Calculate, negotiate: Pay heed to your non-CMS fees

Physicians regularly miscalculate their non- Medicare fees, which means that revenue is slipping away. Have you reviewed your fee schedules lately to determine if you’re getting proper reimbursement for all your services? Now is a great time to take a look and make appropriate changes for 2009. Here are some steps to determine if private payers are reimbursing you at a fair rate.

• Measure and document what you can control.
• Determine your total overhead expenses.
• Separate physician work, including physician salaries and benefits as well as any bonuses, and practice expense such as staff salaries/benefits, space expenses, office supplies, and medical supplies.
• Calculate your cost per relative value unit (RVU).
• Calculate cost for visit services; calculate cost for treatments and procedures; calculate total cost per treatment.
• Compare your practice revenue with your costs. Be sure to include Medicare and non-Medicare.
• Review what is going on outside your practice.
Performing this review annually will help you set practice benchmarks and perform sound measurements for decision-making. Once you’re done, review your current private payer fee schedules in order to determine whether they measure up to your current costs.

Here are some common FAQs about costs:
Q: What should you expect as payment from non-Medicare payers?
A: We believe private payer reimbursement should be at least 30% above Medicare.
Q: Should you utilize the “loaded” Medicare fee schedule as your basis for negotiating a contract with non-Medicare payers?
A: No Instead, use the unadjusted RVU data because the geographic adjustment factor could potentially lower your payment.
Q: Should you accept the non-Medicare payer contracts as is?
A: No! Remember to calculate and negotiate. If you document the true reimbursement rate, you have more leverage to negotiate with payers. You should include the following:
• Data for expenses-make sure that yours are covered.
• Data that outlines the exact reimbursement amount and details why you are requesting that amount.
• Comparison data on reimbursement for other payers.

Visit neltnerbilling.com for an example of how to calculate fee schedules.