Sapphire Digital Issues Public Comment on Centers for Medicare & Medicaid Services Proposed Rule

WASHINGTON, Feb. 8 -- Eric W. Gross, executive vice president and general counsel at MDX Medical Inc. d/b/a Sapphire Digital, Lyndhurst, New Jersey, has issued a public comment on the Centers for Medicare and Medicaid Services' proposed rule entitled "Transparency in Coverage". The comment was written on Jan. 28, 2020, and posted on Feb. 5, 2020:

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MDX Medical, Inc. dba Sapphire Digital ("Sapphire Digital" and formerly known as Vitals) appreciates the opportunity to provide comments on the "Transparency in Coverage Proposed Rule" CMS 9915-P, as issued in the Federal Register on November 27, 2019 (84 Fed Reg. 65464) ("Proposed Rule").

Sapphire Digital/1 is a privately held technology company with headquarters located in Lyndhurst, New Jersey. Sapphire Digital delivers consumer-centric transparency solutions that lower the cost of care for health insurance issuers, employer sponsored group health plans (health insurance issuers and groups health plans are collectively referred to herein as "Health Plans") and their enrollees. Our engagement and shopping technology platforms, powered by provider, cost and quality data, makes it easy for consumers to find the right care. As of the date of this letter, Sapphire Digital has over 400 clients and 96,000,000 consumers utilizing its transparency tools across the United States.

SUMMARY OF SAPPHIRE DIGITAL'S POSITION

Sapphire Digital shares the Department of Treasury, the Department of Labor and the Department of Health and Human Services' (the "Departments") desire to increase price transparency, competition, and consumerism in health care. We support the requirement that every Health Plan provide cost transparency and benefit accumulations to their enrollees. We also support the proposal to amend the medical loss ratio ("MLR") calculation to permit health insurance issuers to receive credit in their MLR for savings they share with an enrollee for shopping and receiving care with lower cost, higher value providers. We also believe the implementation of a baseline set of transparency rules that Health Plans must comply will help lessen the confusion caused by the laws and regulations currently in place in multiple states. However, we have some concerns with portions of the Proposed Rule and its proposed implementation timeline.

SAPPHIRE DIGITAL SUPPORTS PROPOSED AMENDMENTS TO THE MEDICAL LOSS RATIO, WHICH WILL FOSTER ARRANGEMENTS THAT INCENTIVIZE CONSUMERS TO SEEK LOWER-COST, HIGHER-VALUE CARE

Sapphire Digital supports the Departments' proposal to amend the MLR calculation to permit health insurance issuers to receive credit in their MLR for savings they share with an enrollee that rewards them for shopping for and receiving care with lower cost, higher value providers. Sapphire Digital knows that shared savings programs work to change consumer behavior. Since 2015, Sapphire Digital's shared savings program, SmartShopper,/2 has issued over 149,000 incentive reward payments, generating over $85 million in savings for Health Plans. Moreover, in certain geographic regions where the SmartShopper Program is offered, Sapphire Digital has seen healthcare providers lower their prices in order to remain competitive in the marketplace. This is exactly the type of economic effect the Departments are looking for in the Proposed Rule. Therefore, Sapphire Digital fully supports this amendment to the MLR calculation as it understands the impact that shared savings payments can have on consumer behavior.

In the event the Departments do not implement other sections of the Proposed Rule, we ask that the Departments move forward with finalizing the MLR provision. The MLR provision is separate and apart from the rest of the Proposed Rule and should be finalized and implemented as soon as possible to allow for the health insurance issuers to take advantage of the proposed policy change in the 2020 MLR reporting period.

Lastly, in adopting this proposed amendment to the MLR calculation, Sapphire Digital requests clarification on a few points.

1. Is only the amount that is shared with the enrollee permitted to be included in the numerator of the MLR calculation, or is the cost that the plan incurs to develop and administer such a shared savings program (such as, for example, administrative fees paid to the vendor to operate the shared savings program) also permitted to be included in the numerator?

