2016 Physicians Practice Fee Schedule Survey: Individual Practices Get Paid Less for Common Codes

by | Last updated Jun 19, 2023 | Published on Feb 28, 2017 | Medical Billing

Practice Fee Schedule Survey
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Medical billing companies provide customized revenue cycle management solutions for independent physicians, group practices, hospitals, and other health care facilities. They ensure accurate medical billing and coding services so that their clients get paid appropriately. However, when it comes to payment, there is another angle to consider: how insurers pay for diagnostic and procedure codes. The recently published results of the 2016 Physicians Practice Fee Schedule Survey show that how much a practice gets paid for common codes depends entirely on the type of practice that it is – whether it is an independent practice or one that is part of a large system or group.

The 2016 Fee Schedule Survey covered more than 1,100 respondents in various specialties from across the country. Here are some key findings of the survey:

  • For the new patient CPT code 999201, the practice will get an average around $74 per instance of 99201 if it belongs to a large healthcare system, with multiple hospitals and practices. On the other hand, if it an independent practice, the payment will be on average, $58.40 per instance.
  • This disparity exists also for CPT code 9921, established visits, with independent practices receiving an average $43.10 per instance and employed practices receiving $58.70 per instance.
  • The survey revealed that more than 30% of the respondents were fee-for-service and not prepared for the Medicare Access and CHIP Reauthorization Act (MACRA). Only 13.1 percent of respondents say they are preparing for the switch to value-based reimbursement.

Several industry experts commented on the findings of the Physicians Practice survey. According to one expert, hospitals get higher payments than independent physicians because they have negotiated contracts with the insurance companies. Small practices, on the other hand, sign contracts at lower rates as they do not have much negotiating power and leverage. The good news is that there are certain tactics that independent practices can employ to level the playing field:

  • Get educated on using medical codes: Physicians need to code accurately for all the services they provide. In other words, they have to take care to avoid undercoding. Undercoding means that potential revenue is left on the table because the provider did not accurately code the procedure performed. Undercoding typically occurs with outpatient office visits, established patient visits, office consultations, and hospital discharge day management. In family practices, evaluation and management services are often underreported.
  • Become tech savvy: One expert says that physicians should know the codes they are utilizing the most. They should know how to use their EHR or medical billing software to run their codes so that they can use this information to negotiate better rates with payers. The data would inform payers about the quality services that the practice provides frequently, which would justify higher payment.
  • Join an independent physician association (IPA): Being part of a large group will bring the practice the benefit of strength in numbers, without having to give up its independence. It is easier for payers to contract with a group than with several independent physicians. IPAs usually enjoy reimbursement rates that are tied to quality metrics, benefiting the practice, payer and patient population. However, to benefit from this arrangement, physicians should join an IPA that represents their specialty.
  • Switch to quality-based reimbursement: MACRA and other value-based reimbursement models offer great incentives and opportunities for independent practices to earn more. By demonstrating quality, independent physicians can take advantage of new contracts that pay for performance.
  • Improve negotiating skills and pay attention to contract details: Independent physicians should learn to negotiate with insurance companies and ensure that they get the payment they deserve. They should also pay attention to the details in the contracts they sign with insurers as well as any contract changes that they may make.

Experts also recommend outsourcing medical billing to improve reimbursement. Reliable medical billing companies work as a part of the individual practice to ensure error-free coding, billing and claim submission. They are also up-to-date on all payer rules. Physicians should take care to choose a firm that will keeps them involved in the process and also provides denial follow-up. While physicians should educate themselves on the business of running a practice, having professional medical billing service support can be a significant advantage when it comes to optimizing revenue and workflow.

  • Natalie Tornese
    Natalie Tornese
    CPC: Director of Revenue Cycle Management

    Natalie joined MOS’ Revenue Cycle Management Division in October 2011. She brings twenty five years of hands on management experience to the company.

  • Meghann Drella
    Meghann Drella
    CPC: Senior Solutions Manager: Practice and RCM

    Meghann joined MOS’ Revenue Cycle Management Division in February of 2013. She is CPC certified with the American Academy of Professional Coders (AAPC).

  • Amber Darst
    Amber Darst
    Solutions Manager: Practice and RCM

    Hired for her dental expertise, Amber brings a wealth of knowledge and understanding of the dental revenue cycle management (RCM) services to MOS.

  • Loralee Kapp
    Loralee Kapp
    Solutions Manager: Practice and RCM

    Loralee joined MOS’ Revenue Cycle Management Division in October 2021. She has over five years of experience in medical coding and Health Information Management practices.