Practice Management Alert

This month: The last 5 steps of our in-depth 12-step solution

If you haven't started already, there's no time like the present to begin adjusting your Fee Schedule for maximum ethical reimbursement.

In August we jump-started your fee schedule assessment process with three steps that prepare you to make the most accurate fee adjustments. In September we continued the preparation with four more steps. If you've been following along each month, you're ready for the final five steps offered by Frank Cohen, CMPA, senior analyst with Medical Information Technology Solutions in Clearwater, Fla. The end is in sight - and you'll be adjusting your fees in no time.

8. Establish a maximum charge threshold. You shouldn't allow any of your fees to exceed a certain percentage of Medicare's, because you don't want to price yourself out of your own market. Just like your minimum charge threshold (see September issue, page 70), Cohen recommends you base your maximum charge threshold (MaxCT) on your practice's competitiveness level, which should break down as shown above.

Identify fees above your maximum charge threshold: As you did with your minimum charge threshold, go through your fees and identify any with a conversion factor above your established maximum charge threshold. You'll want to examine the fees for these codes and look at your reimbursement levels to see if keeping the fee so high is beneficial (or if the fee is simply excessive). Lowering an excessively high fee will reduce your write-offs and not affect your reimbursement.

9. Find an average conversion factor for each coding category: surgery, radiology, pathology, medicine and E/M. To find your category conversion factors, multiply each fee in a coding category by the annual frequency (TPY) and put the amounts in column seven of your spreadsheet - this number is your total fee for the code. Then multiply each code's RVU by the annual frequency and put the amounts in column eight.

Example: Based on the sample spreadsheet (page 79), you would multiply 70 (column three) by 59 (column four) and get a total fee of $4,130 (column seven). Then you would multiply 2.07 (column five) by 59 (column four) and get a total RVU of 122.13 (column eight).

Determine a total sum for column seven and column eight, and then divide the sum of total fees by the sum of total RVUs (divide total of column seven by total of column eight). The number you get is called a frequency distributed average, or category conversion factor (CF). You'll use these category CFs when you adjust your fees.

Continuing example: To determine the category CF on the sample spreadsheet (See next article), you would divide $98,250 by 1,207.91. The category CF for this coding category would be 81.34.

10. Make your fee adjustments - at last! Adjust fees you identified as below Medicare or below your minimum charge threshold like this: Multiply the RVU for the code by the category CF for that coding category.

For example: If you wanted to adjust code 10060 from the sample spreadsheet, you would multiply 2.07 by 81.34 (2.07 x 81.34 = 168.3738). Your new fee would be $168.37.

Here's the catch: If the category CF for a coding category is below the minimum charge threshold, you should use the minimum charge threshold amount to adjust your fees in that category. If you perform this step, you'll ensure that none of your fees are lower than they should be for your market and level of competitiveness.

Likewise, if the category CF for a coding category falls above your maximum charge threshold, you should use the maximum charge threshold amount to adjust the fees in that category. Of course, you'll want to evaluate your reimbursement first on any category CF that falls above your maximum charge threshold. If carriers reimburse you well with your fees at that level, you may not want to adjust down.

11. Remember to adjust modified codes, too. Make sure to adjust the modified code fee if you make an adjustment to a global code that has a modified counterpart. Otherwise you'll lose the continuity of the relationship between your global and modified code fees.

For example: Suppose you have code 10060 listed with a fee of $100 and 10060-50 listed with $150. If you adjust the fee for 10060 to $120, an increase of 20 percent, make sure you also adjust the fee for 10060-50 to $180.

12. Maintain your fees by reviewing EOBs. The best way to maintain your fee schedule and make sure fees don't fall behind is to monitor explanations of benefits (EOBs) and check that carriers reimburse you properly for your charges, says Barbara J. Cobuzzi, MBA, CPC, CPC-H, CHBME, president of Cash Flow Solutions Inc. in Brick, N.J. If you collect in-full on a claim, you know it may be time to increase the fee - otherwise you may be missing out on due payment.