- Prices negotiated by health insurers vary widely between geographies — even for the same insurer, according to a new study that authors said is the first of its kind relying on federally mandated price transparency data.
- Humana members paid more for medical care in the Upper Midwest and Southeast than in the Central U.S. and Florida, according to the research published in JAMA Health Forum last week.
- More than half of Americans are covered by private insurers, which negotiate rates in local markets. The variability in cost between markets could be due to a number of factors, including imbalances in market power and negotiation leverage, anti-competitive practices and actual variation in clinical quality, study authors said.
Researchers obtained Humana’s price data from October 2022 for the study. They said they selected Humana because it’s a large national insurer, covering roughly 1 million people with commercial insurance across the U.S.
Researchers reviewed Humana's negotiated rates for seven procedures, including patient office visits and high-severity emergency department visits.
They found Humana reimbursed providers sharply different prices based on geography. Prices varied from $69 to $114 for an office visit; $348 to $528 for a colonoscopy; and $132 to $218 for a brain CT scan.
Though higher priced counties tended to be found in the Upper Midwest and Southeast, it was not uncommon for higher-priced counties to border lower-priced ones, researchers said.
Transparent billing has gained attention over the past year as employers, providers and patients seek information to help them manage costs.
The government has also sought insight into pricing to help it better regulate the industry. Lack of price transparency limits the ability of regulators to monitor prices and impose “market discipline,” the report said.
Last summer, insurers were required to begin complying with recent rules requiring them to release in-network negotiated rates for covered items and services.
Health insurers have been compliant with the new regulations. But parsing that data is at times still difficult, according to Health Affairs. The data is often presented in inaccessible formats or without a searchable index to speed up review.
Still, studies like the one released in JAMA point to the promise of increased pushes for price transparency, the researchers say, adding the study, “opens the door to using [price transparency] data in other, broader settings.”