Miami Children's Hospital Cuts Chargemaster Rates by 30%

Cheryl Clark, for HealthLeaders Media , January 20, 2014

Birkenstock says that for those contracts and billings that hinge, or are roughly based on some percentage of the Chargemaster's listed prices, payments indeed will be 30% less, resulting in a drop in revenue of $10 million a year.

The cuts will most directly benefit self-pay patients, those with no health insurance coverage, who are billed the Chargemaster rates, and who may or may not be able to negotiate downward from that.

Making it Revenue-Neutral
To make up for that lost revenue, he explains, Miami Children's is now renegotiating with health plans such as Blue Cross, Humana, and UnitedHealth. For a network negotiated rate with a plan that is loosely based on a 50% discount of the Chargemaster price now, for example, renegotiation may result in a lower discount offered to that plan. In that way, the hospital's revenue will not drop.

"I expect to do all of this and make it all revenue-neutral," Birkenstock says. "Although some contracts may go up, and some may go down. We aren't going to change our budget because of the 30% rollback."

He adds that many other hospitals are making similar adjustments to their Chargemasters to more fairly reflect cost and value within their organizations.

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