Leveraging Out-of-Network Payments for Improved In Network Rates: Specialty Imaging Group

Situation

A national leader in specialty imaging was taking over the radiology operations of a major health system in the southwestern US and sought to concurrently go in-network with the region’s major payers. The radiology group engaged Tribunus Health to lead negotiations, with the goal of achieving reimbursement rates equal to or above those the health system – with its extreme market power – previously received for the same services.

Challenge

UHC initially offered 100% of CMS to the new market entrant. While this opening offer was low, the outsourced radiology group lacked any data to inform the negotiation. It did not know the health system’s old rates, and it did not yet have any out-of-network (“OON”) billing history to understand the upward bounds of the in-network rate negotiation.

While the firm was willing to bill and remain OON throughout negotiations, the expense and hassle of the No Surprises Act IDR Process was not a viable long-term solution.

Approach

Using its price transparency tool, Tribunus Health identified the rates the health system had been receiving from the local BCBS plan: 140-145% of CMS, which became our target rate for UHC – traditionally a harder payer to negotiate with, especially in this market where it had equal market share.

After several rounds of negotiations in which we highlighted i) our knowledge of the health system’s rates and ii) the group’s higher quality and faster turnaround times, the Tribunus Health account team obtained an offer at 140%. Having reached our target – but without accepting the offer – negotiations moved to the contract language.

Solution

During a protracted fight over contract language, Tribunus Health’s analysts began a thorough review of the imaging client’s nascent out-of-network claims payments from UHC. These revealed that the group was already receiving significantly higher reimbursements from UHC for OON services.

Tribunus Health then circled back to the rate negotiation using the OON payment history to demonstrate the payer’s existing financial burden for these services. By highlighting the cost savings potential of shifting that OON volume in-network, Tribunus Health successfully negotiated to 169% of CMS.

Outcome

The strategy resulted in a significant premium to the health system’s in-network reimbursement rates, directly attributable to the leverage gained from the OON payments analysis. This significantly improved the group’s revenue while also offering UHC a more predictable cost structure, lower administrative expenses, and savings for both patient and payer. The client was able to achieve approximately a 20% increase over the original target rates.