Sample Hospital Contract


Our readers may find this interesting. Below is a sample hospital contract rate page send to us by a major hospital chain. We have reviewed numerous PPO hospital contracts in the past several years, from multiple payers, and can tell our readers that all of them look almost exactly like the one posted below. Just fill in the blanks.


    Criteria Rate Legend
1 Medical/Surgical     PD
3 Obstetrics      
4 Vaginal Delivery 1-2 days   FF
5 Vaginal Delivery with Sterlization and/or D&C 1-2 days   FF
6 C-Section Delivery 1-3 days   FF
7 C-Section Delivery with Sterilization and/or D&C  1-3 days   FF
8 Additional Day(s) Mother Only      PD
9 Normal Newborn     PD
10 Carve Outs/Pass-Throughs      
11 Implants/Medical Devices     BC
12 Pharmaceutical Drugs     BC
13 Catastrophic      
14 Threshold     BC
15 Payment Basis     BC
17 All Outpatient     BC
BC = Billed Charges      
FF = Fixed Fee        
PT = Per Treatment      
PD = Per Diem        
These footnotes are an integral part of the rate sheets          
  Service Description MS-DRG(s) Rev Code(s) ICD-9 / CPT Code(s)
Line INPATIENT        
1 Medical/Surgical     100, 101, 110, 111, 112, 113, 114, 116, 117, 120, 121, 122, 123, 124, 126, 127, 130, 131, 132, 133, 134, 136, 137, 140, 141, 142, 143, 144, 146, 147, 150, 151, 152, 153, 154, 156, 157, 160, 164, 167, 169  
2 ICU/CCU/NICU/PICU/TELE (MICU, SICU, NICU, CICU) This rate applies to all days baby is in NICU.   172-174, 200-204, 206, 209-213, 214, 219  
3 Obstetrics If baby is admitted to NICU during specified length of stay, NICU rate will be paid in addition to case rate. OB case rates reflect pricing for the obstetrical service of delivering. Hence, payment of full amount of case rate will be made regardless of the status of the newborn.      
4 Vaginal Delivery   768, 774, 775    
5 Vaginal delivery with sterilization and/or D & C   767    
6 C-Section Delivery   765, 766    
7 C-Section delivery with sterilization and or D & C   765, 766   ICD-9 codes 66.2 – 66.4
8 Additional Day(s) Mother Only This rate applies if Mother’s stay exceeds the case rate day criteria.       
9 Normal Newborn This rate is paid in addition to the Obstetric case rate.   170, 171, 179  
10 Carve Outs/Pass-Throughs Implants/Medical Devices and Pharmaceutical Drugs as defined below are reimbursed as an add-on to ALL services unless noted otherwise.      
11 Implants/Medical Devices Hospital will be paid for covered implants, medical devices, prosthetics, pacemakers, seed implants and stent(s), as an add-on to ALL services herein when billed with revenue codes 274, 275, 276, 278 and 279 identified on submitted UB forms at the specified BC percentage. No invoice is required.   274, 275, 276, 278 and 279   
12 Pharmaceutical Drugs Hospital will be paid for covered pharmaceutical drugs, as an add-on for ALL services herein when billed with revenue codes 252 or 636 identified on submitted UB forms at the specified BC percentage. No invoice is required.   252, 636  
13 Catastrophic For any case where total hospital charges are greater than the rate sheet threshold, reimbursement will be at the rate sheet specified percentage of BC effective from the first billed dollar for the entire case. Gross charges associated with Revenue codes 274, 275, 276, 278, 279, 252 and 636 as defined in the implant and pharmaceutical drug reimbursement sections are included in the Catastrophic Threshold calculation and shall be paid at the applicable Catastrophic Payment percentage of BC.       
14 Threshold The minimum amount of gross billed charges that qualifies a case for payment under the catastrophic clause.      
15 Payment Basis The percent of reimbursement applied to the total billed charges qualified by the threshold.      
16 OUTPATIENT Outpatient includes all services provided by hospital billed as outpatient. Implants/Medical Devices and Pharmaceutical Drugs as defined below are reimbursed as an add-on to ALL services. The Outpatient service categories below are additive unless noted otherwise.       
17 All Outpatient All services performed during the stay.       


Editor’s Note: In our opinion, self-funded employer groups should negotiate directly with hospitals with the intent of paying a fair and reasonable rate agreed to by both parties. However, from the payer’s perspective, the following items need to be addressed: (1). Right to audit must be included (2). Outliers must be removed (3). Discounts off imaginary and inflated numbers must be removed entirely and (4). Contract must be publishable.

Comments are closed.