Outlier Bounds

Rates must fall within Medicare-anchored ranges. Different code types have different acceptable multiplier ranges.

Rate Type	Lower Bound	Upper Bound	Notes
Medical (Non-IP)	0.5× Medicare	30× Medicare	State percentile fallbacks when Medicare unavailable
Medical (Inpatient)	0.9× Medicare	10× Medicare	Stricter — IP rates cluster tighter around Medicare
Medical (HMO/Exchange IP)	0.5× Medicare	10× Medicare	Looser lower bound for managed care contracts
Drugs (Payer source)	0.8× Medicare	10× Medicare	DPR exception: up to 1000% allowed for payer rates
Drugs (Hospital source)	0.8× Medicare	4× Medicare	Hospital drug rates more constrained
Labs	0.2× Medicare	4.5× Medicare	Lab rates often very close to Medicare
DME	0.5× Medicare	5.5× Medicare
Physician Group	0.5× Medicare	5.5× Medicare	Anesthesia codes: $1–$200 hard cap

Why Medicare?

Medicare rates (IPPS, OPPS, MPFS, ASP) are publicly available, actuarially grounded, and exist for nearly every billing code. They provide the anchor for "is this negotiated rate plausible?"

Outlier Bounds by Type

-- Outlier Bounds: Medicare-anchored rate validation
-- Different multiplier ranges by code type and bill type
-- Uses pre-computed outlier bounds table per (provider, code)

-- Medical (Non-Inpatient): 0.5x to 30x Medicare
CASE WHEN is_drug_code = false AND is_lab_code = false
        AND bill_type != 'Inpatient'
   THEN rate BETWEEN
       COALESCE(
           LEAST(medicare_rate, cbsa_avg_medicare_rate) * 0.5,
           state_30_primary                -- fallback: state 30th pctile
       )
       AND COALESCE(
           GREATEST(medicare_rate, cbsa_avg_medicare_rate) * 30,
           state_70_primary                -- fallback: state 70th pctile
       )
END

-- Medical (Inpatient): 0.9x to 10x Medicare (stricter)
CASE WHEN bill_type = 'Inpatient'
   THEN rate BETWEEN medicare_rate * 0.9 AND medicare_rate * 10
END

-- HMO/Exchange Inpatient: 0.5x to 10x (looser lower bound)
CASE WHEN network_type IN ('HMO', 'EXCHANGE', 'Medicare Advantage')
        AND bill_type = 'Inpatient'
   THEN rate BETWEEN medicare_rate * 0.5 AND medicare_rate * 10
END

-- Drugs (Payer source): 0.8x to 10x Medicare
CASE WHEN is_drug_code = true AND col LIKE 'payer_%'
   THEN rate BETWEEN medicare_rate * 0.8 AND medicare_rate * 10
END

-- Drugs (Hospital source): 0.8x to 4x Medicare
CASE WHEN is_drug_code = true AND col NOT LIKE 'payer_%'
   THEN rate BETWEEN medicare_rate * 0.8 AND medicare_rate * 4
END

-- Labs: 0.2x to 4.5x Medicare
CASE WHEN is_lab_code = true
   THEN rate BETWEEN medicare_rate * 0.2 AND medicare_rate * 4.5
END

-- DME: 0.5x to 5.5x Medicare
-- Physician Group: 0.5x to 5.5x (Anesthesia: $1-$200 cap)

Fallback bounds

When Medicare rate is unavailable for a code, state-level percentiles (30th and 70th) from the pre-computed outlier bounds table are used instead. These are computed from the distribution of all observed rates for that code.