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starting a new practice faq:

finances/reimbursement


There are numerous ways to determine your fee schedule, such as percentage of Medicare and/or using the resource-based relative value scale (RBRVS). CAFP is prevented from gathering or disseminating specific fee schedules used by family physicians in California due to federal antitrust laws. Fee schedule information is available from a number of businesses, including:


Optum 360 Coding, 800-464-3649 or

Practice Management Information Corp., 800-633-7467

Physicians Practice has a fee schedule worksheet. Look in the "tools" section.

Some information may also be available at Facts About Family Practice, Section VI, Economic Status of Family Physicians

An experienced practice management consultant can also guide you in the development of your fee schedule. Contact Sonia Kantak for a referral.
Non-HMO health plans such as PPOs are required to pay non-contested insurance claims within 30 working days of receiving claims. Knox Keene health plans including HMOs and IPAs are required to pay claims within 45 working days. (This assumes, however, that you have not agreed to a payment time frame greater than these limits in any contracts you may have signed with HMOs and other insurers.) Knox Keene health plans and IPAs that pay claims late are required by law to pay 15% interest per year on all late payments beginning on the first day after the 30-day (or 45-day) window. In addition, Knox-Keene plans that fail to pay interest automatically are subject to a $10 per claim surcharge (Health and Safety Code section 1371). Health insurers are required to pay interest at 10% annually (Insurance Code section 10123.13.)

Non-HMO health plans must notify providers within thirty working days if a claim is to be contested or denied. HMOs must do the same within 45 days. If you receive neither notice of a claim being contested/denied nor payment, you will need to write a demand letter requesting payment with interest, as per California law. To request a sample demand letter, send your fax number to Sonia Kantak.
Rules pertaining to direct billing and "incident-to" services by nurse practitioners and physician assistants were updated in the Balanced Budget Act of 1997. AAFP's Coding & Reimbursement Manager, Kent Moore, wrote helpful summaries about getting reimbursed for NP services and PA services.
Routine waiver of co-pays or deductibles required by managed care plans may be viewed as a breach of your contract with the plan. Offering self-pay patients a discount is permissible, but there are some guidelines you should follow. Many payors, including Medicare, limit reimbursement to your "usual" fee. Discounting lower than the Medicare allowable for any service could result in the claim that your Medicare fee should be lower than the allowable fee. Other payors could also contend that your discounted fee is your "usual" fee if charged frequently. The use of multiple fee schedules can thus cause problems. Discounts given for self-pay patients paying at time of service are defensible, since the discount usually reflects related collection costs. Across-the-board discount policies of any type should be carefully considered, but physicians do have the right to waive payment for cash-paying patients due to financial hardship.
Generally, you can offer self-pay patients a discount but there are some guidelines you should follow. First, and most importantly, you should only have one fee schedule for all patients. The use of multiple fee schedules is strongly discouraged. You should not discount lower than the Medicare allowable for any service. Discounts given for self-paying patients paying at time of service are generally safe, since the discount is usually equivalent to related collection costs. Across-the-board discount policies of any type should be discouraged, but physicians do have the right to waive payment for cash-paying patients due to financial hardship.
Your options are to 1) refuse to provide the insurance company with your TID# or 2) provide it and hope/assume that the insurance company will keep track of the fact that it reimbursed the patient and thus not issue a 1099 for you.

If you choose option 1, insurance companies may refuse to pay the claim, leaving your patients out the money they paid for services for which they thought they were covered. Insurance companies may reserve the right to reimburse only providers--have your patients check their policies and see if this is a possibility. The upside of not providing your TID number to the insurance companies is that this is the *purest* form of a cash-only practice, and makes the accounting relatively simple. You should still be able to grow a cash-only practice successfully despite the possibility of denied claims.

If you choose option 2 (to give your TID# to insurance companies), you will have to keep close accounting of the money you receive from patients for care, in the event that for some reason the insurance company reports their reimbursement to patients as income to you. If the insurance company issues the check to you instead of the patient (accidentally), you will also have to deal with that. (Have the check reissued, credit the patient, etc.) I'm guessing that this is what you wanted to avoid when you set up your new practice.

You may want to consider sticking by your guns and issuing a superbill with ICD-10 and CPT codes, leave it at that, and hope for your patients' understanding if the insurance company refuses to pay the claim without your tax i.d. number.