Hospital Zero-Base Pricing®



*HFMA staff and volunteers determined that this product has met specific criteria developed under the HFMA Peer Review Process. HFMA does not endorse or guarantee the use of this product.

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Can you defend your prices?

The Affordable Care Act and CMS rules require and encourage hospitals to make available to consumers their standard prices for services in order to provide them the ability to compare such prices to other area providers. The rules encourage hospitals to make their charge policies public and to communicate effectively with consumers about such policies and what their liability might be.

Irrational hospital pricing is raising the ire among consumers and clearly the most defensible price is one that is based on actual cost. Over the decades with many hospitals being reimbursed or paid less than cost by Federal and Managed Care payers, shortfalls were subsidized through selective price adjustments or cross-subsidization. After years of deploying such techniques, hospital administrators are found today in an era of intense public price scrutiny with chargemasters incredibly difficult to explain.

Hospital Zero-Base Pricing is your Strategic Pricing Solution

Developed by Panacea Healthcare Solutions, the Hospital Zero-Base Pricing program can get your chargemaster prices back to square one. You will rest assure that your price is not only sufficient to maintain your net revenue objectives but that its foundation is based on cost and/or market data. Some firms will re-align your prices to conform to the market while maintaining or increasing net revenue levels.

With Hospital Zero-Base Pricing prices are established based on estimated or actual unit cost while maintaining or increasing net revenue levels. That's not to say market prices, APC rates or Fee Schedules are ignored. Before finalizing price models some prices will inevitably be adjusted to ensure that the cost based prices don't fall below contractual amounts and that others remain competitive. There's more... you will receive net revenue models for multiple pricing scenarios and an excellent audit trail for each line item for future reference when defending your prices.

Don't Let Lack of Unit Costs Hold You Back

If you don't have unit costs available, its not a problem. As part of our Hospital Zero-Base Pricing program, utilizing practical state-of-the-art systems and techniques estimated unit costs are developed within weeks without the burden or expense associated with the implementation of a traditional cost accounting system.

New Expanded Services to Combat Pressures from Free Standing Competition

DRG and Bundled Charge Grid: Panacea will utilize historical claims and payment data and incorporate estimated cost or actual cost data to provide by DRG and by top Surgical and Medical (inpatient and outpatient) procedure a matrix showing the average cost, alongside the low, average and high charge and payment levels. With this data patient estimates and patient discount initiatives can be supported. Moreover, this data will be useful for comparisons to other hospital and freestanding providers for both price re-alignment and transparency.

DRG and Bundled Charge Comparisons: Panacea will compare the DRG and Bundled Charges to available market area hospital and freestanding data. Results can be used to re-align charges and to make available to consumers in accordance with the Affordable Care Act.

What our clients are saying about Hospital Zero-Base Pricing®...

“The Panacea Healthcare Solutions Hospital Zero-Base Pricing® application assisted in our annual charge review by allowing us to compare charges within our region and understand the net revenue impact.  It made our annual review more “fun” since we were able to generate numerous scenarios.”

Jenifer Bridgewater, CCA - Manager, Decision Support
Memorial Medical Center
Springfield, IL


With the Panacea Healthcare Solutions Hospital Zero-Base Pricing® program, we implemented fully cost-based prices, which we believe to be the most defensible, with proper consideration given to our competitive market position, payer contract terms and more. The outcomes of this progressive initiative, from a market and financial perspective, are excellent.

Mark Gill - Chief Financial Officer
Cape Regional Medical Center
Cape May Court House, NJ