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When operating an ambulatory surgery center, it is important to understand how your billed charges compare to the charges of other similar providers in your area. Below, we discuss five reasons it is increasingly crucial to know how your charges compare to standard benchmarks.
Research & Planning Consultants (“RPC”) has the data and experience necessary to calculate the usual, customary, and reasonable (“UCR”) charge for each line item on your chargemaster and to help you make proactive adjustments based on a comparison between your chargemaster and the UCR charges in your market.
1) Balance Billing Laws
Thirty-three states[1] have laws in effect which limit the ability of providers to “balance bill” the patient for any outstanding amount above the allowed amount paid by an insurer for out-of-network services in some or all circumstances. Part of the December 2020 coronavirus relief package established the first federal limits on balance billing, which will take effect in 2022.[2] Many state laws set UCR limits on the amount insurers must pay for out-of-network services. Your medical practice can receive more timely payments with fewer disputed by knowing how your charges compare to UCR benchmarks.
2) Independent Dispute Resolution for Out-of-Network Bills
When health plans and patients disagree with medical providers about fair payment for out-of-network medical bills, states mandate a binding independent dispute resolution (“IDR”) process. These laws often instruct independent arbiters to determine a fair payment based on UCR charges in the market, sometimes along with other metrics. Your practice needs to know how your charges compare to UCR benchmarks to know what offers to make or accept to resolve disputes.
3) Personal Injury Protection Laws
Many states either require or have optional Personal Injury Protection (“PIP”) coverage as part of automobile insurance.[3] These policies cover the insured party’s injuries regardless of who is at fault in an accident. Unlike health insurance, few providers are in-network for PIP plans. Most care is by out-of-network providers, and payment is based on the automobile insurer’s payment policies and dispute resolution processes. UCR benchmarks are frequently the basis of these policies and processes. Your practice should know how your charges compare to these benchmarks to ensure you receive maximum payment according to policy rules and you know when to pursue dispute resolution or litigation.
4) Price Transparency Laws
On October 29, 2020, the Centers for Medicare and Medicaid Services issued a final rule requiring many insurers to provide price and cost-sharing data to plan participants. This rule will force health plans to publish their negotiated rates. Some states have their own price transparency laws. Whether your practice is already subject to a state price transparency law, it will be subject to the federal law. With greater price transparency, your practice should know how your charges compare to your competitors’ and have an opportunity to make adjustments before your charges are made public.
5) Revenue Maximization
Finally, your practice should engage in regular analysis of and updates to your chargemaster to maximize your practice revenue. Health plans basing allowed amounts on UCR benchmarks will pay the lesser of billed charges or the UCR benchmark. If your charges are below the UCR benchmark, you will be paid less than the health plan was willing to pay. Not knowing how your charge for each service compares to UCR benchmarks may leave money on the table.
Contact us today to discuss our chargemaster analysis services and how we can help your practice maximize payments with minimal delays, difficulties, or litigation.
[1] https://www.commonwealthfund.org/node/27021.
[2] https://www.npr.org/sections/health-shots/2020/12/22/949047358/congress-acts-to-spare-consumers-from-costly-surprise-medical-bills.
[3] https://www.allstate.com/tr/car-insurance/personal-injury-protection-coverage.aspx.
Learn More About RPC’s Chargemaster Analysis Services
Learn More About RPC’s Ambulatory Surgery Center Services