (blue boxes) illustrates the
regulatory perspective:
innovative care and pricing models that,
• Transparency in Coverage Rule (TiC) (payers) when combined with regulatory drivers,
• The No Surprises Act (payers & providers) are creating disruption. However,
there is a broader and more impactful
• Cost Estimator Tool (payers) – TiC
opportunity at hand.
• Good Faith Estimate & Advanced Explanation
of Benefits (providers & payers)
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Estimated Total size of Pricing
number of the files to information
MRFs to be be ingested* for providers
ingested across payers
MRF data to 750K >450 TB 750K
be ingested
Aetna United Healthcare Netflix HD catalog
150 TB 150 TB 165 TB
Cigna Elevance LibGen catalog
50 TB 100 TB 120 TB
* The statistics are estimates of MRF data for 4 national plans as of November 2022
Figure 2: Scale and Volume of Price Transparency Data
The scale and size of data borne from price transparency are on a scale that payers and providers have never seen before.
Figure 2 estimates machine-readable file (MRF) data for four national payers as a sample of the volume compared to Netflix’s
entire high-definition catalog and the Library Genesis catalog of scholarly works.
Despite the Centers for Medicare and Medicaid (CMS) making changes in implementation guidance, many payers and
providers generate multiple gigabytes and will possibly grow into the low petabytes. Creating accurate, clean, and reliable
data generation and delivery are the initial challenges that providers and payers have faced for some time. One can imagine
the scale of data infrastructure that will be required for managing these voluminous data and the technology operating cost
required to sustain at an ongoing basis.
Seize the opportunity for price transparency
Now is the time to leverage MRF pricing data for more than compliance. This white paper explores the intersection
among healthcare trends, regulatory forces, and tactical moves that payers can take to start generating
actionable insights from MRF data as a critical competitive edge.
Drawing on expert perspectives to take action
Although payers intend to capitalize on this publicly available information to gain a competitive edge, there are several
concerns: enormous volumes of data, accessibility, and inconsistency issues in data. Payers that want to harness the true
potential of price transparency and MRF data across the healthcare ecosystem will want to take a broader and more
expansive view of the value, as well as proactively plan for their technological impacts.
This white paper features Paul Mango as the Former Deputy Chief of Staff for Policy at the U.S. Department of Health and
Human Services and a leader of Operation Warp Speed, and a CitiusTech advisory board member. Along with Paul’s view on
how MRF data can be used to change the pricing narrative in healthcare, CitiusTech’s assistant vice president and consulting
lead for the payer market, Shobhit Saran, and Shrey Sekhar, director of client delivery, will outline specific value propositions
for each stakeholder to maximize every sales, negotiation, and engagement opportunity.
Together, the authors will paint a picture that reveals the incredible opportunity and importance of taking specific steps rather
than a “wait and watch approach.” Now is the time to use publicly-available pricing data to transform the conversation for
payers with providers, employers, and members.
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Transparency in Coverage:
Moving from regulatory requirement
to business opportunity
Price transparency regulations are meant to help consumers make data-driven care decisions and manage the
for the healthcare ecosystem, as shown in Figure 3.
• Ensure service coverage
• Deliver quality care at par cost
• Ensure timely collection of
self-pay reimbursement
• Increase market share and trust
• Reduce days-to-bill Health
• Maximize reimbursement
System
• Avoid surprise billing
• Drive contract negotiations
• Manage total cost of care more accurately
• Create novel network designs with site of
care optimization
• Steer members to the most appropriate
Employer cost-quality care setting
• Engage payers in data-driven, value-based
• Shop for lowest procedure price care arrangements and care models
across best quality hospitals
• Deliver value-added benefit design to
• Understand OOP estimates
employees
• Increase demand for best quality care re
• Understand cost of care
with/without insurance Consumer
• Access easy payment options
• Have a better consumer experience
• Deliver superior member experience
• Ensure network adequacy
• Encourage member retention and trust
Payer • Achieve superior network mix
• Review contract negotiations
Figure 3: Price Transparency Benefit to the Healthcare Ecosystem
MRF data enables a competitive superpower
Leveraging the new pricing information via MRFs will change the nature of business for payers, providers, employers, and
health insurance brokers. While everyone will have access to these publicly-available data, “…. the realization of its full impact
technology platforms and capitalize on the opportunity to enable flexibility and insights from IT systems to meet the
expectations of business stakeholders from all areas -- products, sales, provider relations, and member engagement.
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How will healthcare organizations prepare and equip
their frontline business leaders?
Payers are strategizing how to negotiate par rates per market benchmarks and optimize provider networks, assessing
high-cost provider organizations, and moving out-of-network clinicians to in-network with lower negotiated rates.
