Dreaded Mail: New Fee Schedules

Fee schedule reductions may be on route to you today. If you are receiving a number of Notice of Fee Schedule Adjustment letters, here are some responses to consider:

1. Make sure the carrier complies with state regulations governing the length of advance notice before fee schedule changes can be put into effect. Many carrier contract treat fee schedule changes as part of “routine maintenance” which may not require advance notification. However, lack of advance notification is questionable in states which have specific regulations regarding fee schedule disclosure, such as California, Kentucky, Maryland, Ohio and Texas.
2. Ask for details on how fee schedule adjustments are calculated. In particular, it is helpful to know the methodology underlying the payment system. If the fee schedule involves relative value system calculations, ask for the version, edition or publication date of the RVS data and any applicable conversion or geographic factors applied to the schedule. Also, ask the carrier to identify the internal processing edits, including the publisher, product, name, version and version update of the data. This will allow you to assess if the carrier is using up-to-date and nationally recognized data sources when calculating reimbursement.
3. It is also helpful to ask for the carrier’s usual, reasonable and customary payment amount on your most frequently billed codes. You have a right to know the difference between what the carrier considers the usual and reasonable payment level and the contractual payment level. The carrier may use a third party resource for usual, customary and reasonable payment calculations while basing innetwork payments on Medicare-based calculations. The usual, reasonable and customary data may be more up-to-date regarding pricing and could provide leverage when negotiating better rates with the carrier.
4. Demand prompt payment compliance and negotiate clearly worded sanctions for late payments. If payments are going down, it is critical that payments be prompt. Explain to your provider representative that lower fee schedules affect your day-to-day liquidity and, therefore, your office must have the contractual assurance that late payments will include interest payments or some other sanction, such as payment of full billed charges.
5. Deal with uncooperative carriers by putting everything in writing. Make your request for fee schedule adjustment calculations and usual, customary and reasonable pricing information in writing. Put you request to negotiate contractual terms in writing as well. If you are end up seeking outside contract negotiation consulting or legal assistance, your clearly documented requests may be helpful in reaching a speedy resolution. If the carrier fails to respond to the written request, ask your attorney what grounds you have for pursing action against the carrier for failure to disclose payment methodology.