Cost-Based Pricing
There are two ways to limit the maximum allowable amount of payment:
- cost-based pricing and
- charge-based pricing.
Which is better?
Charge-based "usual, reasonable and customary" (UCR) fees continue to increase at the rate of medical inflation. This approach has a flaw though - it simply keeps pace with the inflationary spiral.
Some payers are now using cost based data to set a reasonable limitation to maximum payments. HRGi can help you with the shift to cost-based pricing.
How does cost-based pricing work?
If your plan language will allow replacement of charge-based UCR maximums with a cost-based methodology, HRGi can price your claims according to CMS protocols and apply your determined percentile limitation.
For example, you may decide that 200 percent of APC Pricing will mark the maximum allowable payment for outpatient facility procedures.
HRGi can reprice claims according to CMS guidelines for most inpatient and outpatient facility, physician and ancillary claims including DRG, APC, ASC, RBRVS pricing methodologies. We’ll also apply your maximum allowable multiplier per your selected guidelines.
