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 92507 or 92610. 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 ASHA State Advocates for Reimbursement (STAR) Network (one of the ASHA State-Based Advocacy Networks). 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.
During a 3-month period you provided:
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.
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.
Generate a report on your CPT codes and their frequency, using billing software if possible, and covering a three month period.
Determine your top payers or the three to four payers that make up the bulk of your reimbursement.
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.
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%.
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.
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.