- OVERNIGHT HEALTH: GOP eyes healthcare law for offsets
Republicans in both chambers want to tap President Obama’s healthcare law to help pay for their student loan extensions. Obama has spent the week on college campuses, browbeating Republicans to prevent the interest rates on student loans from doubling. But that push has resulted in two proposals that would affect his signature healthcare law.
House Speaker John Boehner (R-Ohio) announced late Wednesday that the House will vote Friday on a student loan bill, and he plans to offset the measure by cutting the healthcare law’s prevention and public health fund. Repealing the fund is worth about $12 billion as an offset, according to a Congressional Budget Office score of separate legislation.
Sen. Lamar Alexander (R-Tenn.) also wants to offset lower loan rates by using the healthcare law. He’s returning to a well that Congress has already tapped twice — the subsidies people will get to help buy insurance. His loan bill would require people to pay back a greater share of any excess subsidies.
- Democrats oppose health cuts in Boehner’s student loan bill
Democrats quickly panned House Speaker John Boehner’s proposal to pay for a student loan bill by cutting into President Obama’s healthcare law.
Boehner (R-Ohio) said the House will vote Friday on a proposal that would block a major increase in student loan interest rates, which he plans to offset by cutting the healthcare law’s prevention fund.
Obama has backed cuts to the prevention fund in the past — he agreed to strip one-third of its funding in a budget agreement last year. But the administration said healthcare is the wrong way to pay for the student loan extension.
“This is no time to refight old political battles. We should be able to work together to find offsets that don’t penalize middle class families or undermine efforts to help more Americans stay healthy,” White House spokesman Nick Papas said. “We look forward to working with Congress and we are confident we will reach an agreement that ensures we don’t double student loan interest rates.”
Senate Majority Leader Harry Reid (D-Nev.) was also critical.
“Democrats are opposed to shortchanging an important program that supports crucial efforts to prevent disease and protect against public health emergencies just so Republicans can continue protecting millionaire tax dodgers,” Reid said in a statement.
- Dem student loan bill uses $6B that would otherwise go to Medicare
Senate Democrats’ student loan proposal would spend roughly $6 billion that would otherwise go into the Medicare trust fund.
Senate Majority Leader Harry Reid’s (D-Nev.) proposal would prevent a major spike in the interest rate for student loans. To offset the cost of keeping interest rates low, it would close what Reid says is a loophole that allows so-called “S Corporations” to avoid paying Medicare taxes.
Reid’s bill would close that loophole, requiring more people to pay Medicare taxes — money that normally flows into the Medicare trust fund. But the new revenues under Reid’s bill wouldn’t go into the Medicare trust fund. They’d be diverted to pay for the loan extension.
A Democratic aide said the loan extension would take $6 billion over 10 years that would otherwise go toward Medicare. The bill would not take away any current Medicare funding.
- Why Do Doctor Bills Vary Widely?
The Primary Goal of Healthcare Reform is Cost Containment
Guest Post by Holly DeMuro, CPC
Healthcare costs in the United States have skyrocketed in recent decades. Recently, the Huffington Post ran an article discussing major disparities in the cost of simple procedures like an appendectomy. These dramatic differences in costs have many people scratching their heads asking how it is possible that fees can vary so dramatically for the same procedure. While the Huffington Post article was referring to hospital charges, the same question applies to doctor bills, or physician fees as well.
Disparities in the cost of healthcare services between physicians in the same specialty and same geographic region can have a major impact on a physician’s practice. This means that physician’s practices must be cautious when setting their fee schedules, particularly in light of the fact that patients are becoming more and savvier about healthcare options.
I am certainly not implying that a physician should undercharge for services, but rather providers must focus creating a methodical fee schedule. In other words, providers must create a fee schedule that can be justified to patients while returning maximum reimbursement.
First, let’s start by understanding what the term fee schedule means. There are actually two related meanings. For the physician, a fee schedule is the list of charges or fees that the doctor wants to be paid for services. Think of this as a price tag for every different service in a doctor’s office. For the insurance company, the fee schedule is a list of the amounts the insurance will allow in payment for the doctor’s services.In order to exceed other insurance’s fee schedules and avoid underpayments, a good rule of thumb is to multiply Medicare’s fee schedule by 1.5 to 2 times for each CPT code.
