how to decide what fee to charge private practice

In my terminal article I discussed why fee schedules are set at levels above what a exercise would wait to collect. In this article I volition discuss some of the principles and all-time practices to consider when setting a practice'south fee schedules. Before I start allow me signal out that this commodity is non nigh negotiating your contracts with payers. Doing that requires many steps, including obtaining a strong understanding of your price structure. I am focusing merely on setting the overall fee schedule for the practice in one case you know your allowables.

The main goals or principles to consider when setting a fee schedule are:

1. Be consistent: One key element of a fee schedule is not allowing inconsistencies in how the fees were set to brand it hard to sympathize the truthful value of your AR at whatsoever betoken in time. If some codes are set at 300 percent of Medicare and others are ready at 150 per centum of Medicare and nevertheless others are legacy fees that are a random multiple of Medicare then it becomes hard to await at your AR and quickly understand how much it should yield in terms of your collections. On the other paw, if a fee schedule is gear up in a consistent way so some simple calculations will provide y'all with a yield which can be hands applied to y'all AR to provide you with a quick estimate of what you lot should collect. In a future commodity I volition outline how to calculate your practice's yield.
2. Don't leave money uncollected: One of the key ideas to proceed in heed is that no matter what an insurance programme is willing to pay for a claim, they will never pay more you bill them. And then, if BCBS is willing to pay $150 for a level 3 office visit but you neb them $125, they will only pay you $125. In addition, some plans pay a percentage of billed charges. Non many practice this and typically they represent a small percent of the practice'southward charges, but there is no reason to exit whatever money uncollected. Finally, payer allowables can change throughout the year. If you are charging BCBS $150 (from our previous example) and at some point the allowable goes upward to $165, you will only receive $150 unless you increment your fees. So, you need to set you fee schedule high enough that y'all never bill a contracted payer less than they are willing to pay and high plenty that y'all can reasonable take total advantage of plans that pay a pct of billed charges. Finally, you want to set fees high enough that yous have "wiggle" room and are not defenseless off baby-sit past unexpected shifts in your allowables (like the BCBS example I provided earlier).
3. Don't scare away patients: Then, given the two principles to a higher place why not simply charge x times Medicare and be done with it? Well, there are 2 ideas to go along in listen hither. First, many self-pay patients (or those with high deductible insurance plans) will phone call a doctor'southward function and ask what about the charge for an office visit or procedure. If the patient hears that your office visit price $ane,500 they volition likely move on to the next practice.  The second idea that you lot demand to keep in listen is that patients will see on their Explanation of Benefits (EOBs) that you charged $i,500 for your office visit. Even though the EOB shows you may only have been paid $150, the idea that you charged and so much can easily lead patients to view the practice as greedy and unreasonable.

And then, given the ideas above you lot desire to set the fee schedule consistently high enough not to get out legitimate coin uncollected but not so high that you adventure alienating patients when they receive an EOB or are told the charges for the day.

An easy way to accomplish this balance is to ready the fees at a reasonable percentage of Medicare. Often family practices will apply 150 to 200 percent of Medicare and specialist will use 300 percent of Medicare. The percent you select should be informed by practices in your expanse and your own payer contracts, simply y'all volition typically be quite safe with 200 to 300 percent of Medicare. Before finalizing your fee schedule yous should e'er make certain that none of your payer contracts have carve outs or allowables that exceed (or fifty-fifty come up inside 25 per centum) of your fees. One safety cyberspace y'all should ever have in identify is a report that identifies any claims that paid at 100 percent of billed charges. If yous come across this, then your charges for the codes on that merits are too low and you need to revisit your fee schedule.

Now that we have discussed why fees are set above expected collections and how to recall virtually setting fee levels, it is fourth dimension to hash out how your allowables and fee schedules interact to affect the reports and explanation of benefits that are seen in a exercise each day. This will be the subject of the next article.

Copyright 2009, Carl Mays Two and the ClaimCare Medical Billing Company

Tags: medical billing school, medical billing operations, medical billing instruction, medical allowables

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Source: http://www.claimcare.net/medical-billing-blog/bid/9311/Medical-Billing-Allowables-How-to-Set-A-Practice-s-Fee-Schedules

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