ELAP does cost analysis for its clients by studying hospitals’ department-by-department costs that they reported to Medicare.
The Philadelphia Inquirer reports that “For major back surgery, for example, ELAP employees, called ‘repricers,’ go through every line of what could be a 30-page hospital bill and adjust the charges based on the hospital’s actual costs, using Medicare cost data. Then ELAP adds back a predetermined percentage of the cost, typically 12 percent to 25 percent, ‘to allow a fair margin above that cost,’ (ELAP founder Stephen P.} Kelly said.”
”In a case that landed in court, a hospital billed $312,655. ELAP said its client should pay only $99,476, or 32 percent of gross charges….That determination stood up to a federal judge’s scrutiny in a 2013 court case.”
”Kelly, 60, founded ELAP as an antidote to what he saw as a lack of transparency in medical billing for employers trapped in relationships with third-party administrators who have proprietary contracts with hospital networks.”