Insurance companies create their fee schedules according to a calculation called a “reasonable and customary” fee. This is fancy jargon for a calculation according to the prevailing average cost of each service within a geographic region. Unfortunately, each insurance company has their own calculation and therefore insurance fee schedules can vary dramatically. Worse still is the fact that most insurance companies do not disclose their method of calculation.
These facts make it very difficult, if not impossible for providers to abide the so called “reasonable and customary”. In the end, physicians have no choice but to charge rates high enough to exceed the maximum possible payment and take a contract adjustment in hopes of maximizing revenue. Unfortunately, patients do not understand the concept of contracted rates or contract adjustments. Not only high fees negatively impact the physician’s reputation, it can also make it more difficult for the physician’s staff or billing service to collect patient balances. Furthermore, high fees can be a terrible burden for patients without insurance.
So how does one set a reasonable and customary fee schedule?
Glad you asked…
Let’s start with this most important thing to know. Although the doctor and the insurance have a contract saying that a certain rate will be paid, the insurance will never pay anymore than the physician charge. That means if you send a charge to the insurance for an amount lower than they would normally allow, the insurance will pay you the lower rate. This is why you must set your fee schedule high enough to accommodate the highest paying insurance company.
The next thing to consider is simplicity. Physicians generally treat a lot of different patients with all different insurances. Technically, the insurances are required to give you a copy of their fee schedule upon request and it is a good idea to obtain that fee schedule to check that the insurance is paying correctly. But considering that the practice will have a lot of diversity in insurance mix, insurance fee schedules change, and various factors like modifiers and place of service affect reimbursement – it is difficult to maintain a separate fee schedule for every insurance company. The simplest way to calculate a fair fee schedule is to start with Medicare.
Medicare’s fee schedules are determined by the U.S. Government. Their fee schedule (or amount that they will allow fee for service providers for rendering services) calculates the amount of work involved in a particular procedure times a conversion factor that accounts for the cost of being a doctor in a particular geographic region (similar to a regional cost of living). The conversion factor is publically available in the Federal Register.
Now, Medicare is by no means the highest fee schedule, so you should not use it for commercial insurance billing without some modification. Still, with a little tweaking Medicare’s fee schedule is a great place to start. The Medicare fee schedule is available on all local Medicare websites and is generally updated every year with new calculations.
It is important to use your local Medicare fee schedule because the conversion factor (the multiplier) used to calculate the payments vary by geographic location and the goal here is to maximize revenue. For example, since it is more expensive to work in New York City, the doctors receive a higher payment rate that a small Midwestern town with a lower cost of living. So if you use the wrong geographic location’s fee schedule, you may lose out on valuable revenue.
In order to exceed other insurance’s fee schedules and avoid underpayments, a good rule of thumb is to multiply Medicare’s fee schedule by 1.5 to 2 times for each CPT code. For example, if Medicare allows $100 for procedure code 99215 your fee schedule would be $100 x 2 = $200. Two times Medicare is usually just about right, it is not too high but it is high enough to exceed other insurance’s higher-than-Medicare fee schedules so you do not run the risk of receiving underpayments.
Using the Medicare fee schedule as a starting point in establishing a practice fee schedule makes a complex task easy. It also helps you to simplify annual fee schedule maintenance. Further, as Medicare’s rates are publicly available, you have a clear and concise way to explain your costs to patients while charging commercial insurances an appropriate rate that will maximize revenue.
This is a guest post by Holly DeMuro, CPC. Holly has 15 years experience consulting in business management, medical billing and coding, and healthcare information technology. She is certified as a Professional Coder by the AAPC. To learn more visit her blog at healthcareisbusiness.blogspot.com or check out her profile on Linkedin.Related Posts:
- Doctors Should Run Their Practices Like a Business
- Health Insurance Companies Process 1 in 5 Claims Wrong
- Medical Billing Company Combats Health Insurance Companies That Pay 1 of 5 Claims Wrong
- Medical Billing Company Expands Their Pediatric Medical Billing Division
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