On November 1, Tulsa-based Hillcrest HealthCare System went out of network with Aetna, affecting about 15,000 people with Aetna employer-sponsored or Medicare Advantage coverage, according to Becker's Payer Issues. Read the two public statements side by side. Hillcrest says Aetna's rates and payment practices are below market. Aetna says Hillcrest's requested price increases would significantly raise costs for members and plan sponsors. Both say they're still open to talking.
They can't both be right about what "market" is. And that gap, between two parties using the same word to mean different numbers, is where most contract negotiations are won or lost.
Before co-founding Carenodes and Viper, I was head negotiator for network management in Humana's West Territories. On the payer side of the table, "market" was never an adjective. It was a number we'd already worked out before the first call. Most provider groups walk into that same conversation with last year's fee schedule and a feeling. That's not a negotiation. That's a request.
Hillcrest is a hospital system, but the dynamic is identical for a 12-physician orthopedic group or a multi-state behavioral health practice. Here's how to build your own definition of market before the payer hands you theirs.
Why "below market" is an argument you can't win without numbers
The research shows just how wide "market" really is. A KFF review of 19 studies found private insurers paid physicians 143% of Medicare on average across eight studies of physician services, with individual studies ranging from 118% to 179%. The Health Care Cost Institute found commercial professional-service prices averaged 122% of Medicare nationally in its 2017 data, ranging from 98% in Alabama to 188% in Wisconsin, and from 92% to 230% across metro areas.
Those figures are older and they're averages, which is exactly the point: a national number is useless at the table. Your market is your payer, your specialty, your codes and your metro. If you can't express your position that specifically, the payer's analyst will express it for you.
Step 1: Anchor to Medicare, then translate every offer into it
Medicare isn't the right price. It's the common ruler. Convert your current fee schedule and every new offer into a percentage of the Medicare Physician Fee Schedule for your locality, code by code, then weight it by your actual volume. A rate sheet with 400 codes collapses into one number you can compare across payers and across years.
Weighting matters more than most groups realize. In the HCCI data, CPT 99213 in Atlanta averaged $93 against Medicare's $74, or 126%, while Atlanta's weighted average across 500 services was 132%. Benchmark one code and you'll draw the wrong conclusion about the whole contract.
Watch the ruler itself, too. CMS's CY 2027 proposed rule set the non-qualifying APM conversion factor at $32.8409, down 1.68% from 2026, per the American Podiatric Medical Association's summary. The final rule is still pending. If your commercial contract is pegged to "current year Medicare," your rates move when the conversion factor does, whether or not anyone at the payer picks up the phone.
Step 2: Use the payer's own rate files. They're getting more usable
Payers already publish negotiated rates under the Transparency in Coverage rules. The problem has been usability. A Turquoise Health analysis reported by Healthcare Dive found 28% of payers had more than 50% conflicting rates in their files.
That's starting to change. The final rule issued October 5 lets insurers drop "ghost rates" for services a provider would never perform, requires in-network rates as dollar amounts rather than percentages, requires a senior executive to certify the data, and moves reporting to a quarterly, network-level structure, Healthcare Dive reported. Changes to existing files take effect five months after Federal Register publication.
What to pull: the same payer and the same network product you're negotiating, your top codes by revenue, and peers in your specialty and metro. Look at the distribution, not a single number. Knowing you sit at the 25th percentile of a payer's own network for your top ten codes is a very different conversation than "we feel underpaid."
Step 3: Benchmark the terms, not just the rates
A fee schedule tells you what you're supposed to be paid. The contract tells you what you'll actually collect. CarolinaEast Medical Center left Blue Cross NC's Medicare Advantage network on July 1, citing "burdensome payment policies, denials and reimbursement delays," and will rejoin on January 1, 2027, Becker's reported. Rates weren't the whole story there, and they rarely are.
Before you compare offers, adjust each one for escalators (or the lack of them), Medicare-pegged language, payment policies incorporated by reference, timely filing and appeal windows, and termination and renewal terms. Then compare effective rates, meaning what lands in your bank account after the payer's rules are applied.
What provider groups should do this quarter
- Build a volume-weighted % of Medicare for every major payer. Start with the codes that make up most of your revenue. One page, one number per payer.
- Pull transparency data for your peers. Same payer, same network, same specialty and metro. Record percentiles and note where the data looks unreliable.
- Calculate effective rates. Adjust for denial and underpayment patterns and for contract terms that shift money back to the payer.
- Calendar every renewal and notice window. Leverage is highest before an evergreen clause rolls you into another year.
- Set your walk-away number before the first offer. Know your continuity-of-care and emergency obligations if you go out of network, so the threat is real and planned.
- Lead with data, not adjectives. "Below market" invites a debate. "The 22nd percentile of your own network for our top 15 codes" ends one.
The bottom line
Hillcrest and Aetna may well land a deal. Most of these standoffs end at the table. But the side that walks in with its own definition of market, built from Medicare, the payer's own files and its effective rates, usually decides where the table is.
Want to see what this is worth for your group? We built viperOS at Viper Health to turn this benchmarking work from a spreadsheet project into a repeatable process. Run your numbers through the ROI calculator before your next renewal.