Independent Research Funded by Physicians for Fair Coverage Shows That FAIR Health is a Useful Source of Data for Out-of-Network Physician Charge Benchmarking

WASHINGTON, April 21, 2017 /PRNewswire-USNewswire/ -- In a new analysis funded by Physicians for Fair Coverage, researchers at NORC at the University of Chicago, an independent research organization, today announced results of a study that found the FAIR Health database currently offers advantages over other national datasets and state All Payers Claims Data (APCDs) for the purpose of identifying a standard benchmark for out-of-network physician rates for medical services. This research relied on publicly available information related to relevant data sources as well as qualitative discussions with data stakeholders.

Physicians for Fair Coverage commissioned the study because of concerns it has regarding the increasing practice of insurers narrowing their physician networks and the impact on physicians and patients. For example, the narrowing of networks can result in physicians practicing out-of-network at in-network emergency departments, which patients receiving care do not realize. Since the reimbursement offered by the insurance companies doesn't cover the costs of the services rendered, the insurance gap forces the physicians to balance bill for their services  – which is often a surprise to the patient because the fees are in excess of the standard in-network, expected rates.

NORC researchers reviewed available information related to FAIR Health, three other national databases and 15 state APCDs to determine the most reliable source of data when benchmarking out-of-network physician reimbursements at in-network facilities. The criteria on which NORC evaluated the databases, which were developed in consultation with Physicians for Fair Coverage, included:

• The size and scope of the database
• Availability of both allowed and billed charges
• Availability for benchmarking
• Cost of licensing the data
• Overall independence of the vendors

This analysis showed that FAIR Health met the most criteria and indicated FAIR Health is an important potential source of data. An important differentiator is that FAIR Health licenses their data for out-of-network benchmarking purposes unlike most other national data sources.

This independent research showed that FAIR Health not only has an exceptionally large and geographically representative database, but also due to the ability to search data in a geographical zip code, offers deep local comparisons of physician charges. This conclusion follows, in part, from the following attributes of FAIR Health:

• A national dataset with over 150 million covered lives
• Contains both commercial and Medicare claims
• Includes allowed and billed charges
• Is easily accessible data and moderately priced
• Transparency is its primary business

For the purpose of identifying a standard benchmark, outlined by Physicians for Fair Coverage in the study, NORC's review found that using data from a national vendor had advantages over state APCDs.  NORC found that APCD data and access processes are not uniform across states, and because of these limitations, rendering a nation-wide standard and process for analysis of claims and costs associated with the establishment and maintenance of the databases very difficult. Moreover, the recent Supreme Court decision in Gobielle v. Liberty Mutual Insurance Company means that states cannot require ERISA-regulated self-funded plans to report data, making it more difficult to apply benchmarks based on these data.

"Our review found that FAIR Health offers a useful and localized data set that can be utilized to help inform policymaking with respect to how to reimburse for medical services provided by out-of-network physicians," said Jon Gabel, NORC's lead researcher. 

"Legislators across the country are recognizing that surprise insurance gaps are leaving patients exposed," said Michele Kimball, CEO, Physicians for Fair Coverage. "As they work to close these gaps caused by insurers narrowing physician networks, this NORC analysis demonstrates that using the FAIR Health database to better understand for out-of-network payments is the more comprehensive, transparent and inexpensive avenue for legislators compared to any other national or state database."

The other three national vendors NORC reviewed are: Health Care Cost Institute, Blue Health Intelligence and Truven Health Analytics. The state based APCD's NORC examined in the report are: Arkansas, Colorado, Kansas, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, Oregon, Rhode Island, Tennessee, Utah, Vermont, Virginia and Washington.

NORC conducted web-based research and a grey literature review to gain insights into vendors and databases. Then, NORC conducted phone interviews with executives from each organization to gather information about the organizations, the data each they maintain, and processes for accessing those data.

The authors of the NORC study will formally unveil and discuss it Friday at 12:15 PM Eastern Time at the University of Georgia Law School symposium focusing on rural healthcare.  The symposium will be broadcast via live stream.

SOURCE Physicians for Fair Coverage