CCC Medicare Benchmarking: Helping Insurers Determine Appropriate Costs When Evaluating Submitted Medical Bills
Medical billing amounts have exponentially increased in recent years. Inflation often seems untethered to reality, with unpredictable billing variations, even for the same procedures at the same locations. The coronavirus pandemic shined new light on these pricing fluctuations, with reports showing a total billing variation of 2,700 percent for diagnostic testing.
There is also a large discrepancy between what facilities and providers bill for services compared to what they accept as payment in practice. When evaluating negotiated prices against Medicare reimbursement rates for the same procedures and facilities, a 2019 RAND Corporation research report found relative pricing variations ranging from 150 to 400-plus percent of Medicare rates.
Relative prices also varied between states, falling within the range of 150 to 300-plus percent of Medicare rates. Additionally, researchers found that average relative prices for outpatient services were much higher than inpatient services in most states — 293 percent vs. 204 percent of Medicare rates.
To help insurance adjusters make consistent settlement recommendations, CCC is adding Medicare-indexed benchmarking to its Third-Party Casualty solution.
How CCC Medicare Benchmarking Works
With Medicare Benchmarking, insurance carriers will have billing configuration flexibility at the state level. Insurers can select either Medicare, FAIR Health or Fee Schedule as a price benchmark (where available), with Medicare multiplier configurations in 0.5x increments from 1x through 5x.
Insurers can apply these price benchmark configurations and Medicare multipliers on a per-state basis. For example, they could use Medicare Benchmarking at 2x for California, 3.5x for Texas and then choose FAIR Health or Fee Schedule for Pennsylvania. Adjusters can also modify Medicare multipliers on one or more lines to easily adjust considered amounts during negotiations. CCC provides further configuration by bill type — facility vs. non-facility. So, for example, insurers could apply price benchmark configurations for hospitals at 2.5x and individual providers at 2x.
Diagnostic Group Billing (DRG) is used for all inpatient stays, enabling a more efficient and transparent assessment of the entire inpatient stay rather than by individual bill lines. For outpatient billing, carriers can choose between Outpatient Prospective System (OPPS) and non-OPPS (the default) billing in their configurations.
With multiple pricing configurations set by the carrier, adjusters can modify multipliers to meet the unique characteristics of each individual claim. Paired with CCC’s ability to provide powerful analytics to track the procedures being modified, adjusters will have the flexibility and knowledge they need to apply discretion when evaluating and negotiating the costs considered as part of the submitted medical billing.
CCC Medicare Benchmarking Benefits
CCC’s Third-Party Casualty solution will provide several unique Medicare Benchmarking benefits to help deliver a better claims experience:
1 – Flexible Configurations
CCC will enable comprehensive, package-level medical bill review, including state-level configurability by multiplier, provider type (i.e., inpatient, outpatient, individual provider) and more. This provides a greater range of options for adjusters beyond purely on/off configurations across U.S. regions.
2 – Improved Consistency
With multiplier configurations in 0.5x increments on a per-state basis, adjusters can more consistently evaluate and negotiate casualty claim medical specials.
3 – Clear methodology
Insurance adjusters need a clear methodology to enable more effective review of the considered medical specials with providers, attorneys and claimants. Medicare Benchmarking eases adjuster negotiations by leveraging a nationally available price benchmark that is familiar to medical providers and others involved in the claims process. Adjusters can point to the specific multiplier used to calculate an adjustment, making it easier to explain recommended amounts.
4 – Adjuster Modifications
With CCC’s Medicare Benchmarking, the insurance carrier will select their desired Medicare multiplier. Adjusters can then use or modify the displayed Medicare multiplier by bill line. Billed amounts or custom values can also be used.
Medicare Benchmarking will be enabled delivered through CCC’s third-party casualty claims solution. Optimized to the needs of the adjuster, CCC’s Third-Party Casualty solution provides consistent and efficient package-level treatment of injury claims, as well as business analytics and what-if modeling.
Visit CCC’s Third-Party Casualty page to learn more.