How to create a Medicare reference fee schedule (part 4)

Medicare provides public reference fee schedules for medical services, laboratory and radiology services, DME, and drugs and injectibles.  Making your own Medicare fee schedule provides a ready reference for your practice payments.

Medicare fee schedule part 4: Drugs/vaccines fee schedule

Go to https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/index.html.
Select the most recent year from the left hand column.
Then select the most recent month's ASP Pricing File and download it.
In the zip file, choose the ASP Pricing File (eg Oct 18 ASP Pricing File) Excel file.
In the Excel file, the relevant columns are A, B, and D.
Unmerge the cells in this file. Type Ctrl-A to select all the cells, then choose Home > Alignment > Merge and Center > Unmerge Cells. Then move the columns so that the HCPCS Code is in column A, the HCPCS Description is in column C, and the Payment Limit column is in column F.
These cells can be selected, copied, and pasted to the bottom of the Physician Fee Schedule (PFS) file.

 

How to create a Medicare reference fee schedule (part 3)

Medicare provides public reference fee schedules for medical services, laboratory and radiology services, DME, and drugs and injectibles.  Making your own Medicare fee schedule provides a ready reference for your practice payments.

Medicare fee schedule part 3: Durable Medical Equipment fee schedule

Go to https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/DMEPOSFeeSched/DMEPOS-Fee-Schedule.html.
Select a time period. The latest data will have the most recent year and highest letter. In this particular case, since DME18-D (orange arrow) links to no updates, we will select DME18-C (green arrow) in this case.
Download the file (e.g. DME18-C.zip).
In the zip file, open the DMEPOS file (e.g. DMEPOS_JUL.xls)
The relevant columns in this file are the HCPCS code column (column A), the HCPCS code description column (column DJ), and the appropriate state column for your state.
Each state has two columns, nonrural (NR) and rural (R). To determine if you're in a rural or nonrural location, look in the DMERuralZip file (e.g. DMERuralZip_Q32018). If your zip code is listed, then use the rural (R) payments as a guide.
Delete all state columns that are irrelevant for your location.
If you are in a rural area, combine the nonrural and rural fee schedules into a single column. If the rural column shows 0.00 (green arrow), the rural payment for that HCPCS is the same as the nonrural payment. If the rural column shows a nonzero value (orange arrow), the higher rural column payment applies to rural areas.
To simply combine the rural/nonrural fees in this way, you can create a formula to take the maximum of the two columns into a third column.
To propagate the formula down to the bottom of the sheet, select the cell with the formula, Ctrl-C to copy it, click on an empty cell, drag down to the bottom, then type Ctrl-V.
To save the values so you can delete the two source columns, select the resulting column (here column J),
Now you can delete the two source columns.
Copy and paste the columns so that the HCPCS code is in column A, the HCPCS description is in column C, and the payment column is in column F.
Select the three resulting DME columns and copy them.
Paste the data to the bottom of the PFS data.

 

How to create a Medicare reference fee schedule (part 2)

Medicare provides public reference fee schedules for medical services, laboratory and radiology services, DME, and drugs and injectibles.  Making your own Medicare fee schedule provides a ready reference for your practice payments.

Medicare fee schedule part 2: Clinical laboratory fee schedule

Go to https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ClinicalLabFeeSched/Clinical-Laboratory-Fee-Schedule-Files.html.
Select a time period. The latest data will have the most recent year and most recent quarter. For example, Q3 (third quarter) is the most recent here of the 2018 files.
Click to download the file (e.g. 18CLABQ3.)
In the zip file, open the Excel file (e.g. CLFS 2018Q3.)
The file can be used as-is for lab reference pricing, or you can combine it with the Medicare Physician Fee Schedule file into a single reference file. Column B is the HCPCS/CPT code, column G is the description of the HCPCS/CPT code, and column F is the payment rate.
To combine it with the PFS file, rearrange the columns so that the HCPCS column is in column A, the description is in column C, and the payment is in column F. To copy/paste an entire column at once, click on the letter column header, Ctrl-C, click on the target column header letter, then Ctrl-V.
Once the columns are reorganized, copy and paste the result at the bottom of the PFS file.

 

Pediatric Productivity Estimator

What revenue can ambulatory-based pediatricians expect to generate from fee-for-service productivity?

This spreadsheet can give you a back-of-the-envelope estimation based on hours worked, types of patients seen, payment rates, practice collection rate, and other variables.   For a manipulable Excel versiony download the Physician-Productivity-Worksheet.

