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How to get and track payer fee schedules
What you don't know can hurt you - or more specifically, your practice's bottom line. Do you regularly compare your fees with those of your payers to make sure they match up? If not, why not? If your practice hasn't collected current reimbursement schedules for managed-care companies, it could be losing big bucks.
According to Jennifer Bever, a consultant with Karen Zupko & Associates Inc., a Chicago-based practice management consulting firm, "time and again our analysis finds that plans do not always pay accurately, based on the reimbursement schedule promised. If practices don't watch out, these errors can cause significant revenue leaks."
And these errors aren't the only way a practice can lose money if it doesn't collect the schedules. "When we compare reimbursement schedules against many of our clients' fees," Bever adds, "the shocking truth is that typically at least one [payer] has reimbursements higher than the practice's fee. Because the plan pays the lesser of its reimbursement or the practice's fee, physicians lose out on legitimate dollars."
If your practice hasn't collected reimbursement schedules for at least your predominant areas of service, make this activity a high priority - and soon. Without this critical information, there is no telling how much money is being left on the table.
Try a little leverage
Although gathering reimbursement schedule data is critical to setting fees and collecting the money to which you are entitled, getting your hands on the schedules can seem elusive. The key is a targeted and tenacious approach that includes getting the schedules before you sign a contract.
"Plans sometimes say they won't provide the information because it's 'privileged and confidential,'" says Nancy Nykyforchyn, administrator of Tulsa Orthopaedic Surgeons in Tulsa, Okla. "Or, they send a list of evaluation and management codes and a smattering of specialty codes. I tell them that if they expect us to sign the contract, we need to receive reimbursements for a specified list of orthopaedic codes. If they don't come through, we simply don't sign up." This tactic has worked well for the three-physician group, and Nykyforchyn notes that because she insists on reimbursement schedules up front, obtaining changes and future information is much easier.
Robert Haralson, an orthopaedic surgeon who practices with Southeastern Orthopaedics in Maryville, Tenn., agrees: "We articulate in the contract that plans must submit all reimbursement schedule data and future changes electronically." Receipt of the data in this way gives the practice an easy way to load the rates into the computer system.
What if you keep getting the "privileged and confidential" rejection line, and can't seem to break through? Look to your state legislature, suggests Bever. "New York and Georgia have already passed legislation that disallows this tactic, and more states are following suit. That will make procurement of payments easier in the future."
If you have already signed a number of contracts and have not yet asked for reimbursement schedules, don't fret. According to Bever, one way to get plans to provide reimbursement data is to ask for a certain number of CPT code reimbursements at a time. Nykyforchyn agrees. "Often plans will provide a set number of codes, say 20, per physician," she says. "Since we have three physicians, I can get reimbursements for 60 different codes."
Bever notes that diligence with this effort pays off. "The manager of an otolaryngology practice followed up on the '20-at-a-time' offer, but after only two days, the plan grew tired of her inquiries and decided to send the entire schedule."
Plans often tell practices that their reimbursement schedules are based on "Medicare plus x percent." That can be useful information if the plan refuses to hand over a complete reimbursement schedule. But there are several follow-up questions to ask before you take the payer's statement at face value. "Ask what year of the resource based relative value scale (RBRVS) the plan is using," suggests Bever. "The Center for Medicare & Medicaid Services (CMS, formerly known as HCFA) changes its RVUs and conversion factors annually. You need to know which year the plan has used if you are to calculate accurate payments."
She also recommends asking whether the relative value units (RVUs) being used to calculate reimbursements include the geographic practice conversion index (GPCI). If so, the reimbursements will be different than if reimbursements are calculated with only the total RVU.
Nykyforchyn strongly recommends checking the math after plans provide the information. "Do your homework and design your own spreadsheet with the calculations," she says. "You will sometimes find that the plan doesn't pay consistently, even when it says it reimburses at a certain percentage above Medicare."
