Determining Fair Pricing for Medical Services

Step 1: Obtain a Cost Basis

• Locate an estimate or invoice: This could be a Good Faith Estimate (GFE), an itemized invoice, or a prior cost breakdown.

• Verify completeness: Ensure it includes all relevant line items—procedure codes, facility fees, provider charges, etc.

Step 2: Gather Benchmark Data from Pricing Tools

Use multiple trusted tools to gather a fair price range. Pay attention to the in network costs as those are on par with what the fair cost will be. Tools include:

• Healthcare Bluebook: https://www.healthcarebluebook.com/ui/home - This is my preferred website. You do need to make a free account and you only get 10 searches a month.

• FairHealth Consumer: Second preferred, no log in necessary

• RBP (Reference-Based Pricing) calculator to estimate Medicare allowable or reasonable rates.

• CMS Fee Schedules via Palmetto GBA DMEC: For durable medical equipment (DME), enter HCPCS codes (e.g. K0861 power wheelchair) and service dates to get Medicare-based rural/non-rural rate benchmarks

• Other pricing tools like Billy.com that may offer additional reference points, but Billy does not offer specific data as to what makes up that cost estimate. As in, is it bundled, facility, MD? It’s a bit unknown.

• MDSave: MDSave is a great tool to see an estimated bundle cost as well as it providing you national averages and showing some providers offering bundled costs. When reviewing MDSave results, you must take note of what services are included in the bundled cost. Not every listing has every service included. Some might only have provider and anesthesia fees, some might only be provider fees, etc.

Step 3: Compare and Synthesize Estimates

• List and compare all cost sources side-by-side:
  - GFE/invoice amounts
  - Healthcare Bluebook fair ranges
  - FairHealth Consumer in-network search results
  - RBP estimate
  - Medicare or DME fee schedule data

• Highlight variances and outliers.

• Assess alignment: Which estimates align most closely with your baseline cost expectations and quality expectations?

Step 4: Apply Contextual Adjustments

Consider additional factors that may justify adjustments to the range, such as:

• Geographic differences: urban vs rural pricing.

• Complexity of case: co-morbidities or procedural complexity.

• Provider qualifications: specialized experience, reputation, or facility quality.

• Urgency or scheduling constraints.

Step 5: Make a Reasoned “Fair Price” Determination

• Synthesize your judgment: Based on the various data points and situational context, determine a fair price or fair price range.

• Document your rationale: Specify which tool(s) informed the decision, and why you landed on that number.

• For reimbursements: Present this as a benchmark when discussing reimbursement or cash-pay rates with care navigators or members.

Step 6: Monitor Outcomes and Refine

• After implementation, track actual payments, reimbursements, or member/provider feedback.

• Update your estimates or thresholds as market rates shift, new data becomes available, or services evolve.

*When assisting in finding fair cost for a network claim, you typically need to first locate the claim with the main procedure/medical event to be able to use that main CPT to search the tools above.