What is the Importance of a Medical Fee Schedule and What Factors is it Based On?
The medical fee schedule is a list of health care procedures and services and charges associated with each. The fee schedule signifies approved payment levels in a given insurance plan. It is based on 3 commodities that physicians provide: Judgment, time and service. Each and every medical practice verifies the fees that will be charged for procedures performed and is based upon a number of factors such as the physician’s experience, the specialization, the cost of supplies or practice and the economic level of the community.
Medical fee schedule system is one kind of Medicare arrangement that determines how much should be paid to medical providers. The medical fee schedule is based on the “Resource-Based Relative Value Scale or RBRVS. It is a scheme that assigns a qualified value to a course of action that the medical provider or the physicians perform. The relative value will be adjusted by geographic region in order to compensate for the different medical costs in various states.
What is the importance of a medical fee schedule? And what factors are these dependent on?
A medical fee schedule catalogs the maximum cost for which a health plan will pay for the services rendered, it is based on the CPT billing system. It is important on the part because it will help determine the quantity of fees to be charged to the patient.
In addition, a medical fee schedule is what doctors charge to increase revenue and uplift their practice. Previously, the start of managed care, medical practitioners reviewed fee schedules on a regular basis since majority of the commercial payers base their reimbursement on the usual, customary and reasonable charges by comparable specialty physicians in similar geographic areas. Therefore, to uphold reasonable reimbursement, it is important for medical practitioners to ascertain their fees to not fall behind what is considered to be the usual, customary and reasonable payment. .
Even in managed care, the annual medical schedule fee is very important to have a positive outlook on revenue practices. However, there are steps in coming up with a fee schedule analysis. Firstly, you must review the explanations of benefits coming from commercial carriers. The review must compare the fee being charged by the practice for the highest 20 procedures to the insurance company’s acceptable fees. If the fee is reimbursed in at least 100% of the fees charged then it is a good indication that the practice fee is lower than the amount the carrier determines to be customary and reasonable.
By using the RVU method in establishing the fee, the practice is able to bring to date all the fees by revising the multiplier or conversion factor. Conversion factors and RVUs are all subject to change on an annual basis. The proposed RVUs for the year 2007 is 1.66. Back then the conversion factor is to lower, but during the previous years, such has been subject to change.