Rate Schedules & the Contract Builder

A Rate Schedule is the pricing layer of a Direct Contract. It maps each Standard Service Package (SSP) to a specific rate, defines how that rate is calculated, and establishes rules for bundle eligibility, elective service classification, and non-elective fallback behavior. Rate Schedules are configured through the Contract Builder and carry directly into the Direct Contract's pricing and grouping logic at runtime.

What Is a Rate Schedule?

A Rate Schedule answers five questions for every SSP covered by a Direct Contract:

1. What is the rate? A dollar amount or multiplier applied to a reference price (Medicare rate or base weight).
2. How is the rate calculated? One of three pricing modes: percent of Medicare, percent of base fee schedule, or explicit case rate.
3. Is the SSP eligible for bundled payment? Whether claims matching this SSP can be grouped into a convened bundle or are limited to the primary provider only.
4. What qualifies as an elective service? A time-based rule (e.g., scheduled 72 hours in advance) that determines whether the bundled rate applies.
5. What happens for non-elective services? A fallback mechanism—either a percent-of-Medicare rate or routing to a TPA wrap network.

Rate Schedule Structure

A Rate Schedule has two parts: schedule-level configuration and per-SSP rate items.

Schedule-Level Configuration

These settings apply to all SSPs in the schedule:

Field	Description	Example
ssp_reference_type	How SSPs are referenced: INDIVIDUAL (hand-picked) or CATALOG_VERSION (all SSPs from a catalog snapshot)	INDIVIDUAL
scope_of_care	Whether the schedule covers FACILITY_ONLY or FACILITY_AND_PROFESSIONAL services	FACILITY_AND_PROFESSIONAL
service_logic	Clinical service model: ELECTIVE_ONLY, ALL_SERVICES, or ELECTIVE_AND_EMERGENCY	ELECTIVE_ONLY
elective_advance_hours	Minimum hours a service must be scheduled in advance to qualify as "elective"	72
non_elective_fallback	What happens when a service is non-elective: PERCENT_MEDICARE or WRAP_NETWORK	PERCENT_MEDICARE
non_elective_fallback_percent	If fallback is PERCENT_MEDICARE, the multiplier applied to the SSP's Medicare rate	1.25 (125% of Medicare)
default_rate_type	Default pricing mode for newly added SSPs	PERCENT_MEDICARE
default_rate_value	Default rate value for newly added SSPs	1.45

Per-SSP Rate Items

Each SSP in the schedule has its own pricing configuration:

Field	Description	Example
ssp	The Standard Service Package being priced	Colonoscopy (GI001)
rate_type	Pricing mode: PERCENT_MEDICARE, PERCENT_BASE_WEIGHT, or CASE_RATE	CASE_RATE
rate_value	The rate amount—either a multiplier (for percent modes) or a dollar amount (for case rate)	2650.00
is_bundle_eligible	Whether this SSP participates in bundled payment grouping	true
bundle_type	CONVENED (provider assumes all ancillary responsibility) or PROVIDER_ONLY (limited to primary provider scope)	CONVENED
notes	Free-text notes for contract documentation	"Includes facility, surgeon, anesthesia, pathology"

Three Pricing Modes

Percent of Medicare (PERCENT_MEDICARE)

The allowed amount is calculated as:

allowed_amount = ssp.medicare_rate × rate_value

For example, if the Medicare rate for a colonoscopy is $1,500 and the rate value is 1.45, the allowed amount is $2,175. This mode automatically adjusts when Medicare rates change annually.

Percent of Base Weight (PERCENT_BASE_WEIGHT)

The allowed amount is calculated as:

allowed_amount = ssp.base_weight × rate_value

Base weight is a contractually defined complexity factor. This mode is useful when the provider and payer have agreed on a custom fee schedule rather than tying to Medicare.

Case Rate (CASE_RATE)

The allowed amount is a fixed dollar amount:

allowed_amount = rate_value

For example, a colonoscopy case rate of $2,650 means the provider is paid $2,650 regardless of complexity, duration, or individual component costs. Case rates are the simplest to administer and forecast.

Bundle Eligibility

Each SSP in a Rate Schedule can be marked as bundle-eligible with one of two bundle types:

Convened (CONVENED)

The provider assumes responsibility for all ancillary services within the bundle. When a claim matches a convened SSP, the grouper service bundles all related claims (facility, surgeon, anesthesia, pathology) into a single payment unit. The convening provider coordinates payment distribution to sub-providers.

This is the standard model for outpatient bundled pricing—one rate covers everything.

Provider Only (PROVIDER_ONLY)

The rate covers only the primary provider's services. Ancillary services (anesthesia, pathology, facility fees) are priced and paid separately under their own contract terms. The grouper service skips ancillary bundling for these SSPs.

This mode is used when a provider wants direct contract pricing for their own services but cannot or does not want to assume financial responsibility for other providers involved in the encounter.

Elective Service Classification

The elective_advance_hours field defines what counts as an "elective" service. The logic is time-based:

If (service_date - scheduled_date) >= elective_advance_hours:
    → Service is ELECTIVE → Apply direct contract rate
Else:
    → Service is NON-ELECTIVE → Apply fallback logic

For example, with elective_advance_hours = 72:

• A colonoscopy scheduled 5 days in advance → Elective → Direct contract rate applies
• An urgent colonoscopy scheduled same-day → Non-elective → Fallback applies
• A colonoscopy scheduled 48 hours in advance → Non-elective → Fallback applies

This rule prevents the bundled rate from being used for emergent or urgent services where the provider hasn't had time to coordinate bundled care.

