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Tip of the week: Use utilization data to win an increase in payer rates

Managed Care Weekly Advisor, March 14, 2007

Utilization data, which collectively reflect a provider's efficiency and, in turn, the value they can offer a payer, is one stone that sometimes remains unturned during contract negotiations. Try these tips to use the data and get an increase in payer rates:

  1. Approach the payer for data. Ask the payer to tell you how your practice or facility is doing in regard to the related cost drivers. Ask for a comparison to your peers about various criteria such as length of stay in the hospital, pharmacy cost, ancillary cost, cost per patient, and cost per particular diagnosis code.
  2. Gather the data internally. Consider how your specialty drives healthcare costs. What decision-making do you do that could lead to efficient healthcare? Look to the hospital information system. Hospitals have good information, but providers rarely take advantage of this.
  3. Meet with the payer. Once you conduct this analysis, meet with the payer to present your utilization data and convey that you believe you drive costs lower than competitors in your network. Therefore, you believe that you deserve some kind of price increase.