Most acupuncturists develop their fees by figuring out how much they want to charge for a visit and including everything they do in that fee. For example, an acupuncturist may charge $60 (this number is not based on anything nor is it a suggestion of any kind) for a visit and provide acupuncture, heat packs on the back, a heat lamp on the feet, and massage with liniment for a few minutes after the acupuncture. This will not work for insurance billing.
Insurance billing requires a separate code (Current Procedural Terminology codes, described in the chapter on charting) for each procedure or service performed. Each of the services described in the previous paragraph has a separate code. And each is individually reimbursable. This has pros and cons. It may mean that you can get more money than the $60 by listing each service separately. Of course, insurance may not pay an acupuncturist for each of these services. Or insurance companies may deny some of them but not all of them, meaning more paperwork hassles. But many will pay for each and every one. In California’s workers compensation system, the reimbursement for the treatment described in the previous paragraph would be around $132. Anyway you look at it, improper coding, including packaged services, is unethical, possibly illegal, and can have ramifications.
A proper fee schedule will have individual codes and how much is charged for each of these codes. Charting should include individual services and their corresponding charges. What the charges are for each code is completely up to the individual practitioner. While these charges can be influenced by competition, geographic location, and other business factors, there should not be any hint of collusion involved. Collusion is where several competitors sit down together and say they want to charge a patient (or customer) the same thing and artificially inflate consumer cost. In other words, it is okay to call around and see what other acupuncturists are charging in your area and then decide how much you want to charge. But it is illegal to invite everyone to pizza and decide that you are all going to charge $75 per acupuncture treatment. For this reason, the associations in our profession cannot answer any questions or research how much acupuncturists charge their patients.
Whether or not a provider bills insurance, they should have a fee schedule and stick by it. Legally, a patient may request a copy of the fee schedule and the provider must supply it. Not having one and using it consistently can leave the door open to charges of fraud if anything goes wrong with billing.
It is legal and probably desirable to offer discounts to certain individuals, so long as they are clearly determined in your fee schedule. Generally the base fee, and the most expensive, is what you plan to charge insurance. This doesn’t mean you will get this with each company, but you still bill the same. For example, if your fee for an acupuncture treatment is $100, but you know XYZ insurance company will only reimburse you $50, you still bill the full $100. Always. You will have to write off the $50 not received through accounting procedures, but everything will be done legally. What is illegal is charging XYZ company $50 while charging ABC company $100.
So what kind of discounts should be offered? First, the insurance rate should be a good deal higher than what is reimbursed. This is because some insurance companies will pay higher than others and a practitioner doesn’t want to leave money on the table. So that means charging $100 or $150 for an acupuncture treatment is not unreasonable. There are a couple situations where you can be reimbursed at these levels.
But the average patient isn’t going to pay $150 once or twice a week for acupuncture. So the first and most important discount is for patients who don’t have insurance. There are two ways to provide this discount.
In California, the law is very generous and allows a separate “non-insured” discounted fee and a “cash” fee. These fees can be any value you would like and you may offer one or both. There can be an economic hardship fee on a sliding scale, so long as that scale is structured, pre-determined, and consistently applied. It may look a little suspicious if the non-insured fee is dramatically different than the insured fee.
Discounts for the rest of the country
In most of the rest of the country, it is illegal to bill insurance more than an uninsured patient. There is a way around this though. You can have a Time Of Service (TOS) discount. This is a discount that is given only if the bill is paid at the same time as (or before) the service is performed. Technically, if an insurance company could pay in advance or on the day of the treatment, they would be eligible for this discount. But because that never happens, it becomes a discount for uninsured or cash patients. These TOS discounts should be clearly delineated in your fee schedule.
As a note of caution, insurance law is different in individual states and a practitioner should always be well versed in the insurance laws of their state, in addition to federal insurance laws.
In the fee schedule, you can delineate discounts for any “class” you would like. You might want to provide discounts for senior citizens, students, military personnel, friends, your sewing or soccer buddies, or any other group of patients. The trick here is to make sure they are applied consistently. In other words, a definition of who qualifies for the discount is needed and then everyone who qualifies actually receives the discount every time.
Offering discounts to “protected classes” are considered discriminatory and highly illegal. These protected classes are anything based upon race, gender, religion, and disability. The reason for this is by giving a discount to one of these classes you are excluding the rest within that class. For example, if you want to give a discount to Wiccans and Jews, you are excluding Christians and Muslims from that discount and therefore discriminating on the basis of religion, which is illegal under both state and federal law (Healy, 2008).
Sliding scale discounts are possible in many states. In general, they are illegal unless the state has a specific legal exemption allowing them. In those states where it is legal, it does not mean you can charge whatever you want to whomever you want. You need to establish a firm scale, based on income levels and you need to have patient documentation supporting those incomes in order to give them the discount (Healy, 2008).
What to tell patients
After so many practitioners charge a straight fee, even though this does not serve for insurance purposes, it is hard to try to explain that you charge according to the services you perform. A way around this is to use the following script when a potential patient asks how much it costs:
“Just like a doctor, we don’t know what we are going to need to do or how much it is going to cost until we see you. A typical initial visit will cost between $xxx and $xxx, usually on the lower end, and subsequent visits usually run from $xxx-$xxx, again usually on the lower end of this range. If you would like, we will be happy to provide you with a copy of our fee schedule.”
Most patients readily accept this explanation of charges and it is in complete alignment with how most medical professionals bill their patients.
In summary, to run a practice legally and to minimize the chances of being prosecuted for insurance fraud, a practitioner needs to develop a fee schedule that outlines all the fees and discounts offered. All procedures offered by the practitioner should be on the schedule. Please see the section on CPT codes in Chapter 4 for potential codes to include.
Sam Collins (Oct. 2008), an expert in insurance billing, states four criteria for an appropriate fee schedule. A fee schedule should be reasonable, defensible, consistent, and publicized. Reasonable is justified by looking at other acupuncturists in your area and top reimbursement rates, be they insurance or workers compensation. By using RBRVS as a basis of your fee schedule, it is defensible. You as a practitioner and your staff need to apply it consistently. And it should be public, either upon request or as part of the patient’s initial paperwork.
Fee schedules should be reassessed on an annual basis by looking at changing economics and medical reimbursement rates. A practitioner can change the fee schedule as necessary, though annually is most appropriate. It is good business practice to warn patients several months in advance of any fee increase.
Developing a fee schedule
A fee schedule is a legal requirement for a medical practice. Let’s rephrase this, if a practitioner does not have a fee schedule, and sticks to it or is not consistent with an existing one, they are open to allegations of fraud and will have no defense against them. And there have been acupuncturists who have been convicted of fraud, so this is a real worry.
A fee schedule should include every service your practice bills for as well as any products sold. This site does not specifically go into how much to charge for any of the procedures discussed. There are several reasons for this. In a free, capitalist society, the biggest no-no is to have monopolistic powers (unless granted by the government). To have specific amounts in this book would be legally considered to be collusion and therefore tantamount to creating a monopoly and illegal. Having said that, there are guidelines given by the AMA and used by Medicare as reimbursement amounts. These are called the Resource Based Relative Value Scale (RBRVS).
Resource Based Relative Value Scale (RBRVS)
The Resource Based Relative Value Scale (RBRVS) is a set of guidelines developed by the AMA and supplemented by the Centers for Medicare and Medicaid Services (CMS). These guidelines determine the baseline for how much Medicare will pay medical providers for certain services and equipment. There are three variables:
Relative Value Units (RVUs): These units are a number representing the cost for a given procedure or service. There are three components of these costs: physician’s work, practice expense, and malpractice costs. For example, the RVU for an acