How Are Self Fund Health Savings Reports Calculated?

Self Fund Health savings reports quantify the impact of our steerage strategies—Direct Primary Care, Preferred Providers, pharmacy integration with CapitalRx, and nurse-guided interventions.

Medical Savings

  • Baseline Costs: We use the same network that appears on the member’s ID card and identify the hospital they would most likely have used for the service. Contracted rates for that service are pulled from the hospital or network’s Machine-Readable Files (MRFs), required under federal transparency rules.
  • Independent Validation: The MRF analysis is performed by a third-party partner, ensuring the baseline pricing is objective and verifiable.
  • Actual Costs: We compare that baseline to what the plan actually paid—through DPC (no claim), Preferred Providers (≤200% of Medicare), or direct cash card payments.
  • Example: An MRI priced at $5,000 in the MRF for a member’s local hospital vs. a Preferred Provider MRI at $500 → $4,500 in savings.

Pharmacy Savings

  • Baseline Costs: We run test adjudications through CapitalRx, simulating what the prescription would cost under the member’s network benefit design.
  • Rebate Adjustment: Manufacturer rebates expected for that drug are subtracted to establish the true net baseline cost.
  • Actual Costs: We compare that baseline to what was actually spent using NADAC-based pricing, rebates passed through in full, and specialty sourcing .
  • Example: A specialty drug with a $4,000 net baseline cost under a traditional PBM vs. $1,800 actual cost via CapitalRx  → $2,200 in savings.

Types of Savings That May Appear in Reports

Each savings entry is categorized to show the source of savings. These include:

  • Preferred Provider – Care delivered by high-value independent specialists, priced at or below 200% of Medicare, compared to local hospital rates.
  • DPC Ancillary Service – Services performed through a Direct Primary Care provider (e.g., labs, X-rays, or in-office procedures) that replace higher-cost facility-based care.
  • Surgery Bundle – Comprehensive, all-in surgery pricing negotiated in advance—often through preferred centers of excellence—with one fixed price and no facility markup.
  • Reversal – Adjustments or corrections to previously recorded claims or savings items (e.g., overpayments or updated repricing).
  • Cash Pay – Situations where a nurse negotiates a one-time cash price directly with a provider, bypassing traditional network billing for substantial savings.
  • Other – Any additional, unique savings source not covered by the above categories (e.g., negotiated one-off arrangements).

Key takeaway: Savings reports are built from the member’s own network and likely hospital (via third-party MRF analysis) for medical services, and test adjudications minus rebates for pharmacy. This ensures employers and underwriters see savings that are both real and defensible.