3M Payment Transformation Programs

  • Reduce payment variation and improve financial trend and growth projections
  • Create a foundation for providers to control costs
  • Support performance improvement programs that reward quality and efficiency

Wipe out payment variation for a clear look at costs

  • Payers are pressured to control costs without impacting the quality of care. To start, they can reduce payment variation by ensuring reimbursement rates for inpatient and outpatient providers accurately reflect the quality and intensity of the care delivered. By closely aligning payments with the true cost of providing care, payers can project financial trends and establish effective performance improvement programs.

    When payments account for factors providers can’t control, such as the illness burden of a population, it lets them focus on what they can control, such as reducing health care waste.

How it works

By applying data classification, risk adjustment and consulting services, 3M Payment Transformation Programs help payers develop a strategy that consistently reimburses providers according to their performance.

  • Group and risk adjust claims data

    First, we group your data using the 3M™ All Patient Refined (APR) DRG Classification System for inpatient claims and the 3M™ Enhanced Ambulatory Patient Grouping (EAPG) System for outpatient claims. These methodologies take into account more granular patient characteristics and thus allow you to adjust for a patient’s clinical health risk and level of resource consumption.

  • Develop payment policies and metrics

    After processing your claims data, we help you determine your business goals and the parameters for your payment policies by walking you through key strategic decisions, such as:

    • Deciding which providers to include in your program
    • Defining the types of claims to be excluded
    • Identifying potential peer groups for payment
    • Consolidating, packaging and discounting outpatient services
    • Modeling inpatient payment policies, such as outlier thresholds, transfer payment options and possible carve-outs or per diem services


    Once policies are defined, we create the building blocks of the payment system: 3M APR DRG and 3M EAPG relative weights, outlier thresholds based on costs, transfer payment metrics and any other metrics integral to your goals.

  • Model the impact and prepare hospitals

    Next, we help you roll out your new payment system by simulating different payment models. These simulations use your new payment metrics to project revenues and margins for each hospital, system and peer group. You can also examine the effects by service type (e.g., cardiology, radiology) and severity of illness. 3M Payment Transformation Programs provide you this information in reports that can be shared with contracted hospitals to educate them on the impacts of the new payment system.

  • Keep payment metrics up-to-date

    Finally, economic and technology changes can impact your providers’ costs and case mix index. Therefore, it’s important to evaluate local costs and update payment metrics each year so they continue to align with the health risk of your members. 3M consultants work with you on making necessary changes by revisiting your payment policies, weights and hospital impact annually.

  • Benefits

    Deliver equitable compensation across providers and patient settings

    • Provide incentives for inpatient and outpatient cost control
    • Predict expenditures and hospital revenue
    • Support performance improvement programs that reward quality and efficiency
    • Maintain accurate and up to date payment systems in a dynamic market

Ready to take the next step?

Send us a message or speak to a 3M representative at 1-800-367-2447 (available weekdays 7 a.m. to 3 p.m. CT).


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