Managed Care Contract Negotiations
Apr 21

How to use rate filings to your advantage

Rate filings are a valuable resource to help you understand a health plan’s financial situation and rates for services as you prepare for negotiations.

But most providers remain unfamiliar with these filings, where to obtain them, and how to utilize them to gain an upper hand in contract negotiations and reimbursement.

To help you understand these filings and assist you in using them to your advantage, think of them as a number that contains multiple components, each with its own significance. Following are tips to keep in mind:

  • Rate filings are made up of payment rate assumptions for individual components (e.g., inpatient days) as well as utilization assumptions.
  • The payer estimates what rate they plan to pay per thousand people for each service. They then estimate what the utilization assumption is, or how this service will be used per thousand, based on what the past utilization history is.
  • That figure is then divided by one thousand to get a rate amount for each individual, and then the subsequent amount is divided by 12 to get the per-month figure. The final rate filing is made up of calculations like this for more than 50 components including hospital visits and procedures.
  • Viewing the simple rate filing data available from the state insurance commissioner can, if understood properly, provide insight into profitability increases, rate fluctuations, and other key negotiating information that would otherwise be missed.
  • This week’s tip was excerpted from HCPro’s monthly newsletter, Managed Care Contracting & Reimbursement Advisor. For more information, click here.

    About Reed Tinsley, CPA

    As a top advisor to physicians, I help increase practice profits by delivering hands-on, expert medical accounting/tax support, practice counsel, and revenue-building strategies. Read more →