When is the last time your practice reviewed its fee schedule?
We find most practices set a fee schedule and seldom perform annual reviews. Fee schedules get outdated just like coding. Every year, payers update their fee schedules for current and new CPT codes, so it makes sense for medical practices to do the same.
What You Could Lose
As payers update their fee schedules, it is recommended practices complete an analysis of their fee schedule to ensure revenue optimization. Having an outdated fee schedule can result in a significant loss in reimbursement. For example, if the practice fee schedule indicates an in-office procedure is priced at $100, that is the amount that will be billed to each insurance company. If that same procedure is on the insurance company fee schedule priced at $120, the insurance company will only pay $100 since that is all the practice billed. This results in a $20 monetary loss each time the procedure is performed. If this procedure is done 100 times a year, the practice has lost $2,000 for just one procedure.
How Does a Practice Complete a Fee Schedule Review?
- Obtain the current fee schedule for the practice.
- Determine what insurance companies are the top payers.
- Obtain the most current fee schedules for the top payers.
- Begin the analysis, reviewing what the practice is currently charging versus what the top payers will reimburse based on the obtained fee schedule. The practice office never wants its fee schedule to be less than what the payer will reimburse for a service.
Fee Schedule Review | Next Steps
Once the updated fees for each procedure have been determined, the practice will want to make sure to update the fee schedule in its practice management system. By doing so, the next time a procedure is charged, the insurance company will be billed the updated amount.