November 24, 2009 Bottom Line

Bottom Line: Improving Health Plan Payment Rates

Speech-language pathologists and audiologists want to be reimbursed at fair rates for the services they provide. Conversely, health plans profit by containing costs and try to negotiate the lowest rate from providers. Can providers and payers reach an equitable middle ground?

I want to improve the reimbursement rates that health plans pay for my services. What can I do?

There are specific actions you can take in an attempt to improve reimbursement rates. Health care providers have flexibility when setting fees with private health plans; to put yourself in a strong position, gather as much information as possible before entering the fee negotiation process.

First, determine your pricing philosophy. Clinicians may select a market-driven approach, also known as UCR (usual, customary, and reasonable), which ties medical pricing to industry trends in local communities. A second approach, the relative value approach, ties fees to the "worth" of a procedure and considers skill, time, and risk involved in performing it. The Medicare Physician Fee Schedule uses this method, known as the resource-based relative value scale.

You also need to consider the costs you incur—including overhead costs—to provide the service. A succinct overview of how to determine the costs of services related to pricing of procedures can be found in Business Matters: A Guide for Speech-Language Pathologists (Chapter 3), available from the ASHA online store.

Second, check your rates against Medicare rates and national average rates (use data from ASHA's Negotiating Health Care Contracts and Calculating Fees: A Guide for Speech-Language Pathologists and Audiologists, also available from the online store). The Guide contains actuarial information from Milliman, Inc. The Milliman fee data cannot be shared beyond ASHA members, but members can use it as a reference for negotiating rates. Members also may receive a copy of the Milliman fee report from ASHA's State Advocate for Reimbursement (STAR) network members. For contact information on your state's STAR, visit ASHA's STAR Network.

Use this information to support an increase in fees, if appropriate. For example, Milliman's average billed charge for CPT code 92507 (speech-language treatment) is $85.40; Medicare's rate is $61.31. For CPT code 92567 (tympanometry), Milliman's average billed charge is $53.61; Medicare's rate is $17.67. Where do your fees fall on the fee scale? Keep in mind that Medicare rates are at the lower end.

Third, resist the temptation to consult with colleagues about the fees they charge. Setting prices in collusion (defined as acting together through a secret understanding) with colleagues is illegal. Anti-trust law is very complex and not always easily explained in terms of right and wrong. For example, price-fixing among competitors is easily understood, as are boycotts, in which competing health care practitioners agree to boycott plans that do not accept their fee schedule.

The concept of "signaling" is important in understanding anti-trust risks. Signaling is a boycott inferred by the Department of Justice/Federal Trade Commission (DOJ/FTC) based on surrounding individuals' refusals to deal with a business. For example, if a significant percentage of health care specialists in an area refuse to sign a contract in the same general time period, the health plan may ask the DOJ/FTC to investigate whether health care practitioners are talking among themselves or if a third party is telling the practitioners to boycott the health plan.

A Local Approach

One group of ASHA clinicians shared fee data in an effort to improve reimbursement rates in their region. The clinicians collected fee data through a formal survey (the fee data had to be historical—that is, several months old—as are Milliman data) after being advised by their attorney that each group member could use the survey fee data to negotiate individually with plans, but could not negotiate as a group with payers. Negotiating individually assures a competitive process. Although this approach was used by this particular group of clinicians, ASHA advises members considering such an approach to have it reviewed carefully by an attorney familiar with health care anti-trust regulations.

Better yet, consider the other resources available in your campaign to negotiate for reasonable fee rates. The comparison between your rates and other available fee data will indicate which specific codes to target for increased fees. Solid data and reasonable explanations for rate increases set the tone for improving reimbursement rates. 

Janet McCarty, ME, CCC-SLP, private health plans advisor, can be reached at jmccarty@asha.org. 

Steven White, PhD, CCC-A, director of health care economics and advocacy, can be reached at swhite@asha.org.  

cite as: McCarty, J.  & White, S. (2009, November 24). Bottom Line: Improving Health Plan Payment Rates. The ASHA Leader.

  

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