Hospital Shopping with Payer Compass RBP

An employer recently asked if there was any difference in the level of Medicare reimbursements for the two hospitals in their community.

Their broker sent 50 specific DRG codes and asked Payer Compass to compare the base Medicare reimbursements of each.

The data analytics wizards at Payer Compass came up with startling answers.  The regional hospital’s level of Medicare reimbursement was 29% less than the university hospital in the same community. In addition, the university hospital’s average billed charge was 432% of Medicare allowable versus 354% for the regional hospital across town.

The employer asked; “So what does that mean to our benefit plan in terms of actual costs?”

The answer: “Mr. Employer if you send your employee to the regional hospital, being reimbursed at 165% of Medicare allowable, the cost for that joint replacement would be 39% less than the same procedure at the university hospital paid through your traditional PPO network arrangement. Even if the university hospital decided to accept 165% of Medicare allowable their costs would still be 29% higher than your local regional hospital.


Daniel R. Meylan , Senior Vice President Broker Relations – Payer Compass