Outpatient tab

1st row: Scheduling parameters

  • How many patient slots will you have in an a workday?   In other words, how many possible different appointment slots will you offer during the day (whether or not they’re all filled) ?  One way to think about it this would be a theoretical “maximum safe patients seen.”
  • What percent of these slots will be filled per day?   Obviously, if you want to see an average of 20 patients per day, it’s impossible to achieve this with 20 appointment slots, i.e. your maximum number of appointments per day.  Ambulatory pediatrics is seasonal; while you may have total appointment saturation during the winter months, May and June might be comparatively slow.   The product of “how many patient slots will you have” and “what percent of these slots will be filled” should give you a reasonable number for “average patients seen per day.”
  • How many workdays per week will you see patients?   Enter a fraction for any partial days (i.e. afternoon off, Saturday clinic, early morning or evening hours).
  • How many weeks a year will you work?   Start with 52 and work backwards.  Account for any vacation time, sick time, CME or advocacy time, maternity leave, etc.  In addition, it’s wise to subtract 1-2 weeks per year for holidays, snow or bad weather days, or other scheduled clinic closures.
  • The calculation in this row, “Total encounters per year,” should be a fairly accurate representation of your total annual patient volume.

2nd row: Sick visit payment

  • Average 99213:  Enter the average non-Medicaid payment you expect for CPT 99213.   This should be a weighted average of higher- and lower-paying health plans.  If you have no idea where to start, seeing what Medicare pays in your region could be a rough benchmark.
  • Average 99214: like “Average 99213.”
  • % 99214+ visits (of sick):  Of all sick visits you do, what percent are coded either as a 99214 or a 99215?   Don’t forget that any non-well visit should be considered a ‘sick visit’ in this paradigm, and any lengthy mental health visits (ADHD, autism, depression) should be represented here.
  • Average ancillary revenue per sick visit:  This is the average additional payment you expect for sick visits in additional to any E&M payment.  This would include any revenue from labs, injections, spirometry, screening questionnaires, procedures, or other services provided as part of a sick visit.  Some visits have potentially high-paying codes, such as splinting and casting procedures, but the relative frequency of these visits is relatively small.
  • The calculation in this row, “Average commercial payment per sick visit,” should represent the typical payment you expect from non-well, non-Medicaid visits.

3rd row: Well visit payment

  • % well visits (of all):  Of all patient encounters you perform, what percent are well visits?  Well visits are reliably more remunerative than sick visits, for virtually all payers (including Medicaid).  Better-run practices with aggressive well visit recall may approach 50%; practices who do not recall patients for well visits may be as low as 20%.
  • Average well visit revenue (without immunizations):  Well visit revenue should include payment for the age-defined well visit E&M code, as well as additional revenue for age-appropriate vision, hearing, lab screening, developmental and behavioral instruments.  Omit immunization administration (9046x, 9047x) and immunization products (906xx, 907xx) from this value.  Not every well visit will have every type of service performed; use the Bright Futures periodicity schedule to determine the relative frequency of each type of service.
  • The first calculation in this row, “Average revenue/commercial visit (no imms)”  gives the predicted revenue per visit for non-Medicaid visits, exclusive of any immunization revenue.
  • The second calculation in this row, “Predicted panel size,” takes the number of well visits per year and computes (based on a weighted average of 1.35 well visits/patient/year across the 0-21 age spectrum based on Bright Futures recommended well visit frequencies) a panel size.

4th row: Medicaid adjustment factors

  • % Medicaid payment:  What percent of your commercial fee schedule will Medicaid pay?   Medicaid payments in state fee-for-service programs range from 33% to 127% of Medicare for primary care services, with the national average being 66%.  Medicaid MCO payments are similar to this range in some regions, and somewhat higher than fee-for-service payments in other regions.
  • % Medicaid (of encounters):  This may not be identical to the percent of Medicaid patients in your practice, since children with Medicaid tend to have more health problems and are thus higher utilizers of health care.  However, knowing the percent of children with Medicaid in your community can give a rough estimate.
  • The first calculation in this row, “Total nonvaccine revenue,” computes the sum of the revenue of your commercial line of business plus the revenue of your Medicaid line of business, using the % Medicaid payment and % Medicaid encounters figures to compute the latter.
  • The second calculation in this row, “Average revenue per visit (nonvaccine)” is simply the first calculation in the row divided by the number of encounters.

