Using Reimbursement Data When Entering New Markets

Using Reimbursement Data When Entering New Markets

Improve Your Negotiation Strategy and Establish Favorable Market Rates

By Jennifer Keller

When talking to clients in the midst of scaling operations in a new market, the question of how to establish attractive market rates often comes up. Entering a new market with rates too high can be a deterrent for growth and setting the right rates can be challenging.

The right data, insights, and tools are key to identifying the sweet spot when setting rates and planning for payer negotiations.  

Often, payer negotiations are driven by a team’s working knowledge of the market rates, or based on insufficient input from outside consultants. In this post, we’ll discuss how to use reimbursement data effectively when entering new markets and preparing for negotiations. 

We’ll discuss what data is needed, what new insights can be found, and how the right data can help your organization grow more successfully.


What Data is Needed

All-Payer Claims 835 (remit data) is the ideal data to leverage for payer negotiations. All-Payer Claims Data (APCD) is a universal term used to describe any data source that contains multiple payers. It’s a dataset that enables detailed insight into patient movement throughout the healthcare continuum. 

However, APCD in its raw form is messy. To be effective, it must be de-duplicated using the patient ID, claim data, primary diagnosis, and/or procedure. It can also be helpful to layer in other datasets, such as Medicare, for enrichment.

What New Insights Can Be Found

Properly cleaned and processed APCD allows for metrics to be defined and opportunities to be understood. The end result can include the following:

  • A clean price per unit (PPU), which is not shown on a claim but is necessary for negotiations
  • Summaries of PPU by region and payer ID, including the following:
    • Ranges of rates within each region and for each payer
    • Blinded rates by provider within each region and for each payer
    • High-level distribution charts to illustrate claims 
  • Year over year rate comparisons to track increases and decreases
  • Insights into how current payer contracts compare to the market
  • Detailed comparisons of how reimbursement rates have changed over time from facility to facility

A tool created with the strengths of APCD in mind, such as Stratasan’s Market Reimbursement Analyzer (MRA), is often needed to pull these insights. Users of MRA will have access to quantifiable scoring metrics that ensure data integrity without complex modeling, in addition to quarterly data updates. A tool such as MRA can confirm you’re getting paid what you should be when entering a new market.  

How the Right Data Will Set the Stage for Success

Leveraging this intelligence, hospital planners can alter and improve their negotiation strategy. Backed by data that informs how their rates compare to the market—at times, proving their rates are too low—providers can more confidently approach negotiations.

We hear from some clients that, for the first time, they’re able to truly perceive how their rates compare to the market.    

Providers can walk away from their negotiation with a per-unit lift from their payer’s initial offering. In the end, this can result in a significant increase in reimbursement and an annual addition to the bottom line, just from a single-payer negotiation. 

The Takeaway

For more information about Stratasan’s APCD, and our Market Reimbursement Analyzer, a tool powered by APCD that can deliver these detailed reimbursement insights, then schedule time with one of our product experts today. 

With the Market Reimbursement Analyzer, our clients see real value from reimbursement data sooner than they ever thought possible. Find out how your reimbursements compare to the market—especially when entering new markets—for more empowered payer negotiations and competitive rates.

Article by Jennifer Keller, Director of Content Strategy for Stratasan

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