#187 How to Set Your Fee Schedule and When to Raise It

Show Notes 

Your fee schedule is a revenue ceiling. And for most independent practices doing over $3 million a year, that ceiling is set too low in ways that never generate a denial and never appear on a standard report. 

EP186 covers the five gaps that are quietly capping your revenue, the exact fix for each one, and three actions to run this week. 

Gap 1 — Billing Below Your Own Allowables: 

You negotiate a better payer contract. The billing system does not get updated. The payer pays what you billed, not what you are owed. A practice with 20 high-volume CPT codes averaging a $10 billing gap across 800 monthly claims is losing $8,000 a month, $96,000 a year, from a contract they already won. 

Gap 2 — Inconsistent Fee Schedules Across Locations: 

A secondary location runs on its legacy fee schedule from before acquisition. Location A bills $210 for a procedure. Location B bills $165 for the same code. A site doing 400 visits a month with a $35 average billing gap is under-billing $14,000 a month, $168,000 a year. 

Gap 3 — No Medicare Multiplier Anchor: 

Fees set by instinct drift downward every year while costs move in the opposite direction. The fix: anchor to 200–300% of the current Medicare allowable and recalculate every November when CMS publishes updated rates. 

Gap 4 — Suppressing Global Fees for Self-Pay Patients: 

A practice protecting 15% self-pay volume by keeping fees low inadvertently discounts 100% of encounters. 850 commercial patients billed $40 below the correct rate: $34,000 a month, $408,000 a year. The fix: raise the global fee schedule and implement a separate documented sliding fee scale for uninsured patients. 

Gap 5 — No Annual Fee Schedule Review: 

A fee schedule that is right in year one becomes the revenue leak of year five. A $4 million practice drifting 3% below where it should be loses $120,000 a year in collectible revenue. Over five years: $600,000. 

The Five Fee Schedule Gaps at a Glance: 

• Billing below allowable → Payer pays billed charge, no alert → up to $8K/month 
• Location fee inconsistency → Lower site appears compliant on reports → $3K–$15K/month 
• No Medicare multiplier anchor → Fees drift, no logical update trigger → Compounds annually 
• Artificially low global fee → Self-pay policy masks commercial discount loss → $5K–$20K/month 
• No annual review → Costs rise, billed charges flat → 3–5% margin erosion per year 

Three actions this week: 

• Run the top-20 CPT code comparison — billed charge vs. highest commercial contract allowable 
• Anchor your fee schedule to the Medicare multiplier — recalculate for this year 
• Put the annual fee schedule review on the Q4 calendar today — first week of November, billing manager named as owner 

Episode breakdown: 

00:00 The fee schedule is a revenue ceiling 

02:30 Why silence in billing costs more than denials 

05:00 Gap 1: Billing below your own allowables 

09:00 Gap 2: Inconsistent fee schedules across locations 

13:00 Gap 3: No Medicare multiplier anchor 

17:00 Gap 4: Suppressing global fees for self-pay patients 

21:30 Gap 5: No annual fee schedule review 

25:00 Three actions this week 

29:00 Free resource + EP187 tease 

Resources Mentioned 

NEW LEAD MAGNET  Primary resource this episode: 30-Day Revenue Recovery Plan. Payment Posting Audit Checklist is tertiary. 

30-Day Revenue Recovery Plan (free): 

eligibility.natrevmd.com/nrc/-30day-revenue-recovery-plan 

Book a free 30-minute call: 

calendly.com/heather-natrevmd 

Practice Revenue Leak Scorecard (free): 

eligibility.natrevmd.com/nrm-revenue-scorecard-v3 

Payment Posting Audit Checklist (tertiary): 

eligibility.natrevmd.com/payment-posting-checklist 

CMS Medicare Physician Fee Schedule: cms.gov (updated annually each November) 

