Under Medicare rules, physicians will be paid the lower of the Medicare fee schedule, or the billed amount. In its recent notice implementing the new fee schedule as of July 1,
Here’s the real problem. Never, ever submit a claim at a discounted rate. You can put in a contractual allowance discount, but the claim should always start with your full fee schedule. There are two reasons for doing this: (1) you are signaling to the patient/insurer/payer that there is a discount and (2) you can track your contractual allowances. For business management and planning purposes, this is simply a good management practice.
If you adjust your billing for each payer, consult with your accountant before making the change. This could have an unanticipated impact, and changes like this I don’t like making without a chat with my key financial advisor. This will also change your financial statements, as you will now be reporting much higher gross revenue, but substantial contractual allowances that reduces your cash revenue. Make sure that you continue to be focused on the right number in making comparisons.
Some disagree with billing at full (private) fee as an exercise in self-deception. But it’s not – it reflects what your services are worth, and what some patients are undoubtedly paying. Financial statements always have to be in context, which is why any footnotes are very important.
In the coming weeks, monitor your Medicare claim activity closely to make sure that you are fully compensated at the correct rates. On a routine basis, payments should be monitored to insure that you are being paid correctly.