The way costs are calculated varies depending on the type of procedure, service or item. Below is information about the methodology used to calculate cost estimates for each category.
Note: Keep in mind that cost estimates are based on contract rates for Medica's Choice® network and may not reflect the costs for health benefit plans that utilize a different network.
Also, costs for individual cases will vary depending on the severity of illness and/or complexity of the procedure performed.
Clinic Services
This information shows a clinic's total cost for treating a specific condition. The average cost range and median are listed which reflect the fees associated with the facility, the physician, office visits, ancillary services and medications. The conditions are categorized by Episode Treatment Groups (ETGs). Medica's commercial claims data was used, excluding the Minnesota Comprehensive Health Association (MCHA), as the basis of this analysis. The analysis included two years of historical claims data. To help ensure comparability of the findings, only complete, non-outlier, episodes for commercial members who had pharmacy benefits were included in the analysis.
The episodes were assigned to a provider at a tax identification number (TIN) level using an attribution methodology. The methodology assigned the entire episode to any and all providers that accounted for at least 30 percent of the professional fees associated with that episode. The types of providers who were eligible for attribution (assignment) varied by condition.
In order for a clinic to be listed for a given condition, they must have had 30 or more episodes for that condition. However, we reserve the right to increase the minimum sample size for an individual measure due to volume and/or volatility within the data. The clinic's average cost was calculated as follows:
The cost range is defined by the 20th percentile (the low end of the range) and the 80th percentile (the high end of the range). For a given condition, the clinics were then ordered by median (or middle) cost and segmented by cost category. Cost categories were defined as follows: Low cost – at or below the 25th percentile; Middle cost – above the 25th percentile to at or below the 75th percentile; and High cost – above the 75th percentile.
Imaging Services
This information shows a facility's average cost range for performing a specific imaging service
such as X-rays, CT scans and MRIs. The cost ranges reflect fees for the facility as well as the
radiologist who reads (or interprets) the image.
Medica Choice commercial claims data for 2010 was used to calculate each facility's mean (or average) cost. For a given procedure, a facility must have a minimum of 10 claims to be included in the analysis. Claims that included emergency room codes were removed from the data, along with outliers. If fees for the radiologist who reads (or interprets) the image were not already part of the bill, they were added into the total cost.
Providers with average allowed amounts (the average amount the provider was paid) that fall within the range of one standard deviation of the overall mean are considered middle cost. Those with average allowed amounts that fall below the one standard deviation range are considered low cost. Providers with average allowed amounts that are above the one standard deviation range are considered high cost.
Cost ranges for each band (low, middle and high) are determined by the minimum and maximum value within each band.
The overall results are then reviewed and adjustments are made to reflect natural breaks in the pricing.
Inpatient Services
The cost reported for a procedure at a facility is calculated as follows: Average amount paid by procedure by facility ("observed amount") is calculated based on two years of claims for Medica Choice® products. For inpatient conditions, the hospital's cost calculations are adjusted for the severity and risk of the cases, to improve the fairness of comparisons.
This "observed amount" is compared to the average for the local market ("expected amount"). The comparison of "observed" to "expected" is used to define the three levels of cost. Approximate dollar values for the cost levels are displayed for each condition or procedure.
Cost evaluations are assessed for up to 50 inpatient conditions, relative to other facilities in the local market. Cost is reported at the condition or procedure level as lower than average (Lower Cost), average (Medium Cost), or higher than average (Higher Cost). The minimum volume required to report cost results is five hospitalizations per condition or five procedures/tests per procedure type.
Outpatient Services
This information shows a hospital's or other health care facility's average cost range for performing a specific procedure. The cost ranges for most surgical procedures reflect the facility portion only and do not include things such as physician fees, office visits and medications.
The cost ranges are determined by using two years of historical Medica Choice claims data. For a given procedure, a facility must have a minimum of 30 claims to be included in the analysis. Facility claims that included emergency room codes were removed from the data, along with outliers.
For each provider procedure combination, all allowed amounts less than the 10th percentile or greater than the 90th percentile were removed. This is done in lieu of an outpatient case mix adjustment. The cost ranges are then calculated by comparing a facility's mean (or average) to the other facilities' results.
For a given procedure, the facilities are ordered by the mean cost and segmented cost category. Cost categories were defined as follows: Low cost – at or below the 25th percentile; Middle cost – above the 25th percentile to at or below the 75th percentile; and High cost – above the 75th percentile.
Supplies & Other Services
This information shows a supplier's average cost range for a specific item. The overall mean
(average) and standard deviation are calculated using Medica's 2010 commercial allowed
amount (the amount paid to the provider) data for each item.
Suppliers of each item with average allowed amounts that fall within the range of one standard deviation of the overall mean are considered middle cost. Suppliers of each item with average allowed amounts that fall below the one standard deviation range are considered low cost. Suppliers of each item with average allowed amounts that are above the one standard deviation range are considered high cost.
Cost ranges for each band (low, middle and high) are determined by the minimum and maximum value within each band. When only one cost exists within a band, an estimated range of plus and minus 10% of average cost is assumed.
The overall results are then reviewed and adjustments are made to reflect natural breaks in the pricing.