2. For the shared savings payment to qualify for inclusion in the numerator of the MLR calculation, must the enrollee receive care from a provider that is both lower cost and higher value, or can the payment be based on either just cost or quality?

3. Sapphire Digital asks the Departments to confirm that any cash payment amounts shared back with enrollees by a Health Plan issuer (i.e., fully insured Health Plan) to reward such enrollee for receiving care at a high value provider should be considered 1099 miscellaneous income to the enrollee that received the payment.

SAPPHIRE DIGITAL HAS CONCERNS THAT CERTAIN DATA REQUIREMENTS MAY HAVE UNINTENDED CONSEQUENCES AND CAUSE CONSUMER CONFUSION

Based on our experience developing consumer-friendly transparency tools, we are concerned some of the key provisions in the Proposed Rule may be counterproductive and confusing to the end consumer. Specifically, we believe consumers could be confused by the Departments' proposals below:

(1) Requirement to disclose cost-sharing information using single billing codes: Under the Proposed Rule, the Health Plan's on-line tool would be required to provide an estimate of the consumer's out-of-pocket costs, even if the consumer only enters a single billing code (such as a CPT Code), related to the procedure or treatment.

Our Concern: There are over 740 DRG codes, 10,000 CPT Codes, and 77,000 ICD-10 codes with a significant number of modifiers that could be used to search for a treatment or procedure. It is not feasible to ask a consumer to know and understand all CPT/DRG/ICD10 codes that could be used to bill for a particular procedure or treatment. Moreover, only a small subset of these codes are likely to be shopped by consumers.

Sapphire Digital works with Health Plans to build industry leading consumer-friendly tools that help consumers identify in-network providers. With respect to cost transparency, Sapphire Digital provides cost information that is relevant to the specific enrollee by providing the following:

* The estimated cost (or cost range) for the total service or procedure, that includes the full collection of services associated with a specific treatment, even when the episode of care is not paid as a bundle;

* The estimated cost and benefit accumulations, tailored to the consumer's specific benefit plan, taking into account deductibles and coinsurance; and

* Permitting enrollees to search by common medical terminology and/or description of a procedure, not the technical name or specific CPT/DRG/ICD-10 Code for the procedure.

Based on its experience, Sapphire Digital believes our approach provides the consumer with information that is the most relevant and easy to understand. Accordingly, it is important that the Departments consider the following improvements to the regulation:

* Allow the consumer to search for a procedure or treatment using common medical terminology and/or descriptive terms, and not require searches that require the use of billing codes. It is important to simplify the search process as much as possible to make it easier for a consumer to get reliable, accurate information related to the estimated total cost of a procedure or treatment;

* Set a minimum threshold of data that the consumer must enter, beyond simply entering a single billing code, in order for a Health Plan's on-line tool to generate cost information that would be useful to the consumer. Such a change will ensure a consumer who enters a single CPT code for a procedure or treatment, without identifying the site of service, or one who enters a single CPT code for outpatient/inpatient services (which could require multiple codes), would be provided useful and comprehensive information related to the consumer's estimated out-of-pocket costs. For example, if a consumer enters a single CPT code for a procedure or treatment, without identifying the site of service where the procedure will be performed or the treatment will be provided, it will be difficult for the Health Plan's on-line tool to provide useful information related to the consumer's estimated out-of-pocket costs. If the procedure or treatment will be provided as an inpatient service, the Health Plan would have difficulty providing an accurate facility-based cost estimate to the consumer based on a single CPT code because inpatient services are typically billed using DRG codes. If the procedure or treatment will be provided as an outpatient service, the consumer would have to be able to identify all applicable CPT codes and look them up individually in order to be able to get an accurate estimate for their total cost of care.

* Recognize providers may bill differently for the same service and that the service received may be different from the service searched. Therefore, relying on one billing code search result may confuse and mislead an enrollee if they receive a bill based on billing codes that are different from the estimate generated by the Health Plan's on-line tool.

