Side by Side Simulations

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Using KREG’s Contract Management Analytics (CMA) to negotiate managed care contracts is probably the fastest way our clients improve their bottom line. Clients face increasing pressure to find creative ways to modify contract terms, not merely look for rate increases. CMA provides hundreds of calculation scenarios across 29 different calculation basis points.

Here’s a quote from one of our clients about how they use our system during negotiations with payers 

Our contract negotiations are fairly straightforward. We have notebooks of cost and profitability reports by clinical service line and procedure from the Kreg system to show the insurance company. Our analyst is in the next room linking to Kreg’s Contract Management system. When the insurer makes a proposal we run it through the system and show the insurer the results right on the spot. Conversely, when we propose something we show them the results. It doesn’t take nearly the time it used to before we had all that information and we are more likely to come up with a win-win pricing structure.Managed Care Director, of KREG Client

Below is an example of the side-by-side comparison of the impact of all the simulations/scenarios that occurred during a quick negotiation with one payer. The report breaks out inpatient/outpatient lines of business as well as the service lines within each patient type. The starting point of any negotiation is the validated expected payment of your existing contract which represents your starting point or base line. This report shows the payer started with a 2.2% increase and by the time the negotiation was completed, our client received a 6.5% increase. The end result is the client will receive an additional $750,000 in net revenue each year for the next two years of the contract. The client also generates these side-by-side reports showing expected payments and profitability.

Figure 1FOTM 15 05 Side by SideFig1



The CMA system helps “let you know, what you don’t know” about all of your contracts. You will know exactly how much you are making on each payer contract, by patient type (e.g. inpatient, outpatient) and by service line (e.g. med/surg, maternity, ambulatory surgery, etc.). As we continue the transition to value based reimbursement, it is very important to continue to maximize your fee for service reimbursement.

For clients that don’t license the Kreg Contract Management Analytics system, contract modeling and simulations can be provided on a consulting basis.