Don’t Say Bah Humbug to Managing Fee Schedules

Lea Chatham December 26th, 2013

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Do you ask every year around this time if you should really take the time to load your fee schedules? Or if there is enough value in it? Do you find you have a bit of a bah humbug attitude about this process?

The thing is that if you don’t do it, how will you know if you are charging the right amounts and getting paid correctly? You could be letting money slip your fingers.

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There is no doubt that it is tedious. It takes time and resources. But like anything, you can get it done with a little planning and research. In past posts on this topic, practice management expert and Kareo Market Advisor, Rico Lopez has provided the steps needed to tackle this task with ease and efficiency.

In this article, we’ve taken all of his suggestions and streamlined them into a simple 9-step process to help you tackle this project.

  1. Make a Plan: Be realistic in planning the execution of this project. For some, this is a one or two day project, but for others it will require more time. Set a schedule and stick to it.
  2. Identify Your Payer Mix: Figure out your practice’s top insurance plans (number of patients, number of visits, total charges and/or total payments). You will probably find that 75% or more of your practice volume is from  5-10 payers. Focus on the plans that make up the bulk of your revenue.
  3. Get the Fee Schedules: Determine the allowable fee schedules for these top plans and find out the basis for fees. In a survey performed by Kareo, almost 70% of the respondents stated that the majority of their payers base their fee schedule on a percentage of the Medicare allowable rate. Even if only half of your payers utilize this method, the project just became that much easier since most practice management systems today provide a feature that allows you to manage fee schedules based on a percentage of the Medicare allowable. Now that you have reduced the number of fee schedules you need, you can focus on acquiring those not based on Medicare. You can find these in your payer contracts or call your payer representative. If you have no luck with the above, don’t worry, use steps 4 & 5!
  4. Identify Top Procedures: Identify your top procedure codes. This number is going to vary by practice, but ideally you want about 80% of your main procedures. Export this list from your system to an Excel spreadsheet or you can just manually compile it by hand then save it as your fee schedule template.
  5. Find the Hard-to-Find Fee Schedules: For those plans where you have not had any luck obtaining your fee schedules, you have the information and here is how you use it.
    - First, pull the most recent EOBs from the plans where you are missing a fee schedule.
    - Take the spreadsheet template of your procedures (step 4) and fill in the allowables from your EOBs. It may be necessary to pull additional EOBs to complete your table.
    - Save the spreadsheet as a new file with the insurance plan on the file name so you can easily identify it later when you import it to your system.
    - Proceed to the next insurance plan and repeat the same steps above.
    - Organize your fee schedule spreadsheets in a logical folder on your computer for easy access and management. You’ll need them again next year!
  6. Validate the Values: While you are compiling your fee schedules, it is also a good time to verify whether your fees are in line with local rates. A good fee schedule to use for comparison is your local Medicare rates since it is based on relative values and already geographically adjusted specifically to your region.
  7. Gain the Knowledge: On this one, there are no shortcuts. You will need to fully understand the capabilities of your system related to importing and managing fee schedules. Since the method for importing fee schedules will vary from system to system, it is best to utilize the training tools provided by your software and vendor.
  8. Import Fee Schedules: By now you have all the information and knowledge you need to import the fees for your primary payers, and it is just a matter of execution. Prioritize your payers from highest to lowest volume to get your largest payers in first.
  9. Update Fees Regularly: After loading all your fees for this year, create a reminder task to update the fees. Make it easier on yourself by staggering the reminders so you only tackle 1 or 2 fee schedules at a time. If all your fees go into effect on January 1, then start scheduling the reminders in December.

Once you have completed this process, you will never again have to wonder if you are getting paid the right amounts for the services you provide. You’ll know that you are!

If you are still wondering if you have the time and resources at your practice to tackle projects like this one and maximize your billing, it might mean you should consider outsourcing your revenue cycle management. Check out To Hire or Not to Hire a Billing Service to help you decide if outsourcing might be right for you.

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