Complex Massachusetts insurance reimbursement system hikes costs, impedes price transparency, report finds

Massachusetts Attorney General Maura Healey's report on state healthcare cost trends found the current reimbursement system for care is often complex, inconsistent across insurers and providers and can generate large administrative costs.

The report, issued Oct. 11, also found the current reimbursement system can make it harder for patients to make price comparisons.

"Healthcare costs are one of the highest expenses for Massachusetts families," Ms. Healey said. "This report shows that there is more we can do to reduce administrative costs and make healthcare price comparisons easier for patients, employers and health care professionals."

The report highlights three principal findings: Fee-for-service payments from commercial insurers to hospitals are determined using complex and varied methods that are often inconsistent across payers, providers and insurance products; risk contracts are varied and complex as well across payers; and the complex and varied reimbursement system results in additional administrative costs "that do not appear to add value to patient care, patient experience, or patient or provider engagement. It also serves as an obstacle to price transparency for consumers, employers, policymakers and providers."

In light of her findings, Ms. Healey recommended further examining the administrative costs associated with the current reimbursement process to identify waste and save money, as well as establishing real-time price transparency for patients.

Ms. Healey and her staff are scheduled to present on these findings at a cost trends hearing on Oct. 17. 


More articles on healthcare finance: 

Financial problems continue at struggling Pennsylvania hospital
For-profit hospital stock report: Week of Oct. 8-12
Colorado hospitals to Kaiser Permanente: Don't blame us for $65M loss


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