Do you ever get the feeling that just when you learn the rules, they change? That’s the way it seems to be with insurance processing. Setting fees and conforming to all the different laws and regulations regarding fees has become an overwhelming task. To make matters worse, the laws and regulations sometimes seem to conflict.
One tool that can help you manage various fee schedules is the right kind of practice-management software. In any case, you must first understand the regulations, so you and your staff are comfortable with multiple fee schedules. The fee schedules should be set up so they can be modified easily.
When it comes to managing multiple fee schedules, the following “rules” seem to hold true regardless of the state in which you practice.
You cannot charge an insurance company a higher fee than you would charge a patient who paid cash at the time of the visit. This is the most important rule in a series of rules that apply to fees and insurance reimbursement. Most doctors argue that a higher fee is justified by the carrying charge of accounts receivable and the labor involved in billing the insurance company. While this type of reasoning makes sense in principle, it conflicts with state insurance statutes. In fact, insurance commissioners will confirm that this practice is considered fraud in most states.
Because of this law, offering cash discounts and family plans steps into a gray area. I once consulted with a doctor who posted his fees on a board behind the front desk. It read, “Office Visit: $35”; and “Cash Discount: $30.” My first recommendation was: Take down the sign — immediately! The doctor ignored my warning. A month later, he called distraught Almost half his patients were accident cases; because of the high volume, the insurance adjuster made a surprise visit to his clinic. Upon reading the sign, she promptly lowered his reimbursement. The doctor wanted me to help him fight the insurance carrier, but I could offer no assistance. The insurance adjuster was within the law.
You can offer discounts to a certain “class” of patients, as long as you offer them to everyone in that “class,” regardless of insurance coverage. You must first define the class. For example, you could offer a 50% discount to all children under 18. Or you could offer a college student discount of $15 per visit.
Ces Soyring, instructor at Texas Chiropractic College explains, “My understanding is that discounts — in and of themselves — are not illegal as long as they do not break a contract between the carrier and the patient. In other words, if the doctor gives all firefighters a 20% discount, it must come off the gross, not just the patient portion.” This type of discount must be given to every patient in the defined class, regardless of insurance coverage.
Signing a participation contract with a particular insurance carrier determines the approved amounts and write-offs (or adjustment) for each service. For example, providers usually have the option of signing a participation agreement with Blue Cross Blue Shield and Medicare in their state. By signing the agreement, the providers can bill Blue Shield their regular fee for each service. However, the provider must write off or adjust the difference between the fee and the amount approved by Blue Shield. In this scenario, providers are expected to collect the deductible and co-pay amounts owed by the patient. Under a participation contract, doctors can also charge the patients directly for non-covered services. Of course, Medicare goes one step further and requires that the provider warn the patient of the potential of non-covered services.
One of the biggest questions asked about insurance plans is, “Should I participate with Blue Shield or Medicare?” There simply isn’t a pat answer to that question. The decision has to be individual, based not only on the advantages/disadvantages of participation, but also on the trends in your town. If every other doctor in your area is participating, it’s hard not to join the crowd.
If you do not participate with Medicare, you cannot charge more than your limiting charge. In this scenario, Medicare is setting the fees that can be charged to the patient. Because Medicare requires that providers submit claims for reimbursement even if they are not participating with Medicare, the fee submitted cannot be higher than the limiting charge.
This rule can wreak havoc for most practice-management systems, since it requires a dual fee system. If your normal fee for a 98940 were $35, you would bill this charge to most insurance companies. However, if you do not participate with Medicare, you would have to bill the limiting charge, which is usually less. Unless your software supports multiples fee schedules organized by insurance carrier, you have to set up separate procedures for each carrier and then hope your chiropractic assistant chooses the right procedure. A system that supports multiple fee schedules will automatically bill the correct charge based on the insurance carrier. In this example, Blue Shield would be billed $35, and Medicare would be billed $29.95 for the same procedure code, 98940. Using the appropriate software to manage multiple fee schedules can help reduce human error, which can decrease the chances of an audit.
Chiropractors cannot “opt out” of Medicare entirely, but medical doctors can. No matter how you look at it, this rule is unfair. According to Transmittal No. B-98-29, dated July 1998, which explains §1802 of the Social Security Act, a medical doctor or osteopath can notify Medicare that he/she chooses to opt out. At that point, the doctor must prepare an Advance Beneficiary Notice that the patient signs, indicating that Medicare will not reimburse for services that would otherwise be reimbursable. This notice becomes a contract between the patient and the doctor. Unfortunately, this “opt out” clause specifically excludes chiropractors.
If chiropractors treat Medicare patients, it must be on a participating or non-par status, and Medicare must be billed by the provider. That is the law.
There are always exceptions to the rules. Except for the circumstances listed previously, you should bill your regular fee to every insurance carrier — unless you are required to limit your fee to a specific fee schedule. In some states, workers’ compensation requires you to bill no more than the amount on their fee schedule. If you bill more, they reject the claim. Likewise, many preferred provider organizations (PPOs) have based their contracts on specified fees. If you choose to belong to the PPO, you have to adopt their fees when billing insurance carriers in their group.
To add more complexity, you need to be able to evaluate whether belonging to a managed-care group makes sound financial sense for you. You need to be able to track the number of patients with this type of insurance coverage and compare the amounts received against a standard fee-for-service arrangement. Obviously, if you get a lot more new patients by belonging to the managed-care group, sheer volume can make up the difference. If not, you may want to terminate your contract.
Follow the KISS philosophy: Keep it simple, silly! At one time, CPT codes were being suggested that reflected the type of table used during the adjustment. Why? The theory was that you deserved more reimbursement per adjustment if you were using a more expensive table. Quite frankly, I am glad that these codes were never adopted. The simpler you are able to keep your fee structure, the better off you are.
Soyring sums up his philosophy about fee-setting: “My opinion is set your fees to what you think you are worth and then collect it from everyone — but then again I’m a radical thinker! The less hassle, the better, in my book.”
