By Dan Kazzaz, CEO of Secure Exchange Solutions, Inc.

July 2021– I confess, I do not like shopping. I do not like comparing products, researching how people like the product, traveling from place to place – nope – I do not like any of it.

That said, I love convenience. So, if I want to travel somewhere – if I get to make travel arrangements quickly and easily AND get the best price – then I would have to admit that I like some aspects of shopping.

The most recent pandemic demanded/allowed some changes in my household’s shopping behavior. We began ordering food supplies to be delivered. This worked well, and we found that we were comfortable about quality when ordering brand name, packaged products. On the other hand, ordering produce was hit and miss.  We often found that the quality of the fruits and vegetables was not great. Further, it is difficult to do a price comparison between stores. We would have liked to price a list of items for each of the local grocery stores and then choose where to order it from.

Can we apply the lessons of the pandemic and other purchasing activities to healthcare pricing and delivery of services? First step, create the open API’s to facilitate the flow of information.

Consumer query interface

Implementation of a consumer price check of healthcare services could be facilitated by having an open, universally implemented API supported by the provider billing software vendors.

This “query API” must first be designed and tested. The logical place for this development is with an organization that works on a standards committee-accredited model such as the one that developed the original healthcare billing and payment API’s, ANSI ASC X12.

While the ANSI ASC X12 organization does not yet have a pricing query API, there is no time like the present to create one.

In addition to the query API, much work would need to be done to define bundles of healthcare services, for example, a hospital stay. (Notice how there is a price quote for a flight or hotel room, but the actual price is based on whether you check your baggage or park your car.)

Since the consumer’s responsibility portion of a provider’s healthcare bill is dependent on the provider’s contract with the patient’s insurance company, that must be determined first.   Therefore, a parallel effort to developing and testing the consumer query should be the development and exchange of contract pricing information between payers and providers.  With that in place, a patient query of providers’ prices and services can make sense.

Price Exchange

One of the earliest Business to Business (B2B) exchanges between buyers and sellers was normalizing the pricing information exchange. In our case, this is the contract pricing between payers and providers.

Part number

As B2B pricing was first normalized, in order to purchase something collaboration was needed on the concept of a “part number.” Typically, the sellers had part numbers and their buyers had their own part numbers. Most commonly, the sellers kept track of the buyers’ part numbers.

The methodology did not scale to retail items (cereal, clothes, etc.) Hence a mechanism was created to have unique numbers per item. We now know these numbers as Universal Product Codes (UPC) codes. They are on every product from a grocery or apparel store. To keep everything unique, the UPC code consists of 2 numbers, one number signifying the manufacturer and the other describing the item.

In healthcare, we have certain standardized numbers for items. These include CPT codes, HCPC codes and LOINC codes.  Do they cover everything in healthcare?  No. Some terms are bundled and unique to institutions, for example, Chem 40, Lipid Panel, etc. The closest effort in healthcare to deal with bundled pricing was CMS’s use of Diagnosis Related Grouping (DRG) codes. This effort could (and should) be expanded and made more generic.

Catalogue message

When B2B ecommerce started, one of the earliest items to be standardized was a format for a catalogue. This format consisted of a list of part numbers, prices, and qualifiers on each item. It turns out that a catalogue message exchange was critical to all of supply chain. It served as a cornerstone for re-supply.

The same approach would work within healthcare as well.  Coincidentally, large provider systems already have expertise in this area. These groups use the catalogue exchange in their ordering contracts with suppliers (along with the basic purchase order and invoices). This expertise could be leveraged and applied in reverse to the hospitals’ payer customers.

Given that providers, payers, and their intermediaries are already exchanging information using the X12 Open API (EDI Standard), and providers are using it for supply chain, then extending the price catalogue to provider/payer pricing contracts should be easy. These implementations could be facilitated by combining two existing standards, X12 and Direct Secure Messaging, to create the Open API.

Automating pricing information has a huge ancillary benefit: reducing the all-too-frequent pricing disputes between payers and providers. These disputes usually arise because pricing between payers and providers is handled manually and subject to error. Often the payer contract pricing is not captured accurately in the provider billing system. This causes the bill being presented to the payer to not reflect the contracted amount. Similarly, providers are reimbursed incorrectly because their contracted amounts are not accurately stored in payer systems.

Overcoming programming obstacles

Every organization has a great deal on its plate – so implementing these interfaces may not be so quick. The good news about today’s environment is that Natural Language Processing (NLP) tools can be used to convert contracts into data. The beauty of having a standard-based API is that it provides a defined data model for pricing, so provider systems can easily import them. As they say, it is just a small matter of programming.

About the Author

Daniel I. Kazzaz is the CEO of Secure Exchange Solutions, Inc.

Dan offers 40 years of experience in systems design and integration. Dan’s focus is on creating consensus between diverse parties and suggesting scalable, interoperable solutions for exchange of business, clinical and consumer information. Dan has been an active participant in multiple American National Standard Institute (ANSI) Accredited Standards Committees (ASC). Among his other responsibilities, he currently sits on the ANSI ASC X12 Board of Directors.

He and his partners established Secure Exchange Solutions (SES) to help healthcare clients leverage the latest technologies for clinical interoperability. SES clients include Integrated Delivery Networks, Health Interchange Exchanges (HIE’s), national commercial payers, Medicare and Medicaid processors, Electronic Health Record vendors and consumer facing vendors. Today SES has grown to be one of the country’s largest data exchange networks of this type.

Prior to Secure Exchange Solutions, Dan founded, grew and sold PaperFree Systems. Originally established in 1984, the organization created software tools to facilitate implementation of  B2B exchange for a wide range of organizations. Under Dan’s guidance, PaperFree pioneered the development of scalable semantic data mining and conversion.

Dan earned a BA and MA degrees in mathematics from Brandeis University.

Dan will be attending HIMSS and SHIEC. If you are attending and want to meet to discuss the federal price regulations (or anything else), please send an email to Info@secureexsolutions.com