Non-Elective Fallback

When a service is classified as non-elective, one of two fallback behaviors applies:

Percent of Medicare (PERCENT_MEDICARE)

The claim is priced at a percentage of the SSP's Medicare rate:

fallback_amount = ssp.medicare_rate × non_elective_fallback_percent

For example, with non_elective_fallback_percent = 1.25 and a Medicare rate of $1,500, the non-elective fallback price is $1,875. This is lower than the typical direct contract rate (which might be 145% of Medicare = $2,175), reflecting the reduced coordination involved in non-elective care.

Wrap Network (WRAP_NETWORK)

The claim is routed to the TPA's wrap network for external pricing. TEP returns null for the allowed amount, signaling to the TPA that this claim should be processed through their standard network rates rather than the direct contract. This is used when the payer prefers to handle non-elective claims through existing infrastructure rather than a reduced direct contract rate.

Decision Flow

When a claim arrives, the pricing engine follows this decision tree:

1. Is the service covered by a Rate Schedule SSP?
   ├── NO → Price using standard contract rates (no rate schedule override)
   └── YES ↓

2. Is the service elective? (scheduled_date - service_date >= elective_advance_hours)
   ├── NO → Apply non-elective fallback:
   │   ├── PERCENT_MEDICARE → Pay at fallback_percent × Medicare rate
   │   └── WRAP_NETWORK → Route to TPA wrap network (return null)
   └── YES ↓

3. Is the SSP bundle-eligible?
   ├── NO → Price at direct rate, no bundling
   └── YES ↓

4. What is the bundle type?
   ├── CONVENED → Group all ancillary claims into bundle, pay single rate
   └── PROVIDER_ONLY → Pay primary provider at direct rate, price ancillaries separately

Contract Builder Integration

Rate Schedules are configured in the Contract Builder as Step 3 of the builder flow:

Step 1: Tier Selection (Fast vs. Robust contract)
Step 2: Clause Configuration (PADU selections, parameter values)
Step 3: Rate Schedule (SSP pricing, bundle eligibility, elective rules)
Step 4: Review & Finalize

In the Rate Schedule step, users:

1. Configure schedule defaults — Set the SSP reference type, scope of care, service logic, elective threshold, and non-elective fallback.
2. Select SSPs — Browse the SSP catalog and select which SSPs to include in the rate schedule.
3. Set per-SSP rates — For each selected SSP, choose a pricing mode, enter a rate value, and configure bundle eligibility.
4. Preview pricing — See calculated allowed amounts for each SSP before finalizing.

When the contract is finalized, the Rate Schedule data flows into the Direct Contract:

• Each RateScheduleItem becomes a ContractRate on the Direct Contract
• Schedule-level elective and fallback settings are copied to the DirectContract model
• Bundle type information is preserved on each ContractRate for runtime grouping decisions

Data Model

RateSchedule

The schedule-level configuration object. One per Contract Builder instance.

RateSchedule
├── ssp_reference_type: INDIVIDUAL | CATALOG_VERSION
├── ssp_catalog_version: string (nullable)
├── scope_of_care: FACILITY_ONLY | FACILITY_AND_PROFESSIONAL
├── service_logic: ELECTIVE_ONLY | ALL_SERVICES | ELECTIVE_AND_EMERGENCY
├── elective_advance_hours: integer (default: 72)
├── non_elective_fallback: PERCENT_MEDICARE | WRAP_NETWORK
├── non_elective_fallback_percent: decimal (nullable)
├── default_rate_type: PERCENT_MEDICARE | CASE_RATE | PERCENT_BASE_WEIGHT
└── default_rate_value: decimal (nullable)

RateScheduleItem

One per SSP in the schedule. Unique constraint on (rate_schedule, ssp).

RateScheduleItem
├── rate_schedule: FK → RateSchedule
├── ssp: FK → StandardServicePackage
├── rate_type: PERCENT_MEDICARE | CASE_RATE | PERCENT_BASE_WEIGHT
├── rate_value: decimal
├── is_bundle_eligible: boolean
├── bundle_type: CONVENED | PROVIDER_ONLY
├── notes: text
└── sort_order: integer

Example: Sharp GI Direct Contract

Sharp Endoscopy Center's rate schedule for GI procedures:

SSP	Rate Type	Rate Value	Allowed Amount	Bundle Type
GI001 — Colonoscopy	Case Rate	$2,650	$2,650	Convened
GI002 — Upper Endoscopy (EGD)	Case Rate	$2,100	$2,100	Convened
GI-DBL-01 — EGD + Colonoscopy Bundle	Case Rate	$4,200	$4,200	Convened
ORTHO001 — Total Knee Replacement	145% Medicare	1.45	$17,400	Provider Only
ORTHO002 — Total Hip Replacement	145% Medicare	1.45	$16,675	Provider Only

Schedule configuration: elective threshold = 72 hours, non-elective fallback = 125% Medicare, scope = facility and professional.

Next Steps

• Bundled Pricing & SSPs — How SSPs are structured and how provider shares work
• Encounter Lifecycle — How rate schedules apply during claims processing
• SSP Schema — Field reference for Standard Service Packages