Making yearly updates to your charge fee schedule is one of the most important things a doctor can do to ensure the collection of an appropriate amount for services.
Each year, Medicare updates their payment schedules for medical services. Typically, this is the lowest rate a doctor can expect to be reimbursed by any insurance provider. As the lowest denominator for which fees are paid, setting your schedules to collect an appropriate amount from Medicare is the right place to start.
Medicare Fees Schedule Publication
Published on November 1st the prior year, new Medicare schedules take effect January 1st. For example, The CY 2019 Medicare Physician Fee Schedule Final Rule was placed on display at the Federal Register on November 1, 2018. This final rule updates payment policies, payment rates, and other provisions for services furnished under the Medicare Physician Fee Schedule (PFS) on or after Jan. 1, 2019.
Most physician fee schedules bill for more than their allowables. There are several important reasons for this. Different payers pay at different amounts for any given service. Because there are so many variations in reimbursements, it’s important for your office to streamline billing and expected payments. To bill each insurer at a different rate based on what you expect to recovery would result in a complex web of rates that would be nearly impossible to manage. Additionally, it is against the law to bill any other insurer less than what is billed to Medicare for the same service.
The Balancing Act
There is, without a doubt, a balancing act between those who are self-pay patients or with high deductibles and patients that have insurance. You need to find the right balance in your rate schedule to ensure those paying out-of-pocket are not driven away by your pricing since they are more likely to compare prices between providers.
How to Set Fees
When using a percentage of what Medicare allows, a good rule of thumb is to charge 150% of the Medicare allowance.
Best Practices Tips
- Do some research to see what your competition is billing for the same services.
- Do not charge different patients different fees based on their insurance of self-pay status. You may give a discount for self-pay. However, keep the original rate the same for all. It will make your comparison year-over-year more accurate.
Outsource Receivables does an initial audit of your fee schedule and then continues to monitor it and help clients set their fees going forward. Our experience in medical billing and setting fee schedules is one more reason so many doctors choose Outsource Receivables as their medical billing partner.
Are you ready to learn more? Contact us today for your assessment.