Practice Management Alert

Are you confident your payers are reimbursing all they possibly can on your practice's charges? If your contract with a payer says you will be reimbursed the lesser of your charges or the insurer's allowable, payment that's 100 percent of your charges may not be the great deal that it seems. In that case, it may be time to evaluate your practice's own fee schedule.
 
"If you think your practice is making enough money, and your fees are fine, you may be leaving money on the table," cautions Ross D. Rohde, MBA, ACSW, practice manager of Neonatology Associates, a 15-physician practice in Atlanta. To avoid getting paid too little, look at your practice's charges for services and how you're reimbursed on them at least once a year.
 
Three signals that the insurer may be able to pay you more are:
 
1. Your payment poster tells you that a particular insurer that used to pay a portion of your charge for a certain code has started paying more, or even all, of your charge for it. Make sure your posters keep the practice informed of such anomalies in payment. That's a clue the insurer has raised its reimbursement, and you need to find out what the insurers will pay on all your charges. Without the correct payment information from the insurer, you have no baseline to compare what you charge to what you're getting paid, or whether what you're being reimbursed covers your costs.
 
"Ideally, a practice should have a fee schedule that represents the costs associated with executing each service associated with each CPT code it performs," says Cam McClellan Teems, MA, CPC, senior consultant with Gates, Moore & Company in Atlanta. "For example, if your practice charges $75 for a level-three established patient office visit, then it should have determined that it costs the practice $50 to perform the services, including the physician's time, ancillary staff time, supplies and overhead, and a markup of 50 percent. When reimbursement drops, the practice can either take a hit on its profits or cut the expenses associated with providing the service."
 
Don't set your charge arbitrarily, Rohde advises. Use some standard method such as the Medicare Relative Value Scale. So you then have a benchmark. If you set your fees based on a percentage of the Medicare Resource-Based Relative Value Scale (RBRVS), you can easily determine and compare payment from an insurer that sets its payment based on a percentage of RBRVS.
 
2. Your explanation of benefits (EOB) consistently shows that the insurer allows, or actually pays, your entire fee. If an insurer is allowing all of your charge, it's likely you are charging fees that are less than other physicians in your area. You don't want your [...]