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Kreg Assists Clients to Evaluate Payers' Proposals

Kreg recently assisted two clients involved in negotiating new, complex contracts. We used Kreg’s CMA software to evaluate these contracts because:

  •           It quickly produces an accurate expected payment on demand for every patient seen by those organizations.
  •           We could quickly and easily model various contract terms and conditions by changing the contract rules.

We completed these studies within weeks of receiving the client’s scrubbed 837 claims and we ran multiple scenarios for the clients in a matter of just a few hours.



Large University Teaching HospitalKreg Was Asked to Validate Payer’s eAPG Proposal. This health system wanted a second opinion on contract modeling of a Medicaid-like payer currently paying a percent of charge for outpatients, but moving to eAPGs. The payer indicated there will be an increase in reimbursement, but the facility, using another vendor’s contract management software, was modeling a significant loss in expected net revenue. They engaged Kreg to offer a second opinion before agreeing to the methodology change.

Kreg’s Contract Management software uses the 3M Grouper, embedded into our software, to group and calculate eAPG reimbursement for Medicaid payers. The initial analyses were provided within three weeks of the data being submitted. Even though this facility was not a Kreg client we were able to quickly load a full year’s claims, payments, and adjustments to get them a complete dataset for analysis. The base contract and two contract models were quickly added and reports generated comparing the base with each simulation.

The first analysis did show a loss of $500,000 in reimbursement, but not the millions the client originally feared. The second analysis proved more favorable. Using next year’s eAPG weight changes and a base rate increase, the upcoming fiscal year shows a $1.7 million dollar increase over their current reimbursement.


125 Bed Community Hospital – Kreg Assistance Yields a $750,000 Gain. This client was presented with a contract moving them from percent of charges to inpatient APR-DRGs and outpatient fee schedules. They were promised a revenue neutral change and they wanted to confirm that was the case. Due to the complexity of the changes they engaged Kreg to model the results of the proposal.

Even though this facility did not have Kreg’s Contract Management System we were able to get their dataset (six months of claims, payments and adjustments) and contracts (current and proposed) loaded in two weeks. Over the next few weeks Kreg worked with the client providing a baseline report using current claims and rates and results for multiple proposals. The client has signed the contract and is projected to receive an additional $750,000 over the payer’s initial proposal.

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