Providers are actively pursuing new rates, which require the right data and analysis to be successful. Clinicians who have
negotiated rates that pale their colleagues will use publicly-available rate information to change the negotiation or
renegotiation dynamic.
Either party should work towards aligning (higher or lower) rates with higher quality. And employers are pursuing data that can
be leveraged in negotiating all sides of the benefits equation – lower rates, better access, and higher quality care.
Network
Payer's In-network & Allowed Amount Management
Machine Readable Files (MRFs)
Claims
Operation
Quality & VBC
Contracting
Enterprise data
Provider Member Claims Member
Experience
Clinical Quality Risk
Wearables SDoH CMS Actuarial &
Underwriting
Figure 4: Payer use case highlights opportunities across the value chain.
Value-chain areas to assess for threats and opportunities
Figure 4 outlines key areas that price transparency data will impact. We recommend that payers assess each for what threats
they pose and uncover opportunities to maximize the value chain. When combined with other enterprise data sets, there are a
host of opportunities:
Network management: Claims operations: Quality- andlue-ba
sed
value-based
contracting:
Identify provider contract Gather business intelligence on
renegotiation opportunities based the allowed amount calculation Use pricing benchmarks to
on market rate benchmarking and as part of the advanced update value-based care goals,
claims data. explanation of benefits (AEOB) as well as track goals against the
and as part of compliance with cost of care projections.
the No Surprises Act.
Member experience: Actuarial & underwriting:
Engage and empower members Enhance benefit design based on
through cost estimator tools that optimized networks and contracted
calculate the total cost of care rates.
and out-of-pocket expenses.
Leverage the MLR incentive in the
TiC rule to incentivize members
towards low-cost networks.
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Changing the payer narrative
with pricing data
recommendations to maximize the value of pricing information along with key considerations to improve analytics
readiness and transform operations through insights.
Reshape market dynamics by Build a consumer-first strategy Gain a strategic advantage with
harnessing the true potential with redesigned & customized competitive pricing reducing
of price transparency. product lines. overall cost of care.
Figure 5: Price Transparency Solution for Payers provides three main outcomes.
Payer with employers and brokers
The opportunity:
Competing cost pressures are exacerbating tensions between payers and employers. Facing another 6% or more increase in
healthcare costs, employers are pursuing various alternatives like direct contracting, specialty carve-outs, and bundled
specialty care or procedures.
For payers that leverage pricing data to their advantage, this scenario presents an opportunity to meet employers’ needs and
create a mutually-valuable business arrangement.
Brokers face many of the same pressures as employers and are responsible for providing unique value to employers every
year. By leveraging MRF data, payers working with brokers can become value-added partners by providing MRF
data-as-a-service.
What you can do now:
We recommend that payers develop analytics capabilities and insights to help employers think beyond line-item costs. Be
prepared to talk about aggregate or total costs of care. Provide data-driven ideas for innovative benefits and network design
tailored to the employer’s needs. Also, focus on novel consumer benefits that help steer members to lower-cost and
higher-quality care options. Through these tactics, payers can use pricing data as the foundation for insights that help
contract directly. Pricing data gives leverage to provide employers with nimble product and benefit design.
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Key Considerations:
For engaging employers, CIOs should assess and address the following areas:
• Price Transparency Solution to ingest and curate publicly-available MRFs
• Capability to generate employer-specific sales insights based on MRF data, employer utilization, and provider networks
• Capability to perform “What if?” scenarios that compare the total cost of care, direct contracting, narrow networks, and
shifting to a high-performance network
• Enable more nimble product and benefit design to accommodate custom network/carve-out requirements
• Use publicly-available MRF data for benchmarking against competitors
Payer with providers
The opportunity:
Continued losses and ongoing inflation have put providers and health systems under enormous pressure with more than 53%
of hospitals poised to lose money in 2022 and 2023. Additionally, sites of care optimization are shifting the financial dynamics.
This raises the opportunity to enhance the attractiveness of value-based care (VBC) and alternative payment model (APM)
arrangements.
Of the total hospitals Of the 65% non-compliant
surveyed hospitals
What you can do now:
We recommend that payers marry cost with quality data
to engage in VBC or APM discussions. Demonstrate how
prioritizing current networks that achieve the best cost,
94% 18%
quality, and access metrics are the priority. And create
data-driven innovative ideas to leverage strong provider
relationships to steer membership and bring more No files or
balance to provider revenue between what’s shoppable
Fully compliant searchable DBs
and non-shoppable.
