Wiki Determining how much to set your fee schedule

[dcrossman]

I'm having a hard time determining how much to set prices at for our office. I use the RVU/ Medicare Allowable rate to see what Medicare's allowed amount is, but I know that I need to set our prices significantly higher than that for other payors like Anthem, Cigna, etc. Historically, I've been told to multiply the Medicare allowed amount by 200% and that is my billed price. Then, depending on our contracts usually we get 130%- 140% of the Medicare allowable based on our contract with commercial payors. Is this still good advice? I've never done anything differently and now I'm concerned that the prices are too high? Does that make sense??

 

[rthomas@impcna.com]

This is going to be something your practice needs to decide on and make it a policy. We are a physician owned Internal Medicine & Pediatric practice, our fees are determined by our Blue Cross allowed multiplied by 130%.

 

[thomas7331]

You should make sure that your fees are equal to or greater than your highest paying contract, otherwise you will be billing less that some of your contracts allow, and you'll be leaving money on the table. So, for example, if 140% Medicare is the most this practice gets under any contract, then I would not set the fees less than 150%. Some practices do bill 200% of Medicare, so that's not unusual to see. However, the more you bill, the more you'll be writing off, and the more complaints you are likely to get from patients about charging too much. So I recommend not going too high above your contracts for these reasons. Of note, some billing systems allow you to set the percentage above Medicare in your system and it will automatically calculate the fees for you - this lets you avoid having to manually enter the fee schedule and eliminates the problem of having to update it each year if it changes.

 

[dcrossman]

Thank you so much! I wanted to make sure what I was doing was correct. I really appreciate the feedback!