A tiny excerpt on medical fee setting ----Posted by Pauline on 5/18/03 at 14:18 (119196)
Knowing what your services pay and how your services are billed will give you more control and knowledge of your practice and your income in this setting as well. While antitrust issues disallow you to find out what a colleague on the other side of town charges, you fortunately have a standard by which to measure what you can charge.
The RVU or relative value unit system exists to create more uniformity based on regional, demographic data that allows you to standardize your office fees. Most practices have an RVU schedule for standard E&M (evaluation and management) services and another for procedural services.
For example, a 99213 is worth approximately one RVU. If you charged $70/RVU, the 99213 would be billed out as $70. If your procedure codes were set at $100/RVU and you did a procedure that was worth 2.5 RVUs, then the bill would be $175 (2.5 x $70 = $175). The amount designated to multiply against the RVU is up to your practice. It should never be less than what Medicare will reimburse you and really should be at least as much your best payor reimburses.
The only downside to having it set rather high is the write off at the end of the year. However, as you will see below, depending on your payor mix, it could benefit you to have higher rates in the long run.
This article will focus on issues surrounding reimbursement and help to more clearly elucidate, and correct some routine practices that could border on illegal or potentially fraudulent practice. Remember that these are general guidelines. Each state varies in its individual regulations. Thus, check with a healthcare attorney, your specific payors and/or your state and specialty medical societies for more specific information as it pertains to your particular practice issues.
'The amount designated to multiply against the RVU is up to your practice. It should never be less than what Medicare will reimburse you and really should be at least as much your best payor reimburses'.
Re: A tiny excerpt on medical fee setting ----Richard, C.Ped on 5/19/03 at 08:44 (119255)
Intresting. I am in a number of insurance networks as well as accepting assignment for Medicare, so I go by their allowable when billing.