Though hospitals have struggled to adopt and comply
65% 82%
with transparency regulation from 2021 (see Figure 6),
the majority of payers overwhelmingly complied
with the mandate. This fills in the overall need for having
information publicly available and use data for
collaborative initiatives that could meet payer-provider
Unambiguously No payer associated
needs and accelerate negotiations. This also creates compliant charges
greater opportunity to identify partners that can enable
a holistic care approach and reduce the total cost of care.
Figure 6: Hospital non-compliance presents
an opportunity for payers.
Key Considerations:
CIOs should assess and address the following areas:
• Price Transparency Solution to ingest and curate publicly-available MRFs
• Use publicly-available MRF data to benchmark against competitors and illustrate provider opportunities
• Generate provider-specific insights with publicly-available payer contracted rates, out-of-network benchmark rates,
and quality data, building the case for value-based pricing, where applicable
• Identify strong provider partners and build out steerage scenarios, narrow networks, or specialty carve-outs
• Go beyond pricing data and combine with utilization data to generate a tailored “market basket”
• Leverage MRF data to compare against the Medicare fee schedule to determine what percentage uplift should be used
for commercial contracts
06
Payer with consumers & members
The opportunity:
Consumers seek guidance related to price transparency – what it means, how they should use it, and how cost and quality
information might influence their decisions, as reflected in Figure 7. This presents an opportunity for payers to help consumers
and members make sense of all the new data.
Additionally, there is a significant opportunity to use MRF data, combined with other datasets, to uncover creative ways to
incentivize and educate members on transparency. What would engage members and support them to achieve their goals in
a mutual, financially prudent approach?
What you can do now:
Price transparency will produce the best outcomes when the end consumer can choose a service provider based on cost,
quality, and access preferences. Payers must delve into consumers’ healthcare and health insurance shopping habits and
preferences to enable that. Then, integrate those with their Digital Front Door (DFD) and omnichannel strategy. We recommend
that payers determine specific cohorts of members against certain set of services to target specific network providers for
reduced cost and better quality of care.
The consumers’ perspective
Want their healthcare Would consider a Feel “completely
(price) information lost” when it
82% delivered in a more 66% they knew they could 56% comes to under-
concise and simple get the same quality of standing health
manner care at a lower cost insurance
What confuses healthcare consumers the most?
What counts towards a Which procedures are Which services are
52% deductible? Member 47% covered? 47% in-network or
out of pocket? out-of-network?
Figure 7: How can payers use pricing data to solve consumer confusion?
Key Considerations:
CIOs should assess and address the following areas:
• Evaluate impact and options to integrate pricing-based steerage and member incentives in their current omnichannel and
DFD programs
• Personalize members’ shopping experience based on the member’s care journey and shopping history
• Datasets and analytics to offer member incentive programs based on their care network and tracking ROI
• Assess if the payer’s digital tools and systems are maximizing the value of data and technology to make shopping and
navigation easy
• Define and offer member incentives based on the care delivery selection as an outcome of insights
• Provide data-driven steerage recommendations to inform engagement campaigns and education
• Assess ROI for steerage and consumer incentive strategies
• Create new data-drive consumer incentive and engagement initiative
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Seize the opportunity to create a new storyline and conversation
the critical fulcrum in the healthcare equation, each payer can leverage MRFs and other datasets to share a new cost-quality
story and prepare for new strategic conversations.
About the Authors
Paul Mango Shobhit Saran Shrey Sekhar
Former Deputy Chief of Staff Assistant Vice President Director of Client Delivery
for Policy at the U.S. Department & Consulting Lead, CitiusTech
of Health and Human Services Payer Market
and a leader of Operation
CitiusTech
Warp Speed
About CitiusTech
CitiusTech (www.citiustech.com) is a leading provider of healthcare technology services, AI/ML & analytics
capabilities, platforms, and end-to-end packaged solutions to over 130 organizations across the payer, provider,
medical technology, and life sciences markets. With over 7500+ healthcare technology professionals worldwide,
CitiusTech powers digital transformation through next-generation technologies, solutions, and accelerators. Key
focus areas include healthcare interoperability data management, quality performance analytics, value-based
care, omnichannel member experience, connected health, virtual care delivery, real-world data solutions, clinical
development, personalized medicine, and population health management.
CitiusTech has two subsidiaries, FluidEdge Consulting (www.fluidedgeconsulting.com) and SDLC Partners
(www.sdlcpartners.com), with deep expertise in healthcare consulting and payer technologies, respectively.
CitiusTech’s cutting-edge technology expertise, deep healthcare domain expertise, and strong focus on digital
transformation enable healthcare organizations to reinvent themselves to deliver better outcomes, accelerate
growth, drive efficiencies and ultimately make a meaningful impact on patients.
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