Yesterday we met with a TPA from California who confirmed what we thought we already knew. His firm processes hospital claims at 130% of Medicare and gets very little push back from hospitals.
In Texas, we see the comfort margin with some hospitals between 135-150% of Medicare. Yet, we see managed care claims repriced to much higher Medicare reimbursment levels, as high as 280% or more for in-patient services and 1000% or more for out-patient charges.
Managed care contracts are cost drivers, not cost savers, it seems. Managed Care Under Siege
On the other hand, we know of an East Texas hospital who, during a competitive RFP process, offered a direct contract with reimbursment levels generally below Medicare rates.
Pricing is all over the board and there seems to be no rhyme or reason other than geographic area and astute payers or lack thereof. But when push comes to shove, the magic number appears to be between 130-150% of Medicare.
Editor’s Note: Balance billing threats are easily combated. Acceptance of an Assignment of Benefits creates an implied contract.