Unique fee schedule for Medicare/Medicaid

July 1, 2008

Is it legal for a practice to charge Medicare/Medicaid according to one fee schedule and to charge commercial carriers at another fee schedule? My office would have two fee schedules. The reason is that the allowable from CMS and some of the commercials are so varied, especially for surgery, that the practice is concerned that Medicare/Medicaid may see it as overcharging CMS. I am aware the OIG is unsuccessfully pushing for Medicare charges to exceed no more than 120 percent of the allowable amount. In this scenario self-pay patients would be charged a fee equal to the Medicare allowable or up to the limiting charge (115 percent) of the Medicare allowable depending on practice.

Question: Is it legal for a practice to charge Medicare/Medicaid according to one fee schedule and to charge commercial carriers at another fee schedule?

My office would have two fee schedules. The reason is that the allowable from CMS and some of the commercials are so varied, especially for surgery, that the practice is concerned that Medicare/Medicaid may see it as overcharging CMS. I am aware the OIG is unsuccessfully pushing for Medicare charges to exceed no more than 120 percent of the allowable amount. In this scenario self-pay patients would be charged a fee equal to the Medicare allowable or up to the limiting charge (115 percent) of the Medicare allowable depending on practice.

Answer: There is no legal reason not to charge Medicare/Medicaid more than they pay. It is your usual and customary charge. Furthermore, you run the risk of commercial payers insisting that what you charge Medicare/Medicaid is your usual and customary charge, and they’ll happily pay you the same.

Plus, you run the risk of making mistakes and charging wrong. And, your gross collection rate will be whacked out. Why try to solve a problem that does not exist? There are enough problems that do exist.