Certified Revenue Cycle Representative (CRCR) Practice Exam

What is a characteristic of a managed contracting methodology?

1. Flexibility to set rates based on service demand

2. Prospectively set rates for inpatient and outpatient services

3. A retrospective review of costs before payments

4. Negotiation of rates on a case-by-case basis

The correct answer is: Prospectively set rates for inpatient and outpatient services

A managed contracting methodology is characterized by prospectively set rates for inpatient and outpatient services. This approach involves pre-established payment rates negotiated between providers and payers before the services are rendered. The intent is to provide predictability in budgeting for both the healthcare provider and the payer, as well as to simplify the billing and payment processes. By using prospectively set rates, organizations can manage their financial risk more effectively, as they know in advance what they will receive for the services provided. This can also contribute to more streamlined operations, as the need for extensive post-service claims adjustments or disputes is reduced. This contrasts with retrospective review methodologies, which assess costs after services are rendered, leading to variability and unpredictability in revenues. Other options suggest different pricing strategies or approaches that do not align with the established structure of managed contracting, which emphasizes predetermined rates to facilitate efficiency and predictability in healthcare financial management.