Once you maintain consistency while setting up your fee schedule, it helps to calculate yield with help of simple calculations and this yield can be easily applied to AR to gain an estimate of what you should collect. One key element of a fee schedule is keeping consistency. You should periodically update the fee schedule for your practice to ensure that your billed charge is higher than the allowed amount hence you should opt for the following steps when setting it. While, if you’re charging a payer less than the allowable, you have no sure way of knowing how much you should have billed out. If you have charged less than what Medicare allows, you may develop a false sense of prosperity since you’re collecting 100% of what your billing commercial payers, many of whose allowables are higher than Medicare’s. Knowing your allowablesĪt least you should know what Medicare allowables are. In this blog, I will be focusing only on setting the overall fee schedule for the practice once you know your allowables. Most payers determine fee schedules first by establishing relative weights (also referred to as relative value units) for the list of service codes and then by using a dollar conversion factor to establish the fee schedule. Typically, the payment is the lower of the provider’s actual charge or the fee schedule allowance. Let’s start with a basic understanding about the fee schedule: What is the fee schedule?Ī fee schedule is a list of the maximum rate a payer will allow for services, with the definition of services based on code sets such as CPT (Current Procedural Terminology) in the United States. Are you following an outdated fee schedule for medical practice and missing out on revenue? It is observed that many practices are suffering revenue losses because of their existing fee schedule and not knowing that fact that updating fee schedule for medical practice would improve their bottom line.Īfter reading this blog you can easily set a fee schedule for a medical practice to collect every penny of your practice.
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