5th row: Immunization revenue

  • Immunizations per year:  How many immunizations (including flu vaccines) will your practice administer per year?  Pediatric patients who complete the ACIP-recommended vaccine schedule receive about 2.5 vaccines per year on average between 0 and 21, with all ages receiving at least one vaccine per year (a flu vaccine), and ages 0-1, 5, and 11 receiving more.   However, even if your practice requires patients to be vaccinated, some of your patients’ vaccinations will be given outside your office — at the health department, pharmacy, school, etc.   You can use the ACIP recommended schedule along with your anticipated panel size to estimate.
  • Non-Medicaid immunization admin revenue (per immunization):  How much administration revenue per non-VFC immunization do you receive?   This would be represented by a weighted average of your payments for 90460 + 90461, 90471, 90472, etc.
  • Average immunization purchase cost per product (non-VFC):  Using the CDC’s Private Sector Dose pricing guide as a reference, a practice using non-combination vaccines might give 54 doses of vaccine between ages 0 and 21, with an average price of $54 (ranging from a dose of $17 flu vaccine to a $194 Gardasil).  A practice using combination products would have a higher average price.  A practice with high influenza coverage rates would have a lower average price.
  • Average markup revenue per imm dose (non-VFC):  The AAP Business Case for Vaccines recommends that payments be at least 125% of the CDC private sector price, i.e. 25% markup revenue for this field.
  • The calculation in this row, “Total immunization revenue per year,” is the sum of both Medicaid (VFC) and commercial lines of business.   Medicaid vaccine revenue assumes all Medicaid vaccines given are VFC, and the revenue is the product of the number of vaccines given (row 5, factor 1) times the practice’s Medicaid percentage (row 4, factor 2) times the practice’s non-Medicaid immunization admin revenue per immunization (row 5, factor 2) times the % Medicaid payment adjustment factor (row 4, factor 1).  Non-Medicaid vaccine revenue includes the product of the number of non-Medicaid vaccines given times the non-Medicaid immunization admin revenue factor.  It also includes the number of non-Medicaid vaccines given times the average immunization purchase cost per product (row 5, factor 3) increased by the average markup revenue per imm dose (row 5, factor 4).

6th row: Revenue Summary

  • The first calculation in this row, “Total revenue per year,” is the sum of “Total nonvaccine revenue” and “Total immunization revenue per year.”
  • The second calculation in this row, “Average revenue per visit (with vaccines)” is “Total revenue per year” divided by the “Total encounters per year” (row 1, factor 5).

7th row: Salary Summary

  • Practice overhead:  This represents all expenses not ascribed to the physician that are required to run the practice:  staff salary and benefits, rent, utilities, vaccines and medical supplies, equipment, furniture, computers, and so on.   Pediatric practices usually range between 50-75% overhead.  A larger number is not necessarily bad if it means more net revenue is generated.
  • Collections:  Practices rarely collect all revenue that is legitimately due them.  This figure, commonly called “net collections,” represents the amount of generated revenue that was allowable and collected.  Because the rest of the practice overhead must be paid first, collection discounts are applied to entirely to the physician salary, not overhead.  That is, a drop in collections rate of 3% may drop the physician’s salary by 10% or more.
  • Benefits: This includes all non-salary costs associated with the physician that have not already been accounted in the overhead figure.  Typically this includes physician employment taxes, medical malpractice insurance, health insurance, other supplemental insurances (such as dental and vision), an HSA or other spending account, practice contributions to the physician’s retirement fund, a CME allowance, or other personal benefits.
  • The first calculation in this row, “Available for salary,” represents the amount of revenue generated by a physician that remains after overhead has been paid, collections have been adjusted, and benefits have been paid.
  • The second calculation in this row, “Salary/hour,” represents the “Available for salary” figure divided by the total number of hours worked.  The total number of hours worked assumes 8 hour days times the number of days worked per week (row 1, factor 3) times the number of weeks worked per year (row 1, factor 4).

Finding fee schedules and real-time claims estimators for payers

Fee Schedules

Medicare fee schedule: how to create your own

State-run Medicaid fee schedules:  Alabama  – AlaskaArizona – ArkansasCaliforniaColoradoConnecticut – DelawareDCFloridaGeorgiaHawaii – IdahoIllinoisIndianaIowaKansasKentuckyLouisianaMaine – Maryland Massachusetts – MichiganMinnesotaMississippiMissouriMontanaNebraskaNevadaNew Hampshire – New Jersey – New MexicoNew YorkNorth CarolinaNorth DakotaOhioOklahoma OregonPennsylvania – Rhode IslandSouth CarolinaSouth DakotaTexasUtahVermontVirginiaWashingtonWest VirginiaWisconsinWyoming

Tennessee has no state-run Medicaid plan.

Also compare KFF’s Medicaid-to-Medicare fee index by state

Real Time Claims Estimators

Real-time claims estimators: Cigna

  • CignaForHCP > Patients
  • Enter patient information.
  • Click Estimate Costs.

