r s & k consulting, llc

po box 2161

minden, nv  89423

phone:  775-267-5345   fax: 775-267-5415   cell:  775-721-0457  e-mail: bob@rskconsulting.biz

contract management specialist

 

 

 

fee schedules

 

 

there are two important areas for review in contracting with managed care companies; 1. the actual language in the contract and 2. the other is the amount they are contracting for, i.e. the fee schedule. 

 

the most desirable schedule would be for the billed charges, but that is unlikely to occur in today’s market.  the second choice would be for a percentage discount from the billed charges, but this form is found, generally, in rural areas or if a provider is a super specialist such as a pediatric gastroenterologist or gynecologic oncologist to name a couple.  the majority of the fee schedules are based on the relational based relative value study (rbrvs) utilized by medicare or ingenixes relative value for physicians, formerly known as mcgraw-hill.

 

because medicare utilizes the rbrvs and has become the “gold standard” for the insurance and managed care companies due to the reductions seen on an annual basis.  the reductions are both to the relative value units and the conversion factor that are tied to the balanced budget act of 1997.  the reductions decrease the provider’s income but fail to account for increases in operating expenses, such as supplies, wages, heat and light, etc.

 

careful analysis of the various fee schedules in comparison to current year medicare payments for the same procedures, will allow a better evaluation of the actual revenue generated by each contract.  the best way is to “weight” each allowed amount so one part of the practice, office visits versus surgery for example, does not skew the results with higher values for one area over another.  this method is the way the insurance and managed care actuaries develop and compare allowed amounts.

 

i utilize this same method to develop a working spreadsheet so you as the medical provider has a clear picture of where your payments are in comparison to other insurances and medicare.