Health insurers say a proposal to make information about the Medicare Advantage bidding process public could wreck their ability to get good deals from health care providers.
The Medicare Advantage program gives insurers, managed care companies and other types of health coverage providers a chance to sell alternatives to traditional, government-run Medicare coverage. To participate in the program, coverage issuers go through a bidding process.
Officials at the Centers for Medicare & Medicaid Services (CMS) recently said, in a package of draft Medicare program regulations, that they might post the information issuers submit during the Medicare Advantage bidding process on the Web. CMS officials suggested that they could release the information about five years after bidding is over, on the first Monday of October.
The public comment period for the draft regulations ended Sept. 6. Thirty-two commenters mention the bid-pricing data release proposal.
Physician groups, consumer groups and researchers welcomed the proposal. Some have asked CMS to release as much bid pricing data as possible as quickly as possible.
Insurers say forcing plans to show the providers their hand would backfire by helping providers drive up health care services prices.
Insurers say increased transparency would hurt their ability to bargain health care prices down at the negotiating table. (Photo: Thinkstock)
Providers v. plans
Dr. Brian Biles, a physician and professor emeritus in the George Washington University health policy department, says the Medicare Advantage program now releases much less data than the traditional Medicare program.
Biles says he would use any additional data released to analyze the performance and efficiency of the Medicare Advantage program as a whole, and to compare individual Medicare Advantage plans by plan type and geographic area.
“I strongly object to the proposal to delay release of the bid pricing tool data for five years,” Biles writes. “A five-year delay is unprecedented in the release of Medicare data by CMS and the federal government and is directly contrary to CMS’ ostensible goal of making the Medicare health care system more transparent, affordable and accountable.”
Representatives from the Washington office of the Blue Cross Blue Shield Association and many individual insurers objected to the bid pricing data disclosure proposal. They said the proposal could hurt their ability to negotiate with providers, by revealing sensitive, confidential information about contract terms and prices.
Providers, competing insurers and others could probably use some of the information in the bid pricing data to estimate how much plans are actually paying for various services, according to David Schwartz, a representative for Bloomfield, Connecticut-based Cigna Corp.
Providers could use the payment estimates to get higher payment rates from Medicare Advantage plans, and that could lead to higher Medicare Advantage plan costs, Schwartz writes.
In a market with just two hospitals, one hospital could use bid pricing data to find out exactly how much the other hospital has been getting from Medicare Advantage plans, Schwartz says.
A hospital “could use this information to increase its prices in future rate negotiations,” Schwartz says.
Justine Handelman, a vice president at the Blue Cross Blue Shield Association, questions how many researchers really want Medicare Advantage bid pricing data.
“We don’t see a high demand from the research community for new data today,” Handelman writes. “Rather, we think the interest might be among a few academics who would like the data for negative reasons and/or from competitors, for bid data for the areas they might be exploring for expansion.”
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