Setting your fee schedule when you take insurance.

Charges, allowed amounts and payments

Three numbers sit on every insurance claim, and new practices often blur them:

• Your charge is what your fee schedule says the service costs. It is the same on every claim for that code.
• The allowed amount is the most the payer will recognize for that code under your contract.
• The payment is the allowed amount minus the patient’s share: deductible, coinsurance or copay.

The difference between your charge and the allowed amount comes back on the remittance as a contractual adjustment, usually CO-45, and an in-network practice writes it off. The guide to reading an ERA shows the arithmetic on a real line, and the guide to what the patient owes covers the patient’s share.

One schedule, set above every allowed amount

Medicare bases its payment on the lesser of your actual charge and its fee schedule amount. Many commercial contracts use the same “lesser of” rule; look for it in yours. The consequence is simple: if your charge for a code is below what a payer would allow, you are paid your lower charge, and the difference is gone for good. Nothing on the remittance tells you so.

So set one charge per code for every payer and every patient, at or above the highest allowed amount you expect from any payer. Different charges for different payers invite questions you do not want to answer, and they make your remittances harder to read.

How to set the numbers

1. List the codes you bill. For most chiropractic practices that starts with the CMT codes 98940, 98941 and 98942, new and established patient office visits, and the therapy and imaging codes you use.
2. Collect the allowed amounts. From each contract’s fee schedule, and from Medicare’s Physician Fee Schedule look-up for your locality, even if you do not bill Medicare yet; it gives you a public benchmark for every code when a payer’s schedule is slow to arrive. Medicare’s Physician Fee Schedule look-up tool shows payment rates by code, locality and year, including the limiting charge.
3. Take the highest allowed amount for each code. Set your charge at or above it, with room for next year’s increases.
4. Write it down with a date. One schedule, one effective date, loaded into your EHR so every claim carries the same charge.
5. Review it every year. Payers update their fee schedules, and Medicare updates its own each year. A charge that was safely above every allowed amount last year can fall below one this year.

Cash patients, discounts and copays

Most practices that start taking insurance keep cash patients too, and this is where the rules get sharp. Talk to a healthcare attorney before you set cash prices that differ from your fee schedule. Three rules in particular:

• Routinely waiving copays and deductibles. The HHS Office of Inspector General has warned that a provider who routinely waives Medicare copayments or deductibles is misstating its actual charge. A copay can be waived for a particular patient, but not routinely and not as part of any advertisement, and only after you determine in good faith that the patient is in financial need or after reasonable efforts to collect it have failed. Check your commercial contracts for their own terms on waivers.
• Your usual charges. Federal law lets the OIG exclude a provider that charges Medicare substantially more than its usual charges without good cause. The OIG has also said it has never excluded a provider for offering bona fide discounts to uninsured patients. Write your cash pricing down and apply it the same way to everyone it covers.
• Good faith estimates. Under the No Surprises Act, a patient who is uninsured or paying for themselves is owed a good faith estimate of expected charges: within one business day of scheduling when the visit is booked at least three business days ahead, within three business days when it is booked at least ten business days ahead, and within three business days of the patient’s request. The rule covers providers acting within their scope of practice under state law; confirm with your attorney how it applies to your practice.

State insurance and professional rules can add their own limits on discounts and dual pricing, so check your state as well.

If you see Medicare patients

A chiropractor can be participating or non-participating with Medicare. A non-participating provider that does not accept assignment can charge a Medicare patient no more than the limiting charge: 115% of Medicare’s non-participating fee schedule amount, which is itself 95% of the full fee schedule amount. The look-up tool shows the limiting charge for each code. The guide to payer enrollment covers enrolling with Medicare in the first place.

How Claims Native uses your fee schedule and contracts

During setup we record your payer contract rates from your contracts and fee schedules, and we check each rate against its source. After that, we check each payment against your contract. When a payment comes in below what your contract supports, the difference stays open, and we go back to the payer for it. A short payment does not become a patient bill by default.

Sources

• 42 CFR 414.21: Medicare payment of Part B services. The lesser of the actual charge or the fee schedule amount.
• CMS, Physician Fee Schedule look-up tool.
• CMS, MLN901344: How to use the Medicare Physician Fee Schedule. Non-participating amounts and the limiting charge.
• HHS Office of Inspector General, Special Fraud Alert on routine waivers of copayments and deductibles.
• 42 U.S.C. 1320a-7a(i)(6)(A): the exception for waivers based on financial need.
• HHS Office of Inspector General, Notice on discounts to uninsured patients and usual charges (2007).
• 42 U.S.C. 1320a-7(b)(6)(A): exclusion for charges substantially in excess of usual charges.
• 45 CFR 149.610: good faith estimates for uninsured and self-pay individuals.
• CMS, Good faith estimate requirements.