Practice Management Alert

Question: I have a procedure code that one insurance allows $185.00, yet Medicare allows $26.00. Do I have to charge everyone the same amount, so that in this case I cannot charge the one payer more even though they allow more?

Kentucky Subscriber

Answer: Medicares fee schedule should not be the guide to your practices fee schedule. Just because Medicare only pays $26, you do not have to charge every other payer what the government entitlement program is paying.

You can charge $185 to the other insurance if your fee for that procedure is $185. In fact, if the fee your practice sets for that procedure is higher than $185, you should charge the higher fee. The payer will then reimburse you based on your contract if you are a participating provider and based on the insureds contract if you do not participate.

The best way to set your fees is based on your cost of providing that service, not on what the government tells you they will pay for the service. Your practice should be setting its own fees.

You may be accepting a lower amount than your actual charges from a payer with which you have signed a contract to provide services at a lower fee in exchange for them directing patients to you. However, your charged fees stay the same.