The Basics of Fee Schedule Optimization
We’re delving into a topic that's crucial for the growth of your private practice: Fee Schedule Optimization. As a mental health professional, you dedicate your time to improving the lives of your clients. But it's equally important to ensure your practice thrives financially. That's where we come in, and that's where your revenue cycle management strategy plays a vital role.
At Practice Solutions, we understand the unique challenges mental health therapists face when it comes to billing for services. Our expertise lies in helping you optimize your fee schedule, allowing you to focus on what you do best: providing exceptional care to your clients.
What is a Fee Schedule?
A fee schedule is a comprehensive list of fees charged for services provided. In mental health billing, Current Procedural Terminology (CPT) codes and Healthcare Common Procedure Coding System (HCPCS) codes are used to identify various services. For instance, CPT Code 90837 represents a 60-minute psychotherapy session, while CPT Code 90847 denotes family psychotherapy (without the patient present). A fee schedule refers to two distinct sets of rates within your practice. There is a fee schedule that the insurance companies provide to in-network providers on a contract basis, and there is a fee schedule that a therapist dictates based on cash-pay or private pay clients. These fee schedules drive what you charge, or can charge, to clients. They represent the foundational building blocks of your private practice.
What is Fee Schedule Optimization?
Fee schedule optimization is the regular review and adjustment of fees as business expenses change and insurance fees increase or decrease. By engaging in a thorough and academic process of reviewing your fee schedules for private pay clients and insurance-based reimbursement, you ensure that you are competitive in the marketplace. It is well understood that therapists have some of the lowest reimbursement rates of any healthcare provider vertical in the United States. Since mental health providers are paid lower than other professionals, it is important to always review and optimize your fee schedules for your desired annual income, your business expenses, and changes to insurance reimbursement.
Tips for Fee Schedule Optimization
1. Know Your Worth
Evaluate your expertise and the services you provide. Ensure your fees reflect the value you bring to your clients. Don't undervalue the impact of your therapy sessions. Calculating what your hourly rate should be can be complicated but we recommend the following formula:
This rate should give you a general idea of what your hourly rate could be but will take a little bit of time to calculate if you don’t know your business expenses. Once you have the variables for this equation you should be able to calculate what your hourly rate is.
2. Stay Updated
Keep updated of changes in CPT and HCPCS codes. Regularly update your fee schedule to align with the current industry standards. This ensures accurate billing and prevents revenue loss. You can stay updated on the changes to codes by browsing the CMS website. This will give you the most up-to-date information on any changes with the code sets. You can also check to see if there have been updates to the Medicare or Medicaid fee schedules on the website.
3. Review Payer Contracts
Familiarize yourself with the contracts you have with insurance companies. Understand their reimbursement rates and tailor your fees accordingly to maximize revenue from insurance claims. You should have received your fee schedules from the insurance companies that you credentialed with when you received your contract, but in the event that you didn’t you can request them from your provider area consultant.
4. Document Thoroughly
Accurate documentation is key to successful billing. Ensure your session notes are detailed, outlining the services provided and the therapeutic interventions used. Proper documentation supports your claims and prevents denials. For fee schedule optimization, there are two pieces of documentation that you must have in order to do a thorough fee schedule review.
First you will want to review the records of what you have been paid from insurance for your services. Usually, this is in the form of an EOB or ERA. Most electronic health records allow you to pull a spreadsheet of this information to give you a bird’s eye view of the reimbursement to your practice.
The second piece of documentation you must have is the record of payment that clients have paid to your practice. The combination of both of these documents will give you a clear picture of the reality of what your practice has been paid.
Once you have this information in hand, then you can start to conduct fee schedule optimization, but only if you have documented this information thoroughly throughout the year.
5. Streamline Your Process
Implement efficient billing and coding processes. Timely submission of claims and quick resolution of denials are essential for a healthy revenue cycle. Does it seem like pulling teeth to get therapists to submit notes on time? Is the billing process of your private practice unclear to you? If the answer to one or both of those questions is yes, then it will be difficult to get a clear picture of your fee schedules because you won’t know if a process change would yield different information on your reimbursements. Instead, if you have consistent discipline around submitting claims, posting payments, and collecting from clients you will have a much easier time determining what you need to charge.
Practice Solutions Supports Your Fee Schedule Optimization
At Practice Solutions, we specialize in outsourced revenue cycle management for mental health practices. Our team of experts understands the intricacies of mental health billing, including the nuances of CPT and HCPCS codes. By partnering with us, you not only optimize your fee schedule but also gain access to a wealth of industry knowledge.
Take the Next Step
Ready to unlock your practice's full potential? It’s time to take action. Contact Practice Solutions today and let us handle your billing needs. With our tailored solutions and expertise, you can focus on your clients, knowing that your practice's financial health is in good hands.
Remember, your dedication to your clients is your strength; let us support you in building a thriving and financially stable mental health practice. Don't wait; your practice deserves the best. Reach out to Practice Solutions now and embark on a journey to financial success.
Your thriving practice is just a call away. Contact Practice Solutions and elevate your mental health practice to new heights!