Hidden Surcharges Calculator For Healthcare Payers

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March 8th, 2014

For healthcare payers and patients, value for money remains a key driver in selecting medical providers and treatments. Value plays an even bigger role for employers whom sponsor their employees' health insurance plans. 

Recently, our friends at The LeapFrog Group developed a tool that aims at helping payers - specifically employers - identify the hidden charges behind the medical bills they're paying for. The Hidden Surcharges Calculator, was introduced by President and CEO of The Leapfrog Group, Leah Binder, last summer at a World Health Congress seminar. Ms. Binder described the calculator as a tool that allows healthcare purchasers the ability to calculate how much money is being spent on unnecessary costs due to medical errors that occur during a patients treatment at a medical providers facility.

Hidden Surcharges Calculator

"It's counterintuitive and outrageous, but you will pay a lot more for hospitals that have more errors, accidents and infections," said Ms. Binder. "Errors aren't typically marked as a line item on a bill - but purchases and consumers are paying millions of dollars for them, and we've substantiated it with our research."

How It Works

The calculator allows employers to enter claims data and estimate annual hidden surcharges based on the providers Hospital Safety Score - a resource The Leapfrog Group launched in 2012. In its development, The Leapfrog Group utilized official data to determine the costs of medical errors, accidents and injuries occurring in US Hospitals. These errors were divided into "disclosed" and "undisclosed" errors. In conjunction with a facility's Hospital Safety Score, they were able to predict hospital performance on several key undisclosed errors. The developers also ensured to account for medical inflation and cost-shifting.

For example, when a patient is admitted to a hospital with a grade of C or lower, purchasers could pay up to $7,780 in hidden surcharges due to medical errors. An employer with 1,000 hospital admissions for a similar patient per year ends up paying a hidden surcharge of more than 7.7 million dollars. To most employers who sponsor their employees' health insurance, this becomes quite a problem.

Payers and patients could combat these surcharges simply by choosing a provider with a higher safety rating. Furthermore, payers should collaborate with their health plan and benefits administrators to ensure members are sent to the best-rated providers in their network.

Here at PayerFusion, we utilize the Hidden Surcharges Calculator to assist in our plan design for employers looking to self-fund their employee's health insurance. To download the calculator and learn about the formulas used to calculate these charges, click here.

Or, download The Leapfrog Group's white-paper on Hidden Surcharges.

For employers interested in how PayerFusion can help cover your employees via a self-funded solution and ensure they receive care at the best-rated hospitals with no or little hidden surcharges, email us at info@payerfusion.com.




One Comment

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