Converting from Timed to Untimed CPT Codes
Negotiating an Equitable Payment Rate - You Can Do It!
Here is a scenario to consider - a health plan sends you a notice
saying it will no longer accept time units for untimed CPT codes,
such as 92506 and 92507. The health plan offers a revised
reimbursement rate that is significantly lower than the previous
payment when time units were allowed.
Can you really negotiate better reimbursement
rates?
Yes, according to Gregory Mertz, MBA, president of a medical
practice management consulting firm, who writes on this topic in
Family Practice Management (11(9):31-34, 2004). His five-step
approach is used below.
You may want to contact your
ASHA State Advocate for Reimbursement (STAR) member
. There may be other speech-language pathologists who have
encountered the same issue as you have and you may want to learn
how others have dealt with the issue.
When renegotiating rates as you move from timed to untimed
sessions, educate the health plan representatives in understanding
that the new session rate should not equal "one unit" of
time (a single 15-minute unit, for example) used in the previous
payment method. Consider telling the payer representatives that
formal and informal surveys of ASHA members found that typical
sessions ranged from 45 - 60 minutes and that this information has
been used by the AMA relative value process. If you have billed in
units, consider providing your average billed unit of time for a
certain period (e.g., 3 months) to establish a "typical
session length." You can average time and/or dollar units to
give an average time or average dollar payment.
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Important
Setting prices with input from your competitors
is illegal. Avoid price fixing by refraining from
activities such as discussing charges for
speech-language pathology procedures with your
peers.
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Example
During a 3-month period you provided:
- 25 30-minute sessions = 750 minutes
- 52 45-minute sessions = 2,340 minutes
750 + 2,340 = 3,090 minutes
3,090 minutes divided by 77 sessions =
40-minute "typical session"
Providing this information will show payers the error in
reducing payment to only "one-unit" of time.
Next, follow the 5 steps below to determine the most equitable
rates. Mertz notes that solid data and a well-reasoned approach are
vital for equitable reimbursement rates. Combine this advice with
your time unit information for your negotiation tools.
An Adapted Mertz Negotiation Approach
Step 1
Generate a report on your CPT codes and their frequency, using
billing software if possible, and covering a three month period.
Step 2
Determine your top payers or the three to four payers that make up
the bulk of your reimbursement.
Step 3
Determine the Medicare relative value units (RVUs) and your
reimbursement for each code. Review the Explanation of Benefits
statements and note how much they allow for each code. Be sure to
use the "allowed" amount, not the "paid"
amount, which is the allowed amount minus any co-payments or
deductibles the patient must pay.
Also, calculate each payer's reimbursement rate as a percentage
of
Medicare's reimbursement rate
. For example, a health plan may pay 110% of Medicare's rate
for a particular code. Because more and more health plans are using
RVUs, it is important to understand how they work.
Step 4
Review your fees for each code and the fees as a percentage of
Medicare's rates. Are you satisfied with the rates? If you find
that an insurance company is reimbursing some of your charges in
full, this may mean your fees are too low and the plan may be
willing to pay more. Consider raising those fees, or standardize
all your fees at some percentage of Medicare, perhaps 110% or 125%.
Step 5
Organize the data collected into a chart or spreadsheet and
identify which codes or health plans to target for improvement.
Focus on codes with the highest volume and dollar value. If one
health plan's rates are clearly lower or if one code is paid at
a much lower percentage of Medicare than others, this is a likely
target for negotiating a new rate.
After you analyze the data and patterns, establish target
reimbursement rates for your negotiations, say 120% of Medicare, or
whatever you determine is appropriate.
Develop an Action Plan
Here are three options:
Negotiate Individual Fees
Target specific codes for increases based on your gathered data.
Your first contact in the negotiation process might be the health
plan provider relations representative. If your argument is
compelling, the discussion will move up to the contracting manager.
Medical directors generally have no role in this process, unless a
new or not well defined procedure (but one for which you have
collected efficacy evidence) can be supported by the medical
director. See the sample memo to a private health plan.
Drop the Plan
If a plan's payment levels are extremely low, you may simply no
longer accept patients. However, this strategy depends on your
local market. If you practice in a highly competitive market, those
patients will find another provider, and you will lose market
share. However, in less competitive markets, patients may complain
to their employer about lack of access to your practice and thus
pressure the health plan to negotiate an improved rate.
Do Not Accept New Patients
While you may not want to drop a health plan completely, you may
wish to stop accepting new patients. Over time, patients covered by
the plan will decrease.
Speech-language pathologists and audiologists should collect and
analyze reimbursement data and not hesitate to
negotiate with health plans for a fair reimbursement
schedule
.
Available Fee Data