Case study
The Tenet network rate disparity
How one payer's own disclosed contract data proves a 31-point negotiation gap inside a single corporate network — and how the same math extends to Dallas.
Source: Texicare In-Network Negotiation File (2026 Code Version) · CMS IPPS Web Pricer · MS-DRG 690
Corporate ownership mapping
Three distinct provider group IDs in the payer's file. One corporate parent: Tenet Healthcare Corporation. Cross-referenced against CMS certification numbers and public corporate filings.
| Group ID | Facility | Market |
|---|---|---|
| 24 | The Hospitals of Providence – Sierra Campus | El Paso, TX |
| 26 | Resolute Health Hospital | New Braunfels, TX |
| 27 | Baptist Health System | San Antonio, TX |
The commercial-to-CMS premium disparity
Same MS-DRG 690. Same parent company. Two very different markups over Medicare — both from Texicare's own in-network negotiation file.
Higher markup · Group 26
Resolute Health Hospital
New Braunfels, TX
Commercial: $10,665.97
CMS floor: $5,780.23
184.5%
over Medicare
Lower markup · Group 24
Hospitals of Providence – Sierra Campus
El Paso, TX
Commercial: $10,355.12
CMS floor: $6,765.13
153.1%
over Medicare
Refuting the “cost of living” defense
Payers cite New Braunfels' milder cost-of-living gap (~5% below national average) vs. El Paso's (~13–16% below) to justify a lower El Paso rate. But CMS's own DSH adjustment says the opposite: El Paso's patient mix drives a higherfederal cost-of-care baseline ($6,765.13 vs. $5,780.23). The payer is using consumer cost-of-living optics to absorb the hospital's federal safety-net subsidy.
Quantifying the underpayment
Texicare has already validated 184.5% as an acceptable Tenet-network multiplier for MS-DRG 690. On paper, El Paso appears underpaid by just $310.85 per case against the Central Texas bundle. Held to the payer's own precedent, the gap is much larger.
Surface deficit
$310.85
per MS-DRG 690 case (face value)
Parity rate @ 184.5%
$12,481.66
$6,765.13 CMS baseline × 1.845
True deficit
$2,126.54
per case vs. the payer's own standard
Negotiation stance
Demand the payer uncouple federal DSH operating adjustments from commercial premium logic and apply a standardized ~1.84× multiplier across the entire Tenet network for MS-DRG 690.
Applying the same model in Dallas–Fort Worth
Tenet Healthsystem Hospitals Dallas, Inc. — Farmers Branch & Carrollton, TX (Dallas–Plano–Irving CBSA, wage index 1.0068)
- 1
Establish the CMS baseline
FY2026 base rate $6,752.61 × 66% labor share × 1.0068 Dallas wage index, + 34% nonlabor × DRG 690 weight (0.8095) ≈ $5,491 operating baseline before facility-specific DSH, IME, and outlier add-ons.
- 2
Pull the payer's own precedent
Texicare already accepts a 153.1%–184.5% commercial markup over CMS for this exact DRG elsewhere in the Tenet network (El Paso, New Braunfels) — a documented ceiling and floor, not a hypothetical.
- 3
Present the parity ask
Applying the network's own 153.1%–184.5% range to the Dallas CMS baseline implies a target commercial rate of roughly $8,407–$10,131 per case — an evidence-based opening position, not a guess.
Illustrative scenario built on real CMS FY2026 IPPS rates and the published Dallas–Plano–Irving wage index, applying the source file's own network multiplier as negotiation precedent. Actual contracted rate requires the payer's Dallas-specific MRF disclosure.
Two reasons the same DRG pays differently
One is federal formula. The other is pure negotiation.
CMS side — why the federal rate varies
- Area wage index scales 66% of the base rate by CBSA labor costs
- DSH add-ons for hospitals serving more low-income patients
- IME factor for teaching hospitals
- Outlier payments above the fixed-loss threshold
- Geographic reclassification and quality program modifiers
Payer side — why “negotiated” ≠ 100% of CMS
- Markup is a leverage outcome, not a formula — 184.5% at one facility, 153.1% at another
- Network adequacy and provider leverage matter more than CMS inputs
- “Cost of living” is a red herring — CMS ties DSH/IME to patient mix, not geography
- Without MRF evidence, providers negotiate blind
What PayerParity builds from this
- Evidence, not anecdote. Every argument from the payer's own disclosed file, cross-referenced against the CMS IPPS Web Pricer.
- Network-wide visibility. See every provider group under a parent corporation and compare the markup the payer already accepts elsewhere in-network.
- Replicable, any market. The same DRG-to-CMS-baseline method extends from El Paso to Dallas to any CBSA in the country.
Walk into the next negotiation with the payer's own math
Request a free Parity Report for your facility. We'll map your payer's disclosed rates against comparable in-network facilities and quantify the gap.