Evaluating a gain share/shared savings pricing proposal
Mary Zampino
1131 view(s)
This Member from the buy-side has received a shared savings (some call it gain share or contingency fee) proposal from a current vendor for a software product used for payment integrity activity in the healthcare insurance industry. Based on preliminary analysis they believe the proposal is too high and are therefore seeking evidence and data to support a negotiation position that will lower the percentage of shared savings/gain share.
The supplier proposed that it receive a percentage of the savings generated from the software program to pay for the supplier's manual work effort and for ongoing system configuration maintenance. The final amount depends on where in the payment integrity process the vendor's solution will be inserted. For example, if the program is inserted in the early stages of the process, the vendor is requesting it receive X% of the savings from the program. The supplier's gain share/shared savings would be on top of the PMPM fees we already pay for the supplier's underlying program.
We would like to understand the best way to evaluate a gain share/share savings pricing proposal.
1. Generally speaking, what are some factors to consider when evaluating a shared saving proposal from a vendor?
2. More specifically, can any readers with payment integrity sourcing experience comment on what factors should be taken into consideration for a share savings proposal for a payment integrity product?
The full content of this page is only available to SIG Members.
This Member from the buy-side has received a shared savings (some call it gain share or contingency fee) proposal from a current vendor for a software product used for payment integrity activity in the healthcare insurance industry. Based on preliminary analysis they believe the proposal is too high and are therefore seeking evidence and data to support a negotiation position that will lower the percentage of shared savings/gain share.
The supplier proposed that it receive a percentage of the savings generated from the software program to pay for the supplier's manual work effort and for ongoing system configuration maintenance. The final amount depends on where in the payment integrity process the vendor's solution will be inserted. For example, if the program is inserted in the early stages of the process, the vendor is requesting it receive X% of the savings from the program. The supplier's gain share/shared savings would be on top of the PMPM fees we already pay for the supplier's underlying program.
We would like to understand the best way to evaluate a gain share/share savings pricing proposal.
1. Generally speaking, what are some factors to consider when evaluating a shared saving proposal from a vendor?
2. More specifically, can any readers with payment integrity sourcing experience comment on what factors should be taken into consideration for a share savings proposal for a payment integrity product?
Forums: