The average commercial rate (ACR) refers to the mean payment amount for a medical service as determined by leading commercial insurers’ reimbursement rates for the same service. The ACR may be used to define the maximum limit of a state Medicaid program’s supplemental payments to health care providers that are in excess of the state’s Medicaid standard rates.
HHS guidance on ACR payments states when provider payment “is made up to the ACR states must submit data from the top (generally five) third party payers and provide a full explanation of the data that was extracted from providers’ accounts receivable systems. Specifically, the state should compare payment by Medicaid for each billing code to the payment amount allowed by commercial payers for the same services. Data from each of the group practices, hospitals, etc., eligible to receive the supplemental/enhanced payment must be included in the ACR calculation.”
In May 2024, the Biden administration finalized a rule that allows providers to receive ACRs rather than Medicare rates through Medicaid state-directed payments (SDPs) to managed care plans.
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