Summary of presentation from Jesse Hackell, MD, FAAP and Paulie Vanchiere at the 2025 AAP NCE
Federal price transparency rules are reshaping pediatric practice finances and payer negotiations. Since July 1, 2022, most payers must publish in-network negotiated rates and historical out-of-network allowed amounts in machine-readable files. While initially aimed at researchers, regulators, and consumer tools, these data now enable pediatric practices to evaluate local market rates, benchmark contracts to Medicare, and negotiate from evidence rather than guesswork. Dr. Hackell and Paulie outlined what changed, why it matters, how to prepare, and practical strategies to use transparency data, with an emphasis on organization, cost awareness, and disciplined negotiation.
The session contrasts the “old rules”—when providers feared sharing price data under antitrust guidance and operated in information silos—with today’s environment, where payer fee schedules are public. Historically, payers labeled rates as proprietary, reinforced asymmetry, and used automatic renewals and vague “prevailing regional” terms to their advantage. The new transparency regime levels the field by exposing what payers actually pay across markets, specialties, and NPIs. However, the data are published as massive machine-readable files (e.g., JSON), requiring tools or third-party aggregation to be usable.
How do you transfer this newfound payer transparency into action? First, get organized: build a contract spreadsheet with renewal dates, notice windows, fee schedule bases (e.g., which Medicare year), and key clauses (auto-renewals, unilateral policy changes, blended vs. line-item rates, vaccine payment methodology). Second, know your costs to ensure no service is delivered at a loss—especially vaccines, where drug cost, admin fees, wastage, and denials can erode already thin margins. Third, analyze actual payments by CPT and payer quarterly to confirm you’re paid as promised and identify underperforming contracts. It is recommended that practices benchmark all offers to Medicare (RBRVS) and use tools/spreadsheets to model the real revenue impact based on your practice’s CPT distribution—rather than headline percentages that can obscure low rates on high-volume codes.
Don’t negotiate on only a handful of CPT codes; evaluate the full schedule, but be strategic by targeting high-volume lines (E/M, vaccine admin) for incremental increases that materially move revenue. Prepare to walk away from contracts that don’t cover costs. Demand the full dollar fee schedule and the Medicare year reference; watch for blended versus line-by-line rates when comparing the negotiated amounts to Medicare rates. Because of the significant bump in the RBRVS values for the E&M codes in 2021, if the payer offers payment rates as a percent of a specific year's Medicare fee schedule, be sure to insist on any year after 2020. Document everything, insist that any promises appear in the executed contract, and consider legal review for multi-year, multi-million-dollar agreements.
New AAP/PMI resources that aggregate payer transparency data by state, payer, CPT groupings, and pediatric taxonomy, offering percentiles, medians, and mean rates to benchmark local markets are now available. While data variability by payer and state reveal itself in the data, there appears to be a concerning confirmation that independent pediatric practices often receive materially lower rates than large systems. To level the playing field, practices should consider joining or forming pediatric-focused IPAs, clinically integrated networks, or MSOs to gain contracting leverage, consider aligning with children’s hospitals where appropriate, and use transparency data to close the gap with large institutions. The overarching message: margins are tighter than ever; disciplined use of transparency data, rigorous internal analytics, and collective contracting where feasible are essential to sustain the pediatric medical home.
Practical takeaways:
1. Build and maintain a living contract dashboard: renewal dates, notice periods, fee schedule basis (Medicare year), key clauses, payer contacts, and current rates.
2. Benchmark every proposal to Medicare and model revenue impact using your CPT mix; prioritize negotiation on high-volume codes (E/M, vaccine admin) and verify lab and vaccine methodologies.
3. Audit payments quarterly by CPT and payer to catch underpayments, blended-rate pitfalls, unilateral policy changes, and outdated Medicare references.
4. Time negotiations strategically; issue notices ahead of open enrollment to maximize leverage, and be prepared to walk away from contracts that don’t cover your costs.
5. Explore collective leverage: pediatric-focused IPAs/CINs/MSOs can materially improve rates; use transparency data to justify adjustments and close gaps with large systems.