Cash-pay surgery at bundled prices is a growing trend in the U.S. But it’s not only for consumers. Employers are very interested in contracting directly with hospitals and ASCs to contain costs. Learn how it works and what it takes to build and deploy a program outside of the Medicare model.

A growing number of U.S. hospitals and ASCs have been 1) hesitant to invest the effort to develop a cash pay surgery program; 2) worried that they’ll be taken advantage of if they negotiate bundled price surgery on the same “All Products” contracts that HMOs, PPOs and TPAs offer them; and 3) worried that the TPA, Medicare or PPOs and HMOs will see their case pay rates and not want to pay the usual and customary negotiated rates.  Under most insurance-based pricing, Hospitals and ASCs are expected to negotiate contracts with a variety of payer types according to the payers’ terms and conditions. But this product is different. 

Every hospital and ASC has the right to offer a different, separate product under its own unique terms and conditions. And that includes a cash-program and a bundled price surgery program that can be offered to group health plans sponsored by self-funded employers. 

Insurance-based pricing causes providers to absorb various transactional expenses, such as revenue management costs, costs associated with payment delays and compliance-related expenses. The requirements and duties beyond direct patient care erode margins or advantages associated with the maximum negotiated fees. In some cases, the performance requirements to get the money you’ve earned taking care of patients can turn the value of the contract upside down. 

Cash-pay pricing is (and should be) a different rate than the insurance-based price. The latter includes costs of labor intensity, payment delays and other administrative variables, while cash-pay prices only need to encompass the expenditure associated with collecting the cash and depositing it in the bank under the appropriate contractual terms and conditions. That won’t come on the third-party payor’s terms and conditions. Cash-pay /bundled pricing gives providers greater control over how their services are sold and excludes factors that influence price calculations, ultimately increasing the providers’ profit margin. 

To protect their interests, hospitals and ASCs need their own contract form agreements with unique and enforceable terms and conditions, plus other documents and infrastructure development to operate the program successfully and profitably.  This class covers all the points on the checklist and offers hospital and ASC executives and managers the practical tools, tips, and document outlines they need to be up and running in about 60 days’ time.