Transcript

SPEAKER_00 0:01

All right. Welcome back to the podcast this week. Excited to have a guest with us to talk all about how practices can have help within their practice. I think that having and hiring the right team members has been one of the hardest struggles that we have even experienced just with you know managing what we need. Is it the right person for the role and so forth? So excited to talk to you. So, Tim, do you go by Tim? Do you go by Timothy? What what's what's your name of choice? All right. Yeah, okay. So tell me how you went from pro hockey to uh the business and tell me a little bit about just your journey. Um, well, that's good. I mean, you've kind of been in our space with the revenue side. Um, I'm a physician, as you know by background, and I think I've seen my own friends um who've struggled with really understanding, you know, how they can really have their practice be successful, whether that's the revenue side or the support side, which was what we're talking about today. Um, it's not easy. I mean, we're not taught this in medical school. You spend, you know, 10 plus years uh getting your medical education, you don't have a lot of the business education, and it's kind of trial by error, I guess. Um I mean, you're just trying to figure it out. So um, you know, we see a lot of our practices to use virtual assistants, especially for that front-end piece of the revenue. So for us, you know, we're RCM firm, but we don't do, we don't typically do the front-end piece. We're not typically doing eligibility or prior offs. Um, because I do I do believe, and maybe you have an opinion on this, like the people who are answering the phone to schedule the appointments, I believe that those are really helpful to have those same people connected with the eligibility team. Do your virtual assistants connect those dots, or do you see it maybe both ways where they're not scheduling the patients and just doing eligibility? Uh tell me a little bit about you know, kind of what you see different practices doing with those virtual assistants on that front end side. Yeah, I I think that it's hard sometimes because you like I love to control things. It's just you know, I think maybe it's part of the doctor mentality. I know it's not just the doctor's, I think there's plenty of us on the planet, but it's hard letting go of those positions not being in the office. But at the same time, the practices that I see being most successful are the ones that have been able to let that go and be able to say, okay, these are the things I'm going to outsource to have somebody remote doing it. Just to get you get the economies of scale. Um, I think as long as you have the training and the accountability loops, you can have a very successful offshore or you know, outsourced partnership with the virtual assistants. Um, how have you seen practices really engage those individuals so they're part of the team, but also relinquish some of that control so that they can, you know, do those jobs and take that off the practices hand? Because I think it's just too much for a front desk office person to do. Do you guys set up policies and procedures as well with the practice? Okay, that's awesome.

SPEAKER_02 9:13

That's great.

SPEAKER_00 10:26

Um, a big thing to recognize. Like when I see our practices, they have someone in the front desk, right? They're obviously checking in patients, they're handling things that are coming across their desk, but that more strategic, I need to make sure that we are prepared for the next day, that piece of stuff often gets put back to the back burner, right? Because you've got somebody complaining, you've got the phones ringing off, you've got taxes coming in, you've got doctors asking questions. And so to have somebody dedicated who's not sitting in the chaos of a front desk, which if anybody's been in a practice, it's the chaos of a front desk. Like they can really think through, okay, I need to do eligibility, I need to do um, you know, prior authorizations, and I need to you know figure out the failure points of certain verifications. And for the listeners, like these are the number one denials that we get is really eligibility, verification, prior authors, depending on the type of practice that you're in, obviously. So that if you can really make sure that those tasks are managed, like great, then it's more revenue. But then the other piece that you just mentioned is this idea behind you know appointments, uh, appointment reminders, which you know, maybe that's you know automated through your software, but then okay, I have open slots, I have no shows. How do I get a wait list to fill those no-shows so that I have no wasted appointment slots for your physicians? Because it's you know, you'd be surprised. I mean, you end up, I mean, I'm sure you know, you can have 20% open uh availability. And if you don't have somebody fill in those spots, then you know, that's overhead you're not covering. So, yeah, yeah. Yeah, it's it's the book. Oh, I'm blanking on his name, the Who Not How book, um, by I think it's Dan Miller. Um, I may be getting that wrong, but uh the who not how is this premise around delegation. And I think for independent practices, um, really of whatever size, we have practices that are you know single positions, we have practices that have you know 20, 30, 40 physicians. And so the who not how approach, when I see the most successful physicians, it's okay, what is my zone of genius? What am I gonna say? These are the things that I have, me personally, have to do, and these are the things that I'm gonna start to delegate. And that happens over time. And um, but I see these roles as sort of that low-hanging fruit, one of the first things you start to delegate. Um, and especially even if you have a front desk staff, as your patient volume increases, those individuals can't handle everything. And so having this individual who can help triage, you know, some of those things that we just mentioned, I think is key. Okay, so if they're like, I have no idea what I need, I don't know what day it is, I've just trying to keep my head above water. Can I come to you and say, okay, here are the problems I'm having, help me craft the role and the job, you know, description to help this work. I also think uh we have many of our practices struggling with the back end, meaning we send the patient statements, um, but nobody's really paying the patient statements. And so calling patients and having a script together to say, okay, hey, we've got to start collecting these balances. Is that a service that you guys provide?