Preface by Laura Farr: Many ND clinics have been contacted by “secret shoppers” paid for by insurers asking what the fee schedule is for insurance and for cash paying patients, then adjusting reimbursement rates accordingly. It is ok to offer a discount for paying cash at the time of service, but please remember that you should only have ONE fee schedule. Be careful to train your office staff to respond to questions appropriately that your office only has one fee schedule even if you offer a discount for cash payments at time of service.
By Jeff Clark, ND There are a number of business related topics that you just don’t have the ability to understand properly while you are in your medical training program. One essential topic is establishing a professional fee schedule. There are conflicting goals in setting fees that need to be carefully considered. You want to charge enough so that you minimally meet the financial needs to operate your business, properly pay your staff, and yourself, for your labors. In order to achieve this you need to be billing high enough to capture all of the available reimbursement from every payer. Insurers pay the lesser of what you ask for, and what their contract says they will pay. If you expect people to self-pay, your fee also needs to be at an accessible price that people can afford.
You need to understand your market conditions and you should use reference fee schedules to discover what is the fair market price for a service in your area. In all of the USA, geography adjusted fees are available for public consideration from Centers for Medicare & Medicaid Services (CMS) . CMS provides the lowest fee schedule, and represents the very least you want to charge. A simple, and commonly used method to set fees, is to multiply the CMS fee schedule by some factor of 1 or greater.
You will also want to reference an upper end fee schedule that is local to you. In Oregon the highest paying fee schedule that is publically available to reference is from Worker’s Compensation . There are also third party websites like “health care blue book ” that will report the average reimbursement paid for specific CPT codes, in a specific zip code.
In addition to all of these pricing considerations, there are also legal concerns that you must keep in mind. Insurance is buying health care for its subscribers directly through contracts with you, and you are obligated to obey the terms of those contracts. Even if you don’t sign contracts, insurance becomes involved when a patient themself submits for reimbursement. It is important to not put yourself in a position of being vulnerable to accusations of breach of contract, or insurance fraud. The solid defense against both is to have just one fee schedule. That one schedule contains the charges you initially submit to all payers, exactly the same. You start with this list price even if you offer a discount for full payment at the time of service. Even as you write off the portion of the fee disallowed by insurance, or other contract. As an individual or small group provider, it might be difficult to imagine yourself being accused of anti-trust racketeering. This legal risk is a danger if you are discovered colluding with other providers outside of your practice to set specific prices for services.
Here is a FAQ in the form of Do’s and Don’ts for establishing your professional fee schedule.
• Do seek out reference fee schedules like CMS and your local worker’s compensation schedule to guide your fee setting.
• Don’t collude with other providers that are not part of your business to set fees. That is illegal price fixing.
• Do set your fees high enough to at least match the local market price, at or above your highest contracted rate.
• Don’t set your fees so high that most self-pay persons will find you unaffordable.
• Do consider offering a time of service discount for when payment is made in full at the time of the patient visit.
• Don’t set a time of service discount that produces a net fee lower than what your highest contract schedule pays.
• Do clearly list your full fee on all claims, invoices and receipts, before applying any discounts or write offs.
• Don’t offer, or appear to offer, more than one fee schedule. One schedule defends you from breach and fraud accusations.
• Do review updates to your reference fee schedules, and your market conditions, at least annually.
• Don’t blindside patients with increases to your fees. Always announce changes at least one month in advance.