Sapphire Digital's episode of care approach provides the enrollee with a consumer-friendly, good faith estimate of their out-of-pocket cost based on all costs for items and services typically associated with a procedure or treatment. In part due to the push by the Centers for Medicare and Medicaid Services ("CMS"), many payers have moved away from fee for service and have started paying for value instead of volume through various alternative payment models. Therefore, Health Plans should be allowed to:

1. display cost-sharing information for all costs associated with a procedure or treatment as a bundle, even if the Health Plan does not pay for such services through a bundled payment arrangement; and

2. capture and display cost-prices for services that are part of a bundled, capitated, episodic or outcomes-based arrangement between a provider and a Health Plan in a way that is easy for an enrollee to understand.

For example, in providing the consumer's estimated cost for a knee replacement procedure, Sapphire Digital would display a bundled cost that incorporates all of the expected components related to the procedure, including but not limited to the professional component, facility fee and anesthesia costs. Sapphire Digital's bundling approach takes all of the relevant billing codes into account, to provide the enrollee with a consumer-friendly, good faith estimate of their out-of-pocket cost.

(2) Requirement to disclose negotiated rates: Under the Proposed Rule, the Health Plan is required to provide negotiated rates reflected as dollar amounts for each covered item or service that is furnished by an in-network provider. However, in the background section of the Proposed Rule, the Departments cite to the success that the State of Kentucky has had with its price transparency program that allows its enrollees to shop for their healthcare and share any cost savings realized. The Program cited by the Departments is Sapphire Digital's SmartShopper Program. The Program for the State of Kentucky uses our standard protocol for cost transparency (cost displayed for the entire procedure bundle) and does not display negotiated rates to enrollees for cost transparency purposes. The State of Kentucky's success exemplifies how cost transparency can be effective with the use of cost bundles and without the display of negotiated rates.

Our Concern: Sapphire Digital believes the Proposed Rule could be improved to ensure consumers are provided with the type of actionable, simple, and personalized information they need to make more informed decisions. Rather than achieving the goals of the Proposed Rule to provide consumers with tools to make price-conscious decisions that will promote competition and lower health care costs, the required changes that Health Plans will have to make will be disruptive and ultimately not helpful for consumers.

We believe the Departments should consider the unintended consequences of publicly providing a list of in-network negotiated rates, which will not provide meaningful insight into what an insured individual might be required to pay out of-pocket.

Ultimately, consumers want to know what their out-of-pocket costs will be. Health Plans should be permitted to provide cost ranges for the full grouping of services that a consumer is likely to receive with respect to identified procedures or treatments in a consumer-friendly format, rather than just requiring negotiated rates be provided for every individual item or service.

(3) Requirement that Health Plans Disclose Negotiated Rates and Out-of-Network Allowed Amounts in Machine Readable Format on A Public Website Will Not Be Helpful to Consumers

The Proposed Rule's requirement to provide negotiated rates and out-of-network allowed amounts in machine readable format on a public website would not result in consumers being provided with the type of actionable, simple, and personalized information they need to make more informed decisions. As discussed below, we believe solutions such as enrollee-specific cost estimators are far more useful.

Our Concern: Publicly providing a list of in-network negotiated rates and out-of-network allowed amounts will not provide meaningful insight into what a consumer might be required to pay out of-pocket. First, CPT codes and modifiers are used by medical and billing experts. Most consumers will not be able to digest this data and make it useful. Many do not understand CPT Codes, what CPT modifiers should be applied, and the formal procedural names listed in the data set. Many items and services have different variations depending on complexity, unique medical and patient requirements and physician billing patterns. Once different insurance products and networks are put into the mix, this information becomes even more confusing.

Furthermore, consumers ultimately want to know what their out-of-pocket costs will be. This data, whether displayed by a third-party vendor to the end consumer or viewed directly by the end consumer, would not consider the consumer's coverage under their benefit plan, where they are in their deductible, or how much cost sharing (co-pays or co-insurance) would be required. A personalized estimate that a Health Plan can provide, taking into account reliable quality data on each in-network provider, would be the most useful information for an enrollee.