Real-time claims estimators: Aetna, Cigna, Humana, local BCBS  plans (BCBS AR, FL, IL, KS, MS, NM, OK, SC, TN, TX and Highmark):

  • Availity > Patient Registration > Eligibility & Benefits Inquiry
  • Select payer from the dropdown.
  • Enter patient information.
  • Click Patient Care Estimator.

Real-time claims estimators: United plans:

  • UHCProvider > Link > United Healthcare Claim Estimator
  • Click Pre-Determination of Benefits > Agree
  • Confirm provider information > Continue
  • Enter patient information.

 

 

 

How to create a Medicare reference fee schedule (part 1)

Medicare provides public reference fee schedules for medical services, laboratory and radiology services, DME, and drugs and injectibles.  Making your own Medicare fee schedule provides a ready reference for your practice payments.

Medicare fee schedule part 1: Physician fee schedule (outpatient and inpatient professional services)

1. Go to https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Relative-Value-Files.html.
2. Select a time period.  The latest data will have the most recent year and highest letter: for example, the first fee schedule for any calendar year is "A," with subsequent fee schedules for the same year being marked "B," "C," and so on.
3. Click to download the file (e.g. RVU18D.zip)
4. In the zip file, there are several Excel files. First open the LOCCO Excel file (e.g. 18LOCCO.xls.)
5. Find the carrier code and location code that correspond to your state and city/county region. In this example, let's look for Knoxville, Tennessee. Tennessee has a single carrier/location code pair: 10312 and 35.
6. Next, open the GPCI Excel file (e.g. GPCI2018.xls) in the zip file.
7. In the GPCI file, find your carrier and location code. Then make a note of the three Geographic Practice Cost Indicators for your location: physician work (PW GPCI), practice expense (PE GPCI), and malpractice (MP GPCI). In our example, the indicators for Tennessee’s sole locality are 1.000, 0.901, and 0.526, respectively.
You may close the GPCI file.
8. Now, open the RVU file (e.g. PPRRVU18_OCT.xls.) I recommend that you make a Save As copy, e.g. “My Medicare Fee Schedule 2018 – D.xlsx.”
9. Add two new columns to the file. Hover over the Column F column header, right-click, and choose Insert. A new column will appear. Repeat for a second new column.
10. Label your two new columns Payment (nonfacility) and Payment (facility).
11. Optional: Hide rows that will not be valued on by this fee schedule.   There are over 16,000 rows on this spreadsheet, many of which are zero-valued on this particular spreadsheet (indicating they are priced elsewhere.)   The more useful data may get lost, so you can temporarily filter out the rows you don't think you need. For example, you can hide everything that has a practice expense factor of zero.   To do this, first type Ctrl-A to select all rows.  Then in the Data tab, under Sort & Filter, click Filter.  Click the filtering arrow under the Column I header.  In the dropdown, remove the check box next to 0.00, then click OK.  You can always remove this filter later if you want to see everything again.
12. Now, create the non-facility formula.  First find the row index for the first row of data.  In this example, the first medical service listed is G0101, located in row 1366.
13. In that row, find the Excel coordinates of four cells: the first row's Work RVU, the first row's Non-Facility PE RVU, the first row's Malpractice (MP) RVU, and the first row's Conversion (Conv) Factor.    In this example, these are found in cells H1366, I1366, M1366, and AA1366, respectively.


14. In the first Payment (nonfacility) cell (here, F1366), enter a formula based on the following construction:

=ROUND(((row's Work RVU cell * PW GPCI)+(row's Non Facility PE RVU cell * PE GPCI)+( row's Malpractice RVU cell * MP GPCI)) * row's Conversion Factor),2)

Or in this example:

=ROUND(((H1366*1)+(I1366*0.901)+(M1366*0.526))*AA1366,2)
15. Press Enter, and a value should appear in F1366.
16. Now you can copy/paste this formula down all of column F.   Click in cell F1366.  Then type Ctrl-C to copy the formula in F1366.   Then click and drag to the bottom of the column, and type Ctrl-V.  You should now see the formula's result in every row.
17. Create the Payment (facility) formula in a similar manner. In the first Payment (facility) cell (here, G1366), enter a formula based on the following construction:

=ROUND(((row's Work RVU cell * PW GPCI)+(row's Facility PE RVU cell * PE GPCI)+( row's Malpractice RVU cell * MP GPCI)) * row's Conversion Factor),2)

Or in this example:

=ROUND(((H1366*1)+(K1366*0.901)+(M1366*0.526))*AA1366,2)
18. Copy/paste the formula down through column G.
19. Be sure to save your work!