Chargemaster Analysis

Managers of physician practices, chiropractic clinics, therapy practices, or imaging centers should understand how the charges they bill compare to those of other, similar providers in their areas. Knowing the usual, customary, and reasonable (“UCR”) charges can help facilitate timely payments, resolve payment disputes, and maximize revenue.

Research & Planning Consultants (“RPC”) has the data and experience necessary to calculate the UCR charge for each line item on a chargemaster and to help make proactive adjustments by comparing the chargemaster and the UCR charges in specific markets. We have a multidisciplinary team and substantial data management resources that enable us to handle large cases efficiently and on a tight schedule. RPC has identified five areas in which comparing a practice’s charges to UCR benchmarks can produce substantial benefits.

• Balance Billing Laws

Thirty-one states[1] have laws in effect which limit the ability of providers to “balance bill” the patient for any outstanding amount above the allowed amount paid by an insurer for out-of-network services in some or all circumstances. Many state laws set UCR limits on the amount insurers must pay for out-of-network services. Medical practices can receive more timely payments, with fewer payments disputed, by knowing how their charges compare to UCR benchmarks.

• Independent Dispute Resolution for Out-of-Network Bills

When health plans and patients disagree with medical providers about fair payment for out-of-network medical bills, many states mandate a binding independent dispute resolution (“IDR”) process. These laws often instruct independent arbiters to determine a fair payment based on UCR charges in the market, sometimes along with other metrics. Medical practices should know how their charges compare to UCR benchmarks to know what offers to make or accept when resolving disputes.

• Personal Injury Protection Laws

Many states either require or have optional Personal Injury Protection (“PIP”) coverage as part of automobile insurance.[2] These policies cover the insured party’s injuries regardless of who is at fault in an accident. Unlike health insurance, few providers are in-network for PIP plans. Most care is by out-of-network providers, and payment is based on the automobile insurer’s payment policies and dispute resolution processes. UCR benchmarks are frequently the basis for payments under these policies and processes. Medical practices should know how their charges compare to these benchmarks to ensure they receive maximum payment according to policy rules and know when to pursue dispute resolution or litigation.

• Price Transparency Laws

On October 29, 2020, the Centers for Medicare and Medicaid Services issued a final rule requiring many insurers to provide price and cost-sharing data to plan participants. This rule will force health plans to publish their negotiated rates. Some states have their own price transparency laws. Practices that are not subject to state price transparency laws will be subject to the federal law. With greater price transparency, practices should know how their charges compare to competitors’ and have an opportunity to make adjustments before making their charges public.

• Revenue Maximization

Medical practices should regularly analyze and update their chargemasters to maximize practice revenue. Health plans basing allowed amounts on UCR benchmarks will pay the lesser of billed charges or the UCR benchmark. Practices that charge below the UCR benchmark will be paid less than the health plan was willing to pay. Not knowing how charges for each service compare to UCR benchmarks may leave money on the table.

How RPC Can Help

Contact us today to discuss our chargemaster analysis services and how we can help your practice maximize payments with minimal delays, difficulties, or litigation.

[1] https://www.commonwealthfund.org/publications/maps-and-interactives/2020/nov/state-balance-billing-protections.

[2] https://www.allstate.com/tr/car-insurance/personal-injury-protection-coverage.aspx.

Read RPC’S Determining Usual, Customary and Reasonable Charges for Healthcare Services Whitepaper