• AAFP Gives Proposed Transparency Rules Cautious Thumbs-up

    Updates Could Improve Value-based Care, but Details Bear Watching

    February 11, 2020, 12:51 pm News Staff — Regulations governing transparency of prices and cost-sharing and rules on medical loss ratios must center on patient care, the Academy reminded administration officials recently.

    "Price transparency is critically important for value-based care, and the AAFP supports steps for family physicians to reduce the costs of health care for their patients," said the Jan. 29 letter.

    "As our members pursue value-based care models that are responsible for total cost of care and involve financial risk, it is crucial for family physicians to have access to information on other providers' costs and quality performance to make informed decisions with their patients when making referrals."

    The AAFP was writing in response to the "Transparency in Coverage" proposed rule published in the Nov. 27 Federal Register. The regulation would

    • require group health plans and health insurance issuers in the individual and group markets to disclose cost-sharing information when requested by a participant, a beneficiary or an enrollee;
    • require plans and issuers to disclose in-network provider negotiated rates and historical out-of-network allowed amounts; and
    • amend HHS rules pertaining to medical loss ratio — the proportion of premium revenues spent on clinical services and quality improvement — to credit insurers for savings they share with enrollees that result from the enrollee's shopping for, and receiving care from, lower-cost, higher-value providers.

    The letter was sent to CMS Administrator Seema Verma, M.P.H.; Sunita Lough, IRS deputy commissioner for services and enforcement; and Preston Rutledge, assistant secretary for the Department of Labor's Employee Benefits Security Administration. It was signed by AAFP Board Chair John Cullen, M.D., of Valdez, Alaska.

    "Improving access to cost, quality improvement and population health management information related to services furnished to their patients by other providers will enable family physicians and their patients to make better-informed decisions that consider both cost and quality," the Academy said.

    The letter cited a 2017 Academy survey on value-based payment models in which just 13% of respondents said they had access to other specialists' costs and 7% reported access to other specialists' quality measure performance information.

    Requiring cost-sharing information to be posted in conjunction with quality information "would better allow a consumer to weigh negotiated prices and quality performance," the AAFP said, expressing support for the proposed rule.

    However, the letter sounded a cautionary note on the proposed rule's approach to medical loss ratio requirements — which historically, the Academy said, have helped to focus health care resources on patient care.

    "We urge HHS to closely monitor this change for any illicit plan activity," the letter said. "MLR policies must ensure that health care finances are focused on patient care rather than insurer profits."