Earlier this month the Division of Health Care Finance and Policy (DHCFP) marked an important event – the first filing of total medical expense data as required by Chapter 288. Of all the new data the agency is collecting, total medical expenses (TME) may be the most interesting with respect to tracking medical spending and the Commonwealth’s cost containment efforts.
But what is TME? Roughly speaking, TME represents the total cost of care to health plans for the patient population they cover. This number includes not only payments for medical claims, but also payments such as pay-for-performance and provider care management. TME may help to identify providers who are especially good at managing care, as well as geographic areas with unusually high or low spending on health care. TME may also help indicate which medical services are contributing the most to health care costs; and reveal whether managed care patients have higher or lower overall costs than non-managed patients. Over time, TME data will allow the Commonwealth to track the success of cost containment efforts and growth rate in medical spending by provider group, geographic region, and statewide.
Since last fall, DHCFP has been working with payers and other stakeholders to develop regulations related to the calculation of TME and to ensure the smooth reporting of this data. We convened a technical advisory group, elicited feedback regarding our proposed methodology in a consultative session, and received testimony during the public hearing process. All of this input was invaluable in developing and refining our methodology and data specifications. I would like to thank payers for their assistance as we become the first state in the nation to collect this data.
I would like to thank payers for their collaboration in developing regulations for relative prices, which will be yet another tool contributing to health care cost transparency. We anticipate finalizing these regulations shortly.
We look forward sharing our analysis of TME with residents of the Commonwealth in the months to come.
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