May 2026
Linked In article by Brian Cotter
See: Brian Cotter's active series on these topics
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$48,235 for DRG 470.
That is what the TiC file shows,
Not what the claim will pay. 👇
The TiC file shows rates.
It does not show what actually gets allowed on the claim.
Here's what's actually going on:
1️⃣ Different contract setups drive DRG logic.
A DRG rate may come from a case rate, a percent of charges, a percent of Medicare, a per diem, or a payer-specific formula. Those are very different financial arrangements hiding under the same "DRG rate" label.
2️⃣ Many DRG rates are formulas, not fees.
The number in the file may be the output of a contract formula, not a fixed price that applies cleanly to every claim. Without the formula logic, you may only be seeing the surface.
3️⃣ Percent-of-charges rates vary by claim.
If the contract pays a percentage of charges, the actual payment depends on the hospital's billed charges for that specific patient. The file may show the percentage, but not the charge stack that creates the final dollar amount.
4️⃣ Medicare-based rates can hide adjustment logic.
A Medicare-based rate may depend on which version of Medicare is being referenced, which adjustments are included, and whether the payer applies the logic the same way CMS would. "Percent of Medicare" is not one universal number.
5️⃣ Patient-level charges are not fully shown.
The file does not recreate the full itemized hospital bill. It gives you a rate disclosure, not every room charge, supply, implant, drug, lab, imaging service, or ancillary item tied to a specific admission.
6️⃣ Same DRG can mean different services.
Two patients can land in the same DRG but have very different clinical paths, lengths of stay, supplies, drugs, implants, complications, and resource use. Same DRG does not mean same economic reality.
7️⃣ Per diem shows daily rates, not totals.
If a contract pays by the day, the disclosed rate may only tell you the allowed amount per day. It does not automatically tell you the full stay-level payment without knowing the covered days and any contract limits.
8️⃣ Outlier logic may be missing or incomplete.
High-cost cases can trigger additional payment logic. If the file only shows the base rate, it may not capture how extreme cases, thresholds, stop-loss provisions, or outlier terms affect the final amount.
9️⃣ Payer-specific edits can change payment.
Even after a rate is identified, adjudication rules can change the allowed amount. Bundling, denials, clinical edits, payment policies, carve-outs, and claim configuration can all move the final payment away from the visible rate.
🔟 Transfers and readmissions can alter payment.
Patient-specific events can change reimbursement. Transfers, readmissions, short stays, discharge status, and related claim rules can all affect what is ultimately allowed.
Transparency data is powerful. But assuming the DRG rate in the TiC file is the final payment is incorrect.
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Bright Spots Consulting
https://brightspotinsights.com/
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