Moreover, Sapphire Digital has significant concerns about the requirement for Health Plans to display data on out-of-network providers. Any data displayed on out-of-network providers may not be reliable. Health Plans are not required to maintain accurate data on the out-of-network providers. Moreover, in our experience, Health Plans are challenged to maintain accurate data on their in-network providers. Health Plans will be especially challenged to maintain data on out-of-network providers. Additionally, the maximum allowed amount of a particular Health Plan does not guaranty that the out of network provider will accept that amount and in turn, will pursue the enrollee for amounts owed above and beyond the allowed amount. Therefore, the further proliferation of this data in the marketplace may in fact confuse the consumer, direct the consumer to the wrong provider and disincentivize shopping.

In part due to the push by CMS, many payment models have moved away from fee for service and have started paying for value instead of volume through various alternative payment models. Under the Proposed Rule, it is not clear how these arrangements could be captured and displayed, which could potentially confuse consumers and further perpetuate the fee for service models.

Further, providing third parties that are not governed by the Health Insurance Portability and Accountability Act ("HIPAA") with access to certain data presents a privacy and security risk to consumers that utilize those applications. Third party applications not subject to HIPAA may not be required to protect the data in the same way business associates such as Sapphire Digital are required to do. Moreover, third party applications may be able to collect and commercialize the user's private data. While consumers may not understand the ins and outs of HIPAA, they have a general sense that they have privacy rights when it comes to their healthcare information. Without privacy and security standards for third parties that are comparable to HIPAA, the information that is protected so carefully by covered entities and business associates may be vulnerable and/or for sale. Sapphire Digital strongly suggests that the Federal Trade Commission ("FTC") develop a privacy and security framework for the health applications accessing this data that is at least as restrictive as the HIPAA privacy and security standards before permitting these third parties to have access to this data.

Health Plans, including our clients, have taken significant steps towards increasing the availability of meaningful price information, including on-line transparency tools that are coupled with telephonic support. These tools integrate data and personalized service to support consumers. The public disclosure of the dataset as proposed will not eliminate the need for health insurance providers to provide timely, accurate and personalized cost-sharing information. If a consumer looks at an individual price, he or she may believe they have an exact price for the procedure, and he or she may be very surprised when they receive the ultimate bill. Health Plan tools have been created to help avoid this confusion. We ask that the administration eliminate the requirement that Health Plans disclose negotiated rates and out-of-network allowed amounts in machine readable format on a public website, and instead allow the Health Plans to keep innovating and improving the consumer-focused tools already in the market, such as Sapphire Digital's CareSelect Platform./3

PROPOSED IMPLEMENTATION TIMELINE IS NOT FEASIBLE/4

Sapphire Digital, as one of the leading vendors in the healthcare transparency industry, has significant concerns that the implementation timeline of one year from rule finalization is not feasible. The Proposed Rule is operationally complex and requires new technology and data sets to be built and tested by Health Plans. Sapphire Digital worries that the timing requirement may undermine the effectiveness of the Departments' effort under the Proposed Rule. We strongly recommend that the Proposed Rule not go into effect until at least 2 years from finalization for the following reasons:

* There are not many vendors in the healthcare transparency space that will be able to implement the Proposed Rule in such a short timeframe. Moreover, Health Plans are not able to contract with just any vendor to satisfy the requirements of the Proposed Rule. Because they would be providing services to HIPAA covered entities, vendors will be required to meet certain privacy and security standards (such as HITRUST certification/5) in order to operate in this space. Furthermore, many Health Plans currently require their vendors providing such services to be certified by the National Committee for Quality Assurance ("NCQA")/6 and this should not be discouraged due to the short timeframe in which Health Plans will have to implement the Proposed Rule.

* Sapphire Digital understands that prescription costs are a key component of a consumer's out of pocket costs. However, at this time, most Health Plans rely upon a separate consumer portal/tool of the Pharmacy Benefit Manager ("PBM") to provide the enrollees with prescription cost information. The Health Plan and PBM systems have different technical infrastructures that cannot readily interface with the current systems in place for medical services. Therefore, Sapphire Digital requests that the requirement that drug pricing information be included with an individual's estimated cost sharing liability be removed from the Proposed Regulation at this time. We request that CMS work with Health Plans, PBMs and vendors such as Sapphire Digital to come up with a strategic and thoughtful approach for incorporating applicable pharmacy data into the Health Plan's on-line tool or through other means, such as by allowing the Health Plan's on-line tool to link to a separate PBM system.

