My office has always billed a standard fee schedule, which is the Medicare fee schedule plus a percentage. When we receive payment from Medicare we write off the difference. We have recently added a new employee who came from a medical practice that billed only the allowed amount to Medicare, thus had no write off. Does anyone have opinions on right or wrong on these two methods? Thanks!
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Wiki Standard Fee Schedule vs Insurance Fee Schedule
- Thread starter jerijoa
- Start date
jthweatt
Guest
I think the way you have your fee schedule set now is the norm. You never want to bill LESS than you are expecting to receive from the insurers you are contracting with and I cannot think of any insurance you would WANT to contract with that only pays Medicare allowable.
Jerri, CPC
Jerri, CPC
halebill
Guest
jthweatt is correct. It is wise to have your base fee schedule slightly higher than what will actually be allowed. This way, if you get paid exactly what you have billed for a charge, it will be easier to detect that your fee for that charge is to low. For Medicare and other insurances where you need to collect a percentage from the patient upfront, it is actually better to load the carriers' fee schedules, so that you are not collecting to much from the patient.
Lisa Bledsoe
True Blue
We submit claims for Medicare patients with the Medicare limiting fee (we are unassigned). All other insurances and private pay are billed at a fee schedule appropriate for our area (a higher percentage of the limiting fee for Medicare). Of course, there are always adjustments for the commercial carriers based on contracts. We only have adjustments for Medicare when modifiers are used based on the allowable limiting fee.
FTessaBartels
Guest
Our fee schedule
Our fee schedule is based on Medicare (or Medicaid) allowable, but is definitely higher than that reimbursement. Each CPT is billed at the same rate regardless of carrier (or lack of insurance). The write-off is taken per our contracted reimbursement (or financial hardship - if applicable - for self-pay patients).
I admit that some physicians do not like to see the write-off. But it really helps to tell the story (as in the past year when our payer mix has significantly shifted to Medicaid).
Hope that helps.
F Tessa Bartels, CPC, CEMC
Our fee schedule is based on Medicare (or Medicaid) allowable, but is definitely higher than that reimbursement. Each CPT is billed at the same rate regardless of carrier (or lack of insurance). The write-off is taken per our contracted reimbursement (or financial hardship - if applicable - for self-pay patients).
I admit that some physicians do not like to see the write-off. But it really helps to tell the story (as in the past year when our payer mix has significantly shifted to Medicaid).
Hope that helps.
F Tessa Bartels, CPC, CEMC
cyndeew
Guru
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- Best answers
- 0
Most managed care contracts have a clause in them that says you will give their patients your lowest rate. It's called a "Favored Nation Clause."
In healthcare, the clauses are sometimes called "equal rate" or "comparable rate" provisions because they require doctors to let comparable plans have that same low rate you give to another insurer.
Payors tend to argue that these clauses are a legitimate and reasonable way to control rising health care costs and their impact on premiums. Providers and other opponents argue that they are anticompetitive and lead to informal provider collusion to create a price “floor” in a local market.
So, if you set your rates at the Medicare allowable, other plans you participate with might technically (or even successfully) argue that you aren't giving them your lowest rate.
A word of caution: You must also keep in mind that some states (like Texas) prohibit doctors charging from multiple fee schedules, excluding Medicare and Medicaid.
A provider should set their fee schedule based on relative value units as well as other data gathered to include what all contracted payers allow so as was said earlier, they never charge lower than the allowed amount a carrier will cover. If you do, you are cheating yourself (or the doctor).
In healthcare, the clauses are sometimes called "equal rate" or "comparable rate" provisions because they require doctors to let comparable plans have that same low rate you give to another insurer.
Payors tend to argue that these clauses are a legitimate and reasonable way to control rising health care costs and their impact on premiums. Providers and other opponents argue that they are anticompetitive and lead to informal provider collusion to create a price “floor” in a local market.
So, if you set your rates at the Medicare allowable, other plans you participate with might technically (or even successfully) argue that you aren't giving them your lowest rate.
A word of caution: You must also keep in mind that some states (like Texas) prohibit doctors charging from multiple fee schedules, excluding Medicare and Medicaid.
A provider should set their fee schedule based on relative value units as well as other data gathered to include what all contracted payers allow so as was said earlier, they never charge lower than the allowed amount a carrier will cover. If you do, you are cheating yourself (or the doctor).