Submitted on Wed, 2014-08-13
By Nar Ramkissoon

You need to set up a fee schedule as part of your billing program in order to collect revenue from a third party payer

how to set a fee schedule

Creating a fee schedule for the services a public health department provides is a vital first step in any billing program. Your fee schedule sets the price for the services you provide and allows you to work with private and public insurance to determine your reimbursement levels. Without the fee schedule in place, you cannot receive reimbursements from third party payers for any of your services. Creating a fee schedule for your local health department is easier than you think too. Just follow these three steps:

How to Establish a Local Health Department Fee Schedule

  • Step 1 - Determine Your Costs for Performing a Service: The first step in creating a fee schedule is to determine the costs of providing a service to your patients. From procuring supplies to paying your staff, every cost associated with a service needs to be calculated. It’s important to consider grants and other funding that can often cover some of the costs. It’s also very important to consider the fee levels that will begin to create financial hardship for your patients, and remain below it. As a local health department, you are most likely looking for the lowest amount that can be charged to cover your expenses.
  • Step 2 - Determine the Medicare Rates: Next up, you’ll want to determine what the standard fee for the provided service is in your region, a good benchmark is the Centers for Medicare and Medicaid Services. Your fees will often come in higher than the Medicare rates in order to maximize the revenue from private insurance companies that tend to reimburse at higher levels. CMS has a great online tool for determining the recommended fee schedule for your region.
  • Step 3 - Set the Fee: The final step is creating a list of all the services you provide and their specific fees. Usually, this is done by listing each CPT code once; you do not want any duplicate CPT codes with different fees. One fee for each CPT is appropriate. For an immunization for instance, you can set the fee to the patient as the cost of the vaccine plus a small amount to cover the administrative costs associated with giving out the shot, or you can place it at the Medicare recommended level. As a public health department, your fees should be set to cover the costs you incur to provide the service. The revenue you bring in just from those reimbursements can have a huge impact on your budget.

Sliding Fee Scales

After your fee schedule has been created, it’s also important to set up a sliding scale fee schedule. Depending on the poverty level determined for the family, you can provide the service at varying percentages of the original fee. This will allow you to provide some specific services to specific patients at discounted levels, while still being reimbursed at the full fee by third party payers.

Your fee schedule should be revisited regularly to ensure it reflects your current operating levels. Optimize your fee schedule today to ensure you are maximizing reimbursement levels from insurance companies, while still providing low cost services to those in need. If you need help creating or optimizing a fee schedule, contact our public health experts today to get started on your way to earning sustainable revenue.

Learn More about Building Sustainable Revenue

With funding drops always a threat, public health agencies need to develop a billing program to create the sustainable revenue necessary to maintain/expand staff and services.

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