* Moreover, Sapphire Digital provides cost transparency tools for almost 50 health insurance issuers, including licensees of the Blue Cross Blue Shield Association ("BCBSA"). The vast majority of those Blue plans rely upon the BCBSA's National Consumer Cost Tool ("NCCT") to help enrollees understand and estimate costs. For certain procedures, NCCT utilizes a cost range for the total cost associated with the episode of care in order to simplify how the cost information is provided to the consumer. If the Proposed Rule goes into effect, Health Plans, such as the Blue plans using the NCCT, will be required to make significant changes to how they approach cost transparency through their existing consumer tools. This will require the investment of a significant amount of time, effort and resources by the Health Plans in order to comply with the Proposed Rule and is unlikely to be operational within one year of rule finalization.

Sapphire Digital appreciates this opportunity to comment on these important provisions in the Proposed Rule. Should you have any questions or wish to discuss our comments further, please contact me at (201) 696-3006 or [email protected].

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Footnotes:

1/ More information can be found on Sapphire Digital and its products at https://www.sapphire-digital.com/. Additional information is also provided on the final page of this letter. For the Departments' reference, Sapphire Digital operates the SmartShopper Program, which is the shared savings program utilized by the State of Kentucky that is described in the Proposed Rule and in footnote 18. Sapphire Digital's SmartShopper Program is also referenced in footnote 82 of the Proposed Rule.

2/ SmartShopper is the shared savings program utilized by the State of Kentucky that is described in the Proposed Rule and in footnote 18.

3/ Additional information on Sapphire Digital's CareSelect product, and Sapphire Digital's other products is provided on the final page of this letter.

4/ Sapphire Digital's comments exclude the MLR provision from its request to delay implementation. Sapphire Digital believes the MLR provision should be implemented as soon as the rule is finalized and should be applicable for the 2020 MLR Reporting year.

5/ More information on the HITRUST certification can be found here https://hitrustalliance.net/hitrust-csf/.

6/ More information on NCQA can be located here https://www.ncqa.org/programs/health-plans/health-information-products-hip/.

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ADDITIONAL BACKGROUND ON SAPPHIRE DIGITAL'S CORE PRODUCTS

* CareSelect Healthcare Transparency Platform - Sapphire Digital's health care transparency and engagement platform brings consumer on-line shopping to health care, making it easy for members to search for providers and determine the cost of care. The CareSelect Transparency platform's fully integrated solution makes it simple for consumers to find care, understand health care costs and choose preferred options.

* SmartShopper - SmartShopper drives down health care costs for Health Plans and their enrollees by rewarding enrollees who shop for and select high-quality, lower-cost care. The SmartShopper incentive and redirection program allows consumers to shop for routine health care procedures on-line, or over the phone with a Personal Assistant. When consumers select a high-quality, lower-cost option, they receive a share of the savings in the form of a cash incentive or other reward. Health Plans save money, consumers save on their out-of-pocket costs and get cash back.

* Medical Expertise Guide - Sapphire Digital's Medical Expertise Guide ("MEG") program helps consumers make more confident decisions for routine surgical procedures. MEG provides access to composite quality scores to help consumers find the best surgeon and hospital combination for their surgery, at a predictable cost. Our clinically trained Surgical Concierges guide consumers through every step of the care journey, assisting with physician and facility comparison and selection, appointment scheduling, care coordination, incentive information, and pre and post procedure support. Our advanced analytics use claims data to allow Health Plans to customize surgical networks that best support their specific network and contracting strategies as well as support a member along their care journey through early notification and engagement.

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The proposed rule can be viewed at: https://www.regulations.gov/document?D=CMS-2019-0163-0002

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