How to read a payer rate benchmark before your contract renewal
A benchmark is only useful if you know how to read it. Here is how we suggest practice owners and administrators approach one before sitting down with a payer.
Start with the codes that drive revenue
Most practices earn the bulk of their commercial revenue from a short list of codes. Focus the benchmark there. A gap on a code you bill twice a year matters far less than a small gap on your most common visit.
Use the median, not the average
Rate data has outliers: unusual contracts, data errors and rates tied to specific facilities. The median tells you what a typical practice in your market is paid and is much harder to argue with.
Compare like with like
- Same code and the same modifiers.
- Same place of service, since office and facility rates differ.
- Comparable providers in the same market, not a national figure.
Turn gaps into dollars
A percentage is easy to dismiss. A dollar figure is not. If your rate for a code is $18 below the market median and you bill it 2,400 times a year with that payer, the gap is worth $43,200 a year.
Rate gap × annual volume = what the gap costs you. Do this for each payer and each top code, then lead with the largest numbers.
Expect the payer's response
Payers may point to your network status, quality scores or the volume they send you. Having market data in hand keeps the conversation grounded in what comparable practices are actually paid.
Our Basic report organizes your top ten codes by payer so these numbers are ready before the meeting.