Gary Gross, an allergist in Dallas, says that his office hasn't had much difficulty getting plans to provide reimbursement schedules. "We simply provide a list of codes and charges that are based on our indemnity reimbursements, and plans respond with their reimbursement per code." He adds that this method is more successful than expecting a complete list of allergy codes. "Most plans don't seem to have a pre-made list, but when we send one with our reimbursements, they respond without much fuss."
Hit a roadblock?
What if, despite your best efforts, you truly can't get reimbursement data from payers? "A last ditch effort is to build your own database using information from explanation of benefits (EOB) forms, as well as by calling and asking for allowables when you precertify procedures," recommends Nykyforchyn. "Over time, you'll develop a database of reimbursements that you can use in future analyses."
Managers and physicians agree that collecting reimbursement data can be time-consuming, but that it is time extremely well spent. Case in point: Carolyn Waters, administrator of Sierra Neurosurgery Group in Reno, Nev., reports, "after we obtained the reimbursement schedule for one local PPO, we identified approximately $35,000 in underpayments in just the first six months." That's a considerable boost to your bottom line.
Don't stop at asking only for reimbursements for each CPT code, especially if yours is a surgical practice. "Make sure you find out what the plan reimburses for the modifiers you use most," recommends Haralson. "For example, does the plan pay 100 percent of a code with a -51 modifier on the first procedure, and 50 percent for the second, third, and fourth? Or, does it pay 100 percent on the first procedure, 50 percent on the second, and 25 percent on the third and fourth?" Without this information, staff cannot be certain that the practice is being paid correctly over the long run.
Bever adds that obtaining reimbursement for unlisted procedure codes is important, too. "Don't make unlisted code reimbursement a guessing game," she says. "You need to know how much will be reimbursed if a code is submitted without a specific CPT code." If plans won't provide reimbursement for unlisted procedure codes, Nykyforchyn suggests obtaining the information prior to performing the procedure, instead of waiting for the EOB to arrive.
Gross suggests that if practices do run into roadblocks obtaining schedules, "try the state medical society, specialty society, or insurance commissioner. You need access to reimbursement data to do business, and the societies may offer information about other physicians in your specialty who are having the same problem."
Now, use the data
You've done your homework and are in receipt of plan reimbursement schedules. What now? "The most important thing is to enter the schedules into the practice's computer system," says Bever, "so you can be sure you are being paid accurately. If you think your system cannot maintain this data, call your vendor and ask. Many practices think they can't enter the data, when in fact they can."
Better practice management systems allow you not only to enter the data, but also to use a feature that alerts payment posting staff when they attempt to post a payment that is "underprofile" based on the reimbursement schedule entered. "This automated system can catch thousands of dollars of underpayments," Bever notes. But if your practice is working with a system that doesn't have this automated feature, there are other ways to use the reimbursement schedules.
Nykyforchyn says her old system made the maintenance and use of reimbursement schedules too labor intensive. "Instead, I developed an Excel spreadsheet that I update each time we receive a new reimbursement schedule," she says.
Bever adds that if your group is large, or you have many payers and codes, there is a way to automate the spreadsheet itself. "One of our large academic clients created an Excel workbook that included an individual worksheet for each payer. Staff simply open the appropriate worksheet and enter the CPT code into Excel's "find" function. The computer automatically takes them to the specific reimbursement for the code."
It's a lot of work, but worth it for long-term planning. Gross finds reimbursement schedules invaluable for analyzing whether to cancel or stick with contracts. "We developed a spreadsheet that compares reimbursements for all plans," he says. "We evaluate plans on a regular basis, consider both reimbursements and 'hassle factors,' and drop the ones that require more overhead and pay less."
Of course, dropping a plan will be a practice's individual decision, but gathering the data about each plan is good business for all practices. Finally, reimbursement data can also be used to analyze your own fees. "An annual analysis of reimbursement schedules against practice fees will ensure you aren't charging less than plans pay," says Bever. "If you find that fees are equal to or below plan reimbursements, it's time to update them, preferably using a system that is based on RVUs."
Cheryl L. Toth can be reached at firstname.lastname@example.org.
This article originally appeared in the September/October 2001 issue of Physicians Practice.