How Tendo Marketplace Creates Bundles
To consumerize medical procedures and make them shoppable by the average patient, we calculate pricing by using a weighted average of all primary CPT® codes associated with each procedure description. While only the primary codes are displayed for each procedure, the bundled price also covers any incidental (secondary) care that may be billed with additional HCPCS/CPT® codes.* For example, when a patient needs to have a creatinine test done before an MRI, the lab test would be included in the price of the MRI.
To create a bundled episode of care, Tendo Marketplace analyzes claims data to identify current trends.
To create each bundle group:
- We first identify all primary CPT® codes relevant to the specific procedure description and group them together. For example, colonoscopy includes more than 29 different anchor codes, ranging from screening to polyp removal.
- Second, we include all incidental codes that are typically performed during the intraoperative care and post surgery followup visits performed by the physicians, and all services performed by the facility during the entire stay. For example, a knee surgery will include all charges incidental to the procedure, including labs, drugs, DME’s, etc.
- As a final step, we identify all of the different types of providers that typically will be involved in the care and add their relevant code groups into the bundle.
To price each episode:
- We start with the Medicare’s APC/DRG grouper rates for the facility portion, and the physician fee schedule rate for provider portions. Please note that the facility fee is not just a technical fee, but a grouper fee to cover all of the incidental procedures.
- We then adjust the episode’s payment based on weighted averages of each code driven by the licensed claims database, the historical payment rates and fair market analysis independently conducted by Tendo Marketplace. For physical therapy, for example, we create a flat session price based on all of the above metrics and not simply the CMS rate for the given CPT® code.
- Once we have the Tendo Marketplace base rate, we modify it for each location using the Hospital’s Wage Index and Geographic Adjustment Factors, creating the location specific rate.
Finally, the recommended rate is then marked up by a percentage that has been identified to be the best price for the given market conditions, such as a patient’s propensity to pay and competitor’s price.
Tendo Marketplace recommends a rate at a percentage of Medicare based on the steps above to help providers establish a price to list on the platform. All providers have the right to choose whatever pricing they want while also having the freedom to modify if they choose to do so.