Fee schedules play a pivotal role in determining how much healthcare organizations are paid for the services they provide. But what is “fee schedule” in medical billing? Understanding the fee schedule definition represents a critical step in managing your organization's financial well-being and stability.
Do you have questions like, “What is a fee schedule?” and “What is a chargemaster?” If so, this is the post for you. Learn all you need to know about insurance fee schedules in this guide.
A fee schedule is a full list of the prices your healthcare organization can charge for its services. It outlines how much you’ll be reimbursed by insurance companies, Medicare, or Medicaid. These schedules outline the maximum amount a payer will reimburse for each procedure or service rendered, creating a reference point for billing and payments.
Each payer has its own set of rates and reimbursement policies, which will be outlined in your contract with the insurance company. Your organization may receive different compensation depending on the patient’s insurance provider or coverage plan.
The question of “What is a fee schedule?” cannot be fully answered without also discussing chargemasters. A chargemaster medical billing document is an internal list of billable services, procedures, and items that your facility provides. Each item on the list includes a specific code and an associated price.
The fee schedule is a list of negotiated rates that payers will actually reimburse for those services. It’s not uncommon for there to be discrepancies between your chargemaster and the contracted fee schedule. However, it’s important to avoid any major differences in prices, especially in light of recent billing transparency legislation.
So what is a fee schedule, exactly? It’s a list of prices healthcare organizations offer for services rendered. Now that this has been established, it’s time to take a closer look at three major challenges your organization will need to navigate regarding these documents.
Fee schedules are tedious to interpret. They are filled with codes, procedures, and reimbursement rates. Your billing team must be familiar with this information, as well as medical coding best practices and payer-specific requirements.
For instance, one payer may require additional information when processing claims for specific procedures. Failing to provide that information may result in an automatic denial.
If your team is not well-versed in fee schedule documents, it can be overwhelming to ensure that you are billing correctly and receiving timely reimbursements. You should explore automation opportunities wherever possible to save time and reduce the likelihood of errors or confusion.
Another major challenge involves determining whether your organization is getting paid correctly based on the fee schedule and current contract terms. Discrepancies in reimbursement can occur due to coding errors or payer-specific policies.
It’s important that your team knows precisely how to interpret fee schedules and identify underpayments. Uncertainty or ignorance can lead to lost revenue and missed opportunities for financial optimization.
Fee schedules can vary widely depending on the region, provider type, or payer contracts. This makes it challenging to know whether your repayment rates are competitive or in line with similar providers.
Without benchmarking your fee schedules against others in your market, you might find it hard to gauge whether your payers are engaging in good faith. It’s imperative that you be able to identify if they are providing favorable terms or undercompensating you.
Learning how to define fee schedules is a great first step. Now, it’s time to move beyond the question of “What is a fee schedule?” and shift attention to mastering fee schedule management. By doing so, your organization can unlock benefits such as:
One of the biggest advantages of efficient fee schedule management is the potential to increase revenue through better contract negotiation with payers. If you have a clear understanding of your fee schedules and how they stack up against chargemaster documents, you’re in a better position to obtain more favorable terms.
Accurate fee schedule management reduces the risk of errors and the denials that will follow. You can decrease the odds of underpayments, delays, or outright denials, thereby recapturing lost revenue and improving overall financial health.
Your team will also be able to streamline the billing process. This can promote more timely payments from payers and patients.
You can’t make informed financial decisions for your organization without understanding current fee schedules. Fee schedule management promotes transparency and allows you to create more accurate financial forecasts. This transparency helps your organization plan for future growth and manage resources more efficiently.
Here are three simple ways to make fee schedule management much easier:
You should consolidate all fee schedules into a centralized, accessible location. Software systems designed for revenue cycle management represent the best solution. This step helps you prevent confusion and ensure that everyone on your team is working with the most accurate and up-to-date information. You can dig deeper into this in our free Ebook, A Streamlined Process For Getting Your Contracts And Fee Schedules.
Fee schedules are not static documents — they change over time. Every time you enter into a new contract, it’s important to update your fee schedule with that payer. Be mindful of insurance provider policy changes as well, as those can alter repayment terms and make it more difficult to obtain reimbursement for certain procedures.
Managing fee schedules manually can be a time-consuming and error-prone process. Payer contract management software simplifies the process and delivers real-time benchmarking data.
It can automatically detect underpayments and allow you to recover lost cash with unmatched efficiency. Adding tools like Rivet’s Payer Performance to your arsenal is one of the most pragmatic ways of enhancing fee schedule management while promoting long-term financial health.
Rivet Health can provide clarity into your fee schedules, chargemaster documents, and reimbursement rates. Our suite of technology solutions puts you back in control of the revenue cycle and provides the insights necessary to recapture lost cash flow. Schedule a demo today to learn more.