Published May 17, 2019
People shop for the best deal when it comes to so many products and services. So why is healthcare different? Part of the reason is that most things - cars, a loaf of bread, even health insurance itself - have a price tag. But when it comes to healthcare services, prices aren’t always available. When they are, researchers have been finding that the jury is still out on whether simply knowing what something costs encourages lower healthcare spending.
In the journal Health Affairs, researchers from Harvard Medical School, the University of Southern California, the RAND Corporation and Health Care Service Corporation, a Mutual Legal Reserve Company (HCSC), have found paying patients to choose lower cost services can make a difference.
Giving members the power to choose based on price and quality
The team of healthcare policy, economics and data scientists evaluated the impact of HCSC’s Member Rewards program on nearly 270,000 employees of 29 employers with health plans from HCSC. Members who use the company’s online ProviderFinder tool or reach out to a customer advocate can evaluate prices for 131 different elective services, like an MRI.
“Members can see quality and cost information, provider credentials, and even member reviews before choosing a provider,” says Tom Meier, Vice President of Market Solutions for HCSC. The tool, says Meier, can also estimate a member’s total cost for the service. “It calculates that cost based on the member’s individual plan, taking into account, for example, whether a member has met the deductible," or the amount of money a member pays out of pocket before a health insurance plan begins to cover costs. The idea, says Meier, is to encourage members to shop not only based on price but on quality. Patients who choose a designated lower-price provider will receive a check ranging from $25 to $500, depending on the provider’s price and service.
Motivated by the reward
Leanne Metcalfe, Ph.D., Executive Director of Research and Strategy at HCSC, helped author the study. “What we saw was that even after people met their deductible,” says Metcalfe, “they still shopped. They wanted that reward.”
Metcalfe says that about 8 percent of members included in the study used the tool, mostly for imaging services. Members and employers benefitted: every dollar the health plan paid a member for choosing a lower cost service was also deducted from the employer’s health insurance bill. In 2017, that translated into a savings of more than $2 million dollars for employers. Metcalfe says that number may sound small, but as the program expands, the savings go up. And that could bend the healthcare cost curve for employers and employees.
Awareness is key
Meier says HCSC goes beyond offering the program to ensuring members know about it and how to use it. “When members call customer service, for example,” says Meier, “they’re not typically calling for a quote on an MRI. They’re calling about a new ID card.” At that point, says Meier, customer advocates can remind members about the program. “We leverage every opportunity with that member,” says Meier, to let them know about the tool.
For Metcalfe, the takeaway of her research about HCSC’s Member Rewards program is clear. “Just having a price transparency tool isn’t enough. You need to give people an incentive to use it. That’s a win for the employee, for the employer, and, over time, should ease costs.”
Health Care Service Corporation is the country’s largest customer-owned health insurer and fourth largest health insurer overall, with more than 16 million members in its health plans in Illinois, Montana, New Mexico, Oklahoma and Texas.
What is prior plan approval?
Prior plan approval (also called prior approval, prior authorization, prospective review, prior review, certification or precertification) is when Blue Cross NC reviews certain medical services or drugs before they are given to patients to make sure that the service or drug is right for the patient.
Even if a doctor gets prior plan approval from Blue Cross NC that says that the service or drug is correct for the patient, this does not guarantee payment. For more information, go to the prior plan approval page.
What types of scans need approval from Blue Cross NC before they are done?
High-tech scans (diagnostic imaging procedures), such as CT or CTA scans, MRI or MRA scans, PET scans or special heart scans called nuclear cardiology studies, require prior plan approval from Blue Cross NC. If these scans are not part of an emergency room visit or an inpatient hospital stay, then your doctor needs to get prior plan approval from Blue Cross NC.
What are these scans and what do they do?
- CT scan: Computed tomography (CT) scan uses X-ray imaging to make detailed pictures of structures inside of the body.
- CTA scan: Computed tomography angiogram (CTA) scan uses X-ray imaging to make detailed pictures of blood vessels inside the body.
- MRI scan: Magnetic resonance imaging (MRI) is a scan that uses a magnetic field and pulses of radio wave energy to make pictures of organs and structures inside the body.
- MRA scan: A magnetic resonance angiogram (MRA) uses a magnetic field and pulses of radio wave energy to provide pictures of blood vessels inside the body.
- PET scan: Positron emission tomography (PET) is a test that uses a special type of camera and special nuclear medicine to look at organs in the body.
- Nuclear cardiology studies: These are special studies of the heart.
Who is responsible for getting prior plan approval from Blue Cross NC?
Your doctor. If your doctor is part of the Blue Cross NC network, he or she should contact Blue Cross NC and request prior plan approval for your scans. If your doctor is not part of the Blue Cross NC network or is located outside of North Carolina, you must tell your doctor to get prior plan approval for you. An out-of-network or out-of-state provider will not be familiar with Blue Cross NC's prior plan approval requirements. If prior plan approval is not obtained, Blue Cross NC will not pay for the scan and you will be responsible for the bill (this does not apply if you see an in-network provider). Tell your doctor to visit our Web site, www.bcbsnc.com/providers/ppa, for more information about how to get prior plan approval for your scan.
What if my doctor refuses to get prior plan approval from Blue Cross NC before my scan?
If your doctor is part of the Blue Cross NC network, he or she is responsible for getting prior plan approval from Blue Cross NC on your behalf. You will not be responsible for the bill if your in-network doctor does not get prior plan approval. If your doctor is not part of the Blue Cross NC network or is located outside of North Carolina, you must tell your doctor to get prior plan approval for you. If your doctor does not get approval and you have the scan anyway, Blue Cross NC will not pay for the scan and you will be responsible for the bill (this does not apply if you see an in-network provider).
Is approval needed if I go to an out-of-network or out-of-state doctor?
Yes. If your doctor is not part of the Blue Cross NC network or is located outside of North Carolina, you must tell your doctor to get prior plan approval for you. An out-of-network or out-of-state provider will not be familiar with Blue Cross NC's prior plan approval requirements. If prior plan approval is not obtained, Blue Cross NC will not pay for the scan and you will be responsible for the bill if the provider is out-of-network or out-of-state. Tell your doctor to visit our Web site, www.bcbsnc.com/providers/ppa, for more information about how they can request prior plan approval for your scan.
What if an approval is required outside of Blue Cross NC's normal business hours, such as at night or on the weekends?
Blue Cross NC is working with a company called American Imaging Management (AIM) for the approval of high-tech scans. AIM has a Web site that lets doctors request approval for high-tech scans 24 hours per day, seven days a week. If your doctor does not have access to the Internet and the request is urgent, your doctor has two business days to file the paperwork to AIM in order for Blue Cross NC to approve the scan. If your doctor does not file the paperwork within two business days after an urgent request, Blue Cross NC may not pay for the scan.
If your doctor is in the Blue Cross NC network, he or she is responsible for getting prior plan approval from Blue Cross NC on your behalf. If your doctor is out-of-network or located outside of North Carolina, you are responsible for the cost of the scan if the doctor does not obtain prior plan approval before the scan is done. Remember: You do not need prior plan approval for a high-tech scan if it is part of an emergency room visit or an inpatient hospital stay.
Why does Blue Cross NC require prior plan approval for high-tech scans?
High-tech scans are great tools for doctors to use when diagnosing patients, but they are expensive and are sometimes not used the way they should be used. By requiring prior plan approval before the scan is done, Blue Cross NC is trying to keep medical costs down and keep patients from having tests they don't need.