What Are You Really Paying For?

Ever wondered why healthcare costs seem impossible to understand?

Navigating healthcare costs can feel like a maze. How can you tell if you’re paying a fair price? Comparing the cost of a colonoscopy to that of a new watch or vet visit hardly feels relevant. And yet, many consumers are left without a clear baseline to understand what’s reasonable. 

When comparing the costs of medical services across different payers, Medicare rates often serve as a primary benchmark. By assessing Medicaid and commercial rates as a "percent of Medicare," patients and providers can better understand relative costs. Our models create these benchmarks by analyzing negotiated rates for each provider and facility from all payers, directly comparing them to Medicare rates. 

Real-World Insights: How Medicare Rates Expose Overcharges 

Recently, a third-party administrator (TPA) used our platform to uncover insights into healthcare reimbursement, finding that commercial payment rates for radiology and neurosurgery services were 180% and 220% of Medicare rates, respectively. Emergency and critical care services saw even higher rates, averaging 250% of Medicare. 

Did you know? Medical costs vary by 200% from one provider to another, even for the same service

Our TPA partner used these benchmarks to uncover potential overcharges and determine whether provider rates were reasonable. When guiding a self-insured employer member to a high-quality anesthesiologist, the TPA saw a staggering 300% markup on Medicare rates for CPT code 00400. Using our proprietary quality of care metrics – such as clinical experience, readmission rates, and patient outcomes – they evaluated the cost-to-quality tradeoff. As such, they identified alternative providers with comparable, if not slightly lower, levels of experience and patient satisfaction at half the price.

This approach empowers TPAs and members to uncover hidden pricing inefficiencies while carefully weighing cost against quality. The result? Substantial savings without sacrificing the standard of care. Want to dive deeper? Check out our Quality of Care framework.

Mastering Negotiations: How Medicare Data Drives Fair Pricing 

Medicare benchmarks equip TPAs with the knowledge to negotiate fair reimbursement rates with healthcare providers. Instead of defaulting to inflated commercial prices, TPAs can use Medicare rates as a baseline to secure reimbursement caps or discounts. 

Beyond negotiations, TPAs help self-funded employers implement Reference-Based Pricing (RBP) models. In these models, employers agree to pay a fixed percentage of Medicare rates for specific services. For example, they may set a cap at 150% of Medicare rates for inpatient care, enabling them to control costs and minimize surprises by aligning payments. 

Ready to Take Control of Your Healthcare Costs? 

Reach out today! We’re committed to helping you track utilization patterns and compare healthcare costs to Medicare data over time. From high-cost procedures like advanced imaging to specialty care, we provide actionable insights to ensure you make informed decisions and manage expenses effectively.