Overcoming Significant Rate Reductions and Crisis Resolution
The Issue
A major insurer enters negotiations with a Southern hospital looking to lower contract rates. The insurer initially proposed a rate reduction of nearly 15%. The insurer made a claim that our client, a hospital with over 500 beds, had contract rates that were among the highest in the entire state. Our client knew their rates might be a bit high, but not by 15%. Our client did not have the contract rate intelligence to challenge the insurer’s claim with any certainty. The hospital was reluctant to sign the contract with the lower rates. Contract negotiation dragged on publicly for months with the very real possibility that our client would be forced out-of-network.
The Results
FlexPoint was deployed by the hospital six weeks before a final deal had to be reached with the insurer. Our assignment was to procure and provide our client with the actual reimbursement rates that each of the hospitals in the local market had most recently negotiated with the insurer. FlexPoint was successful at procuring and delivering the requisite contract rate intelligence for our client within four weeks. Our data gave our client the data they needed to confidently confront the insurer and call their bluff. In the end, our hospital client negotiated a very reasonable multi-year contract, keeping them in-network, still maintaining strong price position in their market, and ending a long drawn out public relations nightmare. Total return on investment for the engagement was significant for our client and the project investment in our services was less than $50,000.