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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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