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Fee schedules, RVU’s, and payer negotiation tips: The numbers are in.

Posted Feb 10 2009 11:03am

If you provide healthcare services, getting paid isn’t quite as easy as falling off a log. 

In fact, as you already know - getting paid for services rendered is quite complicated.  Out of this complex system of fee schedules, RVU’s, payer negotiation, and co-pays, the specialty of billing/coding has been borne, and with it, the cost of care has gone up, up, up.  Far worse though, the complexity of the reimbursement system has left many in private practice without the resources necessary to overcome payment hurdles, causing many excellent practitioners to return to employed positions or to leave the profession altogether

Fleeing the fiduciary responsibility that coincides with being a practice owner allows those frustrated or confused by the reimbursement system to no doubt breathe a momentary sigh of relief, but this sigh is undoubtedly accompanied by some measure of regret for having lost the ability to implement a vision for healthcare as they see it best.

Well, this is why we exist, and why I’m blogging about this topic right now.  A little bit of knowledge can go a long way when it comes to managing the reimbursement of a private practice, and for those that are interested,  this article from Physician’s Practice is a gem.  It boils down fee schedules and RVU’s by the numbers, providing recent benchmark figures as well as some very practical payer negotiation tips.

I highly recommend you take a peek at the article as it could be just what you need to get “in the know” about your reimbursement cycle.

The state of physician reimbursement is pretty depressing. That’s hardly a surprise, we know — but our exclusive research is shedding new light on just how bad it is out there. For starters, commercial insurers’ payment rates, which have been declining for years, are now almost as bad as government pay — on average nationally, a mere 10 percent or less over Medicare for E&M codes. Our annual Physician Fee Schedule Survey reveals that average reimbursement for a 99213 — a midlevel established office visit — is just $71.67, a tad better than Medicare’s $59.80 national rate.

Unfortunately, some practices aren’t sure what they themselves are getting from some payers, much less what a given insurer is paying generally. “It baffles me frankly, but those payers will get you to sign a contract, but they won’t give you the data about what they are reimbursing,” Reiser points out. He suggests approaching the problem with a spirit of fun and doing a bit of “reverse engineering.”

Ask payers for allowables for your top 10 codes — or study your EOBs to see what they pay. Take their rate for each code and divide it by the RVUs Medicare gives the code in its fee schedule. The result essentially gives you the payer’s conversion factor — the number it multiplies RVUs by to come up with a payment. “If you do it for all the codes you have, you’ll see the conversion factor they are applying is pretty close across all codes,” promises Reiser.  There will be some variation, but a median will become clear. Apply that conversion factor across every code and you’ll have a full fee schedule by payer.

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Tannus Quatre PT, MBA is a practice consultant and principal withVantage Clinical Solutions, Inc., a national healthcare consulting and management firm based in Oregon and Colorado.  Tannus can be reached through the Vantage Clinical Solutions website byclicking here.

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