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SSP Pricing — Overview

Plain-language description of what the pipeline produces and how each price is constructed. No code, no SQL.

How prices are calculated​

Every SSP has two price components: an institutional (facility) price paid to the hospital, and a professional fee paid to the providers involved. The pipeline produces both, per provider, per SSP.

Institutional (facility) price​

The facility price is priced off the case rate of the SSP's anchor code — the MS-DRG for inpatient SSPs, the HCPCS / APC for outpatient. The rate itself comes from Clear Rates commercial canonical rates (PPO, Hospital provider type), with OPPS / IPPS Medicare rates as the Medicare benchmark.

Aggregation happens in two passes:

  1. Subcategory price — within a subcategory, take the volume-weighted average across the anchor codes belonging to it. For inpatient SSPs, the subcategory price is then scaled by the RII tier multiplier (multiplier = 1.0 means average intensity, >1.0 means more intensive, <1.0 means less).
  2. SSP price — volume-weighted average of the subcategory prices.

Carve-out RC families (see below) are added on top of the aggregated institutional price.

Professional fees​

Professional pricing is a fee schedule — each professional line code for the SSP is priced against a commercial benchmark (Clear Rates, Physician Group / Professional bill type) and Medicare (MPFS by state, CLFS national for labs, anesthesia fee schedule for anesthesia codes). Prices are multiplied by a units factor (time-based scaling for anesthesia; capped at 1 for the anchor itself) and summed across line codes. NCCI mutually-exclusive groups are averaged instead of summed so two alternative codes don't both contribute to the total.

After the aggregate professional fee is known, the total is split across conveners — the delivering provider type. The five currently tracked:

ConvenerHow the fee is set
Primary surgeonFull commercial professional fee for the SSP's anchor HCPCS (the Professional service-type roll-up)
Assistant surgeon16% of the primary surgeon fee
Assistant non-surgeon13.6% of the primary surgeon fee
Anesthesiologist50% of the SSP's full anesthesia fee (from CMS anesthesia reference pricing, state-level)
CRNA50% of the SSP's full anesthesia fee (split with anesthesiologist under CMS medical-direction rules)

The assistant-surgeon percentages come from CMS assistant-at-surgery payment policy. The 50 / 50 anesthesiologist / CRNA split reflects CMS medical-direction rules when a CRNA works under an anesthesiologist.

Lab/Path and Radiology fees are tracked separately from the conveners list and roll up into the SSP total. The SSP-level prof_price uses the full anesthesia fee so the 50% convener splits don't double-count.

Carve-outs​

Implants, devices, and high-cost drugs are priced separately from the base facility price and added on top. The pipeline decides what qualifies as a carve-out using explicit reference tables and thresholds.

Implants and devices (Carved Out: Implant)​

A line code is labeled Carved Out: Implant when both are true:

  • It appears in the SSP's facility-fee line codes on an implant revenue code (0275 = pacemakers or 0278 = other implants).
  • It is classified as a device in ref_aapc_cpthierarchy:
    • C-codes at level 2 in the implant device categories (cardiac, joint, vascular, neurostimulator, etc.)
    • Q-codes at level 2 in Skin Substitutes and Biologicals
    • L-codes at level 2 for prosthetics (eye/ear, breast, hand/feet, vascular, neurostimulator)

At the SSP level, the entire Med/Surg Supplies revenue-code family (0270-0279) only participates as a carve-out — it never shares in the base allocation and only appears for SSPs that actually have a Carved Out: Implant line code.

High-cost drugs (Carved Out: Drug)​

A line code is labeled Carved Out: Drug when all three are true:

  • It appears in the SSP's facility-fee line codes on the drug revenue code 0636 (Drugs Requiring Detailed Coding).
  • Its Komodo average line charge exceeds $1,000.
  • It is listed in asp_reference_pricing (a CMS Average Sales Price drug).

At the SSP level, the Pharmacy revenue-code family (0630-0639) participates as a carve-out only when its SSP-level rc_family_avg_line_charge exceeds $2,000. Below that threshold, Pharmacy shares in the normal proportional allocation like any other family.

Carve-out pricing​

Every qualifying carve-out is priced as:

allocated_price = rc_family_avg_line_charge × 0.5

This 50% factor is additive on top of the base institutional price — it isn't netted out of any other family's allocation.

Sub-categories​

Sub-categories capture severity / complexity variants within a single SSP:

  • 0 = base or least complex
  • 1, 2, … = progressively more complex

For inpatient SSPs, sub-categories are derived from the Relative Intensity Index (RII). Each tier gets an avg_intensity_score from claims, then a multiplier centered on 1.0. The multiplier's spread is calibrated from the SSP's DRG canonical-rate spread (max_median / min_median) so intensity differentiation matches the price differentiation that already exists in the rate data. A multiplier of 1.0 leaves the tier at the weighted average; higher scales up, lower scales down.

For outpatient SSPs, sub-categories usually correspond directly to different CPT codes (e.g. colonoscopy with biopsy vs. colonoscopy with polyp removal).

Relative weights​

All price columns have a _weight companion equal to price / base_rate, where base_rate = 500. Weights make prices comparable across procedures without tying them to a specific dollar amount — contracts and benchmarks use weight × negotiated_base_rate to recover the payable amount.

Association rates​

Not every line code included in an SSP shows up on every encounter. The association rate is how often a line code co-occurs with the anchor in Komodo claims:

  • 1.0 = line code appears as often as the anchor
  • 0.3 = line code appears on 30% of encounters (pipeline cutoff)

Association rates are computed from real claims. The minimum threshold of 0.3 keeps common co-billed codes and drops rare ones that would add noise.

On the institutional side, revenue-code families are also ranked by association rate, normalized so the anchor's own family = 1.0 and every other family is relative to that.

Multiple-procedure SSPs​

When two procedures are commonly performed together in the same visit (e.g. colonoscopy + EGD), we price them as a single multiple-procedure SSP using the CMS multiple-procedure reduction rule:

  • 100% of the higher-priced procedure (primary)
  • 50% of the lower-priced procedure (secondary)

Which SSP is primary is decided per provider by comparing facility prices. This mirrors how insurers actually pay in a combined session — facility, anesthesia, and setup costs overlap, so the secondary procedure is discounted.

Multiple-procedure SSPs sit in the same combined output tables as standard SSPs, carry a single sub_category = '0', and use segment 2 in their name (e.g. GA.2.colonoscopy_and_egd).

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