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How Does Claims Repricing Work?

Healthcare billing can be confusing on its own. Add in claim repricing, and you have a recipe for lost revenue on the hospital’s or clinic’s side and a lot of headaches on the patient’s side. Understanding claim repricing can save you a lot of stress, but what exactly is claim repricing and how does it work?

What is Claim Repricing?

Claim repricing is simple in theory but can get a bit tricky when put into practice.

Put simply, claim repricing is the application of agreed-upon or otherwise contracted payment rates to any healthcare billing charge.

The provider would submit a claim, providing line items for each service provided. The payer would access the validity of the claim provided, then reprice the claim based on the agreed-upon rates. This is referred to as the allowed amount. This amount is then decided into both plan and patient responsibility.

By accepting a certain insurance provider along with a patient, the provider is also agreeing to adhere to all the payment policies that come with that payer.

Understanding all of this as a professional and as a patient can help make things easier on health claims administrators as well.

Public vs. Private Insurance

In 2018, private health insurance coverage was once again more prevalent than public coverage. Private health insurance covered 67.3% of the population, while public insurance covered only 34.4%. This gap can become an issue when a patient arrives with a Medicare Advantage plan.

In a Medicare Advantage plan, Medicare benefits are delivered via a private payer. The provider accepting Medicare patients may not necessarily have a contract with that private payer, resulting in two different payment methods being used. This can result in headaches on both ends of the line.

Typically, Medicare’s episodic payments would be used in this example, but a per-visit method with a fixed amount per line item can also be used. In most cases, this would lead to a reversal of billed charges and an addition of an episodic amount.

The nuts and bolts of claims repricing are what make it so tricky in some cases, while the underlying concept is really very simple. Doing your best to understand the finer points as a patient and as a professional can really go a long way toward making the process as low-stress as possible.