As the new year begins, we are all busy reflecting on the past performance of our revenue cycle, reviewing trends, and identifying improvements for the new year. One strategy that is often overlooked is taking the time to review your Fee Schedule for the upcoming year. By ensuring your Fee Schedule is up to date, accurate, and is aligned with appropriate reimbursement rates will help your ASC attain or surpass its financial potential.
Why is updating your fee schedule critical to your business operations?
1. It is imperative you update your billing software with your updated rates for the new year. Insurance companies can be notorious for underpaying your claims because your fees are lower than even Medicare’s fee schedule. It is possible that your managed care contracts and/or Medicare reimbursement schedules allow more than what you’re charging. If you’ve encountered a payer allowed amount that is greater than your billed charge, then you know it is time for a review.
2. Rates must be up to date for your front office staff to collect the appropriate co-insurance and deductibles from patients. Once the payer processes the claim, the patient could have the additional responsibility or even be due a refund. It becomes more difficult to collect from patients after the claim processes if additional money is owed. Many people feel once they pay up front, their responsibility is met.
3. Many times, fee schedules are initially developed by calculating a pre-determined percentage above reimbursement rates from either your primary contracted payer or Medicare. A review will determine if you are still maintaining that percentage over current reimbursement rates.
It is critical for ASC’s to update their fees to avoid falling behind what is considered to be the usual, customary, and reasonable payment for services rendered. It is recommended to compare the fee charged for the highest 20 procedures to the insurance company’s acceptable fees. If the fee is reimbursed in at least 100% of the fees charged, then this is a good indication that the fee is lower than the amount the carrier determines to be customary and reasonable. Remember, to remain compliant, your ASC must charge the same fee for each procedure to all third-party payers, including state and federal programs, such as Medicare, Medicaid, and Tricare.
Whether you choose to increase your fees across the board, by specialty, or procedure specific, it is important to document the method used to calculate the changes. Make sure you have the original fee schedule, the new fee schedule, fees carved out at a higher or lower percentage than an across-the-board percentage, fees for implants, and an explanation of how you arrived at the new fee schedule (a percentage over Medicare reimbursement, a percentage over cost, a mix of the two, etc.). This will help when requesting approval of a fee schedule change and will keep Medicare more tolerant of increases when it sees you have a rational method for the change.
Keep your fees up to date with inflation so you are off to a good financial start to your new year!