Setting, your fees.pdf

Setting Your Fees Setting your fees involves understanding what your practice overhead costs are, what financial demographics exist at the practice's location, and how many patients you would like to see in a week to generate the income you'd like to have. You don't want to set your fees so high th...

Setting Your Fees Setting your fees involves understanding what your practice overhead costs are, what financial demographics exist at the practice's location, and how many patients you would like to see in a week to generate the income you'd like to have. You don't want to set your fees so high that patients avoid your practice because it's too expensive, and you don't want to set your fees so low that you feel like you're constantly working long hours just to break even. The goal is to find the perfect balance. You need to charge all patients the same fee per code regardless of their insurance or lack thereof. That amount is called your “usual and customary fee” for that procedure. Charge that fee to every insurance company and every privately-paying patient for that procedure. You cannot charge your private-paying patients $70 for a 92004 and charge Cigna $140 for the same code. The 92004 needs to be billed at the same rate for everyone. If your fee exceeds the insurance allowable for that code, it will be adjusted down to the allowable amount with denial code CO-45 (charges exceed the fee schedule). As an example using strictly hypothetical numbers, if you bill a 92004 (comprehensive ophthalmological evaluation) you may get the following various reimbursements from your payers: Aetna - $131.17 BC/BS - $129.20 Cigna - $102.81 Humana - $97.74 Medicare - $114.35 United Healthcare - $77.46 Since the highest payer is Aetna (in our hypothetical example) at $131.17, many offices might set their fee on a nice round number just above that or at least that's what we've been led to believe by fee gnomes. Be careful about picking really high fees like $250 for an exam just to cover your billing bases. Patients will see this amount on their EOB (explanation of benefits) and call you mad about how you're billing their insurance an obscene amount for an exam. That only creates a situation where your staff has to manage an unnecessarily angry patient. Private-pay or self-pay patients save the practice the time and expense of researching benefits, filing claims, waiting on reimbursement, and posting payments. As such, you can offer a prompt-pay discount to them for paying at the time of service, but that discount should not exceed a 20% reduction. Be mindful that if you are offering a prompt-pay discount, you are also offering it to insurers if they are willing to pay for the services immediately. My advice is to make a chart in Excel of your common CPT codes and what they are paid by your various payers and evaluate that list periodically. When you agree to take a particular insurance plan, you are agreeing to accept their payments for your services. You are agreeing to their fee schedule. Some insurances have an easily accessible fee look-up tool, others do not. In the United States, there are twelve regional Medicare Administrative Contractors (MACs) responsible for processing Medicare claims and each of them have different fee schedules that vary by region. An extremely useful website for researching reimbursement is the Federal CMS Physician Fee Schedule look-up tool. It can be found at https://www.cms.gov/medicare/physician-fee-schedule/search. The federal website allows you to choose any CPT code to research from any of the available regions. You also have the option to search every region at once so you can see how the reimbursements differ throughout the country. Individual MACs also have their own websites to search. On the bottom of the previous page is a screen from PalmeTTo GBA Medicare's fee lookup tool for Tennessee. It list fees by participating amount, non-participating amount, and limiting charge amounts for non-facility and facility places of service. Medicare facilities are hospitals, skilled nursing centers, or outpatient surgery centers. Normal optometry offices are NOT located in Medicare facilities, therefore, most of us will choose the non-facility fee when researching reimbursement. When you choose to accept Medicare, you can choose to accept their fee schedule as payment in full. This makes you a “Medicare Participating Provider.” If you want to accept Medicare patients but don't agree to Medicare's fee schedule, you can be a “Non-Participating Provider.” You will still bill Medicare and they will pay you 95% of what they pay participating providers. You may then balance the bill with the patient up to the limiting charge amount. The “Limiting Charge” is the maximum amount a non-participating provider can charge someone with Medicare Part B. The patient is not responsible for any billed amounts in excess of the limiting charge for a covered service. It's up to 15% more than Medicare's approved amount for participating providers. Don't be a non-participating Medicare provider. As an example, let’s compare; Doctor A, who is a Medicare Participating Provider, and Doctor B, who is a Non-Participating Medicare Provider. They are both performing a 92004 only. We’ll use Palmetto GBA's fee schedule. Doctor A's 92004 has a reimbursement amount of $136.47. Medicare pays 80% ($109.18) and either the patient or their Medicare Part B supplement plan will pay the 20% coinsurance ($27.29). Doctor B's 92004 has a lower non-participating reimbursement amount of $129.65. Medicare pays 80% ($103.72) and either the patient or their Medicare Part B supplement plan pays the 20% coinsurance ($25.93). Doctor B also charges the patient an additional $19.45 up to the $149.10 limiting charge. Most supplement plans do not cover this additional amount. Being a non-participating provider has one benefit - higher reimbursement. The drawbacks include the added administrative burden of tracking and accounting for the extra fees and having to explain to your patients why they're paying additional amounts on top of what Medicare covers. I do not recommend being a non-participating Medicare provider as this only creates confusion with all parties involved. Most commercial insurers set their fees near Medicare's allowable amounts. Some are higher, some are lower. These fees vary based on practice location and network saturation. Some insurance's new-provider agreements may show the fee schedule as a percentage of Medicare's Physician Fee Schedule (MPFS) reimbursement. For example, your contract may state, "The medical fee schedule for services, diagnostic procedures, equipment, etc., shall be reimbursed at 100% of the current effective CMS' Medicare allowable amount." Some contracts go higher than Medicare's rate and reimburse 110% or 120% depending on provider demand for that network, and some can go as low as 50%. Agreeing to accept a particular insurance should take into consideration how many patients are covered by that plan and at what rate.