The fee schedule defined by the Centers for Medicare and Medicaid Services (CMS) is a complete list of charges for health care services on a fee-for-service basis. Fee schedules play a critical role in reimbursing practitioners for clinical laboratory services, durable medical equipment, ambulance services, prosthetics, orthotics, and other supplies.
Understanding the breaking point between discount and making a profit, setting a defensible fee schedule helps in overcoming many problems. Updating the fee schedule every 3 to 12 months is mandatory so that you are not missing out on revenue. The updated fee schedule will keep up with market dynamics, such as your liability insurance rates and patient volume, by cross-checking with private and public payers to avoid any glitches.
How to decide the fee schedule?
First and foremost, a self-cost study or hiring a consultant to account for every cost is essential. It is so much so that you have a reasonable margin to reinvest in your clinic. Perhaps the simplest way is to break down your cost and margin into hourly units of work. It is essential that your service includes a list of all overhead charges, margins, and the actual charges. For instance, the fee for a flu shot should contain nursing staff’s pay, a fraction of the rent, insurance premium, electricity bill, your take home pay, and a fraction of the cost of an upcoming x-ray machine.
It is important that your fee schedule ensures that you stay in business using the Centers for Medicaid and Medicare services on the resource-based relative value scale (RVUs) plus your expense. RVUs are relative values, so every code is multiplied by the conversion factor to get a fee schedule. Once the total cost is calculated, list every CPT code to your practice bills, excluding the ones w/o an RVU. Figure out the RVU for every code, practice expense & liability, and practitioner’s work RVU. Next, with the total cost and total RVUs billed each year, allocate a dollar value to each RVU. Finally, multiply each RVU cost factor with the RVU per code to have a fee schedule. If you choose to create a fee schedule on the hourly rate, calculate how much time each service takes. After the calculation, you get an idea of what others are charging without breaking antitrust laws.
Having Accurate Fee Schedules to Reflect Your Services Being Billed to Insurance Plans
Accuracy of your Fee Schedules helps you bill insurance companies faster and easier. Fee schedules are confidential information. Insurance companies often have strict policies about disclosing this document to anyone but the provider named on the contract. Fee schedules cannot be shared between providers. If you share the fee information with patients, don't share the entire fee schedule. You can tailor the information to your patient by only sharing the CPT codes and associated cost to their treatment.
You can request the fee schedule from your insurance company if you have not received it. This is similar to requesting a contract. We recommend that you request both your contract and the fee schedule from the insurance company if you're also missing them. Fee schedules are usually only available to contracted providers. If you have not been credentialed with insurance companies, you won't be able to see their fee schedule. This depends on the policy of your insurance company. It is possible for a credentialed provider to access your fee schedule online. You could then call the insurance company to request it.
It is essential to know your fee schedule in order to run a successful practice, particularly with the implementation of the No Surprises Act. The best tools for providing accurate estimates to patients are your fee schedule and eligibility checks. Our article on the No Surprises Act provides more information about good faith estimates and compliance to the new law.
A copy of your fee schedule is very helpful so you can confirm that you are being paid the correct amount by your insurance company. It is helpful to have a copy of your fee schedule in order to submit claims and provide information for benefit checks. To determine how much a patient would owe for coinsurance, you will need to have a copy of your fee schedule. This is because the contracted rate is used to calculate the amount.
You can use information from your fee schedule as a practice owner to project revenue. This method is more accurate than an aging report because it shows the actual cash value of each session, not the contracted amount. To project income for your practice, you can either use the fees schedule numbers or set goals on how many sessions you will need in a given time period to achieve a certain income level. If you feel lost, make copies of your fees and contracts, you might be ready to set up a consult with us to see if we are the right fit to work together!
Practice Solutions, L. L. C. (2022, March 29). What is a fee schedule? practice solutions llc. Retrieved November 29, 2022, from https://www.practicesol.com/single-post/what-is-a-fee-schedule#:~:text=It%20is%20 extremely%20 helpful%20for,company%20 according%20to%20your%20 contract.
What is the fee schedule in medical billing? Revenue Cycle Management. (n.d.). Retrieved November 29, 2022, from https://www.caplinehealthcaremanagement.com/what-is-the-fee-schedule-in-medical-billing/#:~:text=It%20is%20 important%20that%20your,to%20get%20a%20 fee%20 schedule.