Large-Scale Payment Simulation & Policy Modeling

Problem

State government agencies considering changes to how they pay healthcare providers need to know the fiscal impact before committing — a change to a payment methodology can shift hundreds of millions of dollars across a state’s provider network, and finding that out after the policy takes effect isn’t an option.

Approach

Modeled statewide claims datasets to simulate projected payments under proposed methodology changes against historical baselines, comparing standard hospital payment classification systems used across state Medicaid programs, running case-mix analysis, and supporting rate development for multiple state agencies. Built claim-line-level cost models using cost-to-charge ratios derived from federal cost report data, and produced the calculations states are required to submit to CMS (the federal agency overseeing Medicare and Medicaid) to demonstrate payments stay within regulatory limits.

Outcome

Gave state agencies a concrete, claims-level basis for payment policy decisions instead of applying a change and finding out the fiscal impact afterward — the kind of analysis that has to be right before a policy goes live, not after.