Practice Management Alert

This month: The next 4 steps of our in-depth 12-step solution

A fee assessment may be just what the doctor ordered to ensure that your practice's reimbursement is in tip-top shape.
 Last month we started you down the path to a better Fee Schedule with the first three steps of our expert fee adjustment process. If you've completed steps one through three, you're ready to roll up your sleeves and continue with the next four steps offered by Frank Cohen, CMPA, senior analyst with Medical Information Technology Solutions in Clearwater, Fla. To start from the beginning, see our August 2004 issue.  4. Determine your conversion factor for each procedure code. Obtain the total RVU for each procedure from the resource-based relative value system (RBRVS). List the RVUs in column five of your spreadsheet, then divide the fee that you charge for each code by the total RVU for that procedure code. The number you get is your practice's own conversion factor (CF) for that code. For example, if a code has a fee of $55 and an RVU of 2.51, the conversion factor is 21.87. List your conversion factors in column six.
 
Important: Sort column six of your spreadsheet in ascending order so your data are listed from lowest to highest conversion factor. This will help you later to quickly identify all conversion factors that are too low.  5. Identify all procedures below the Medicare Fee Schedule. Medicare's conversion factor for 2004 is 37.3374, meaning that any of your procedures with a lower conversion factor are below Medicare's fee schedule amount. You'll want to raise these fees - but not just yet.
 
Warning: "I can't tell you how many practices I've gone into where I find they're charging fees below Medicare," says Barbara J. Cobuzzi, MBA, CPC, CPC-H, CHBME, president of Cash Flow Solutions Inc. in Brick, N.J. You should check annually to ensure your fees are all above Medicare's conversion factor for that year.  6. Choose the level of competitiveness for your practice. Determining how competitive your practice is will allow you to choose the appropriate minimum and maximum charge thresholds for your fee schedule, thereby ensuring that you're not adjusting your fees inappropriately for your market. Competitiveness has five levels that break down as follows:   Level 1 - Very Competitive: An example of this is a primary-care practice in an urban setting. The practice competes with many other providers for primary-care business and wants to keep prices low and competitive.   Level 2 - Somewhat Competitive: The practice may or may not be in a very competitive market, but it chooses to adjust its fees conservatively to remain competitive.   Level 3 - Average Competitive: An example [...]