PMMC Charge Code Rate Setting.

Understand how a chargemaster adjustment impacts net revenue with a thorough CDM pricing project. Each hospital's unique case-mix, the practice patterns of its medical staff and the various payer contractual terms make it essential that chargemaster pricing adjustments are modeled appropriately to predict an accurate net revenue.

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Due to the number of charge codes in the Chargemaster and the complexity associated with the inter-relationship between charge codes and billing (DRG codes, Service Groups, etc), manually adjusting rates for individual codes in Chargemaster is not efficient or effective. This is the fundamental reason PMMC developed a software application for Chargemaster Rate Adjustment Modeling – PMMC REVENUEMASTER.

Leveraging Technology

PMMC REVENUEMASTER is a proprietary Chargemaster Rate Adjustment Modeling application. It was built using the latest Solver / MS SQL Server platform. Solver technology provides the ability to build multiple criteria or constraints for modeling purposes.  By taking into consideration all of the relevant information, it is able to generate revenue maximizing pricing, while remaining defensible and transparent.

Market Pricing as the Guiderails

PMMC's Chargemaster Rate Adjustment and Net Revenue Modeling is unique in that it begins with the incorporation of accepted recommendations from the hospital's Strategic Market Pricing review, and then the development of specific line item changes to the organization's Chargemaster rates to achieve objectives related to net revenues, overall price increases and service specific pricing relative to market.

Determining the Pricing Objectives

PMMC works with each client’s management team to determine the primary price adjustments objectives and includes parameters such as competitive pricing targets for inpatient and outpatient services, as well as net and gross revenue parameters for budgeting purposes. These objectives and parameters are often referred to as modeling constraints and can include scenarios such as:

  • Overall conditions such as gross revenue targets and minimum and maximum adjustments that achieve the desired net revenue.
  • Code level conditions such as minimum and maximum pricing changes by specific code or code category.
  • Comparison conditions of benchmark data, such as market rates, Medicare, or other payer payment rates, and/or unit costs with user-defined mark-up criteria.
  • Relationship conditions including charge codes where rate changes should move in tandem to maintain established relationships (levels of care, ER, OR, observation time, lab panels, etc.).
  • Category constraints such as price position objectives by clinical service category (cardiology, obstetrics, etc.) or revenue code/cost center.