Benchmarking medical prices with payer transparency files

When attempting to use transparency data to benchmark facility (hospital and ambulatory surgery center) pricing, Plato’s Allegory of the Cave draws a stark parallel to how the Payer Price Transparency files have deviated from their original intent. In Plato’s allegory, prisoners chained in a cave see only the shadows on the wall, mistaking them for reality. These distorted shadows are a far cry from the objects casting them.

The facility rates in Payer Transparency in Coverage files (or TIC files) often do not reflect the rates that the original payer-provider contracts would produce, and therefore are only part of the answer to hospital price research.

With the TIC Files, the payer-provider contracts are the “real objects” outside the cave: straightforward, foundational, and direct in indicating how rates should be calculated. While these contracts can contain a simple translatable price list, they often also contain complex formulas that require the actual charges and coding pattern to determine the price.