In the world of compliance and reimbursement, we often focus on medical record compliance to survive an audit. However, how you establish a fee schedule is just as important—but rarely discussed. The schedule must be structured in an objective fashion that ensures you are paid fairly for the services you perform. 

The first of the year is a great time to review your processes and make adjustments to boost your practice’s success in the coming year. Let’s start off by discussing how you might look at your fees in a new light.

It’s Just Math, Not Rocket Science

Analyzing and setting your fees should be an analytical, objective process that is done at least twice a year. However, many physicians are unsure how to properly handle the fee restructuring process and fall back on setting fees in a haphazard fashion such as calling other doctors to price shop or, worse yet, not performing any analysis at all. 

The reimbursement methodology used today has been in place since 1992 with the initial rollout of the resource-based relative value system.1 This introduced the concept of each CPT code having a relative value unit (RVU) composed of three areas: work, practice expense (PE) and malpractice (MP).1 

It also takes into account cost of living differences based on geographic location. It uses the geographic practice cost index (GPCI) and a conversion factor (CF) to ultimately convert a geographically-adjusted CPT RVU value into dollars. Using this system, CMS established the following formula for their physician fee schedule:

2018 non-facility pricing amount = [(work RVU x work GPCI) + (non-facility PE RVU x PE GPCI) + (MP RVU x MP GPCI)] x CF

Understandably, most people look at this complicated math equation and turn a blind eye—continuing to set their fees without understanding the implications of this system. 

However, this methodology is the key to uncovering a fair amount of stealth reimbursement for your practice. Automated tools exist to help you manage this math, and some allow you to compare your fee with CMS’s maximum allowable reimbursement and with the range of reimbursements from your contracted medical carriers. Armed with this information, you can then set your fee appropriately.2

CMS Isn’t the Only Game in Town 

Many make the assumption that CMS is the highest paying carrier in their area and simply set their fees as a percentage of the Medicare maximum allowable. By not including your other contracted carriers in your analysis, you may be leaving significant dollars on the table, considering their reimbursed rates may be higher than Medicare.

One Code, One Fee

Remember, the golden rule is one fee charged per CPT code. That means if I set my fee for 92004 at $150.00, I must charge everyone who gets a 92004 the same price without bias or discrimination—that includes my non-insured patients. Clinicians must respect the rules and regulations regarding time of service or prompt pay discounts; ignoring these may put you in jeopardy with your carriers. With insured patients, if the charged rate exceeds the contracted reimbursed rate from a specific carrier, the difference is generally adjusted off and not billed to the patient.

Vigilance = Profit

Just as with most things, when you pay attention to something your performance generally increases. Even small changes to your fee schedule can add up to significantly better cash flow and profitability over a year. Don’t let complacency affect your bottom line. If the math seems daunting, use an automated tool to help you manage this very important, but often overlooked, area within your practice. 

Paying proper attention to the value of your intellectual property can start 2018 off on the right foot, and diligent monitoring can lead to better business decisions for a long time to come.

Send questions and comments to

1. American Medical Association. RBRVS Overview. Accessed November 21, 2017. 
2. Practice Resource Management Inc. Accessed November 21, 2017.