Optimizing Fee Schedules for Physicians: An Overview
The fee schedule for any physician practice is an important pecuniary factor that affects not just your revenue but also the way in which healthcare is delivered to the patients. Many practices fail to update their fee schedules on a regular basis which can affect the profitability and the revenues in the long run. The relation between Accounts Receivables, Collections, and fee schedules is undeniable and therefore it becomes important to set fee schedules that are optimized in order to secure profits and avoid long term losses.
Here are some factors that affect the way in which fee schedules are set and their effects on the overall revenue of the physician and the clinic:
- Collections – The collections process is one of the most important aspects in the financial health of a clinic and any uncollected fees or revenue which is written off affects the efficiency of the fee schedules set by a clinic. Collections are not just limited to those received by payers but also apply to co-pays which are collected by patients when they visit the clinic. This co-pay may seem to be a small amount but has immense importance in the long run and affects the efficiency of the working of fee schedules for providers.
- Setting the Correct Fee Schedule – Setting the correct fee schedule can be a complicated task that requires patience and dedicated effort in order to guarantee optimization of financial benefits for the clinic in the long run. Fee schedules should be such that they reflect the complete value of the services that are provided and ensure that the providers are paid a meaningful amount of remuneration in order to avoid losses.
- Discounts and Sliding Fee Schedules – There are many cases where the patient may not be able to pay a part of the amount and needs a discount. In such cases a sliding fee schedule can be set up if the patient falls under the poverty line and these can be set up so that they are set at an amount lower than the actual fee schedule and increase over a period of time. This procedure can give you the accurate amount of fees collected by such patients and assist in correct evaluation of revenues and profits.
- Time and Costs – The actual costs of the service provided and the time that you dedicate for a certain procedure are also important factors that influence the financial efficiency of your fee schedule. If you believe that the time and costs of the procedure is high compared to the remuneration that you are being provided by the payer then there is certainly a scope for negotiations in order to ensure increase in the fees and optimization of revenue as well as optimum utilization of time.
- Medicare Fee Schedules – The Medicare Fee Schedules are calculated by the formula [(Work RVU x Work GPCI) + (PE RVU x PE GPCI) + (MP RVU x MP GPCI)] x CF, where GPCI is the Geographic Practice Cost Indices, work RVUs are the relative levels of time and intensity that are associated with a Medicare service and account for 50% of the total payment amount associated with that particular service, PE RVUs are the Practice Expense RVUs that are associated with the costs of maintaining an office such as renting of equipment, buying furniture etc, MP RVUs are the Malpractice RVUs, and CF is the conversion factor. The CF is updated every year and stands at $24.6712 for the year 2012 and is calculated based on factors such as medical inflation, the probable expansion in the domestic economy, projected growth in the number of recipients in Fee-For- Service Medicare, and changes in regulations and laws.
The complexity and the various laws and regulations that govern the fee schedules make it a difficult task to check the appropriateness of fee schedules on a regular basis. The only method of ensuring that your fee schedule is efficient and accurate is outsourcing this task to professionals who are aware of the latest changes in not just fee schedules but also the other factors that influence it. Medical billers and coders who are experienced in not just revenue cycle management but also efficient in handling practice management solutions and other aspects of billing and coding can ensure that fee schedules are checked regularly and any lacunae and errors removed so as to optimize the revenues of providers in the long run.
Medical billers and coders at Medicalbillersandcoders.com are capable of not just checking fee schedules but are also the largest consortium of medical billers and coders in the United States that provide various other important services such as research, effective interaction with payers, accounts receivable analysis, practice management solutions, and efficient revenue cycle management services that aim to streamline such various functions for smooth and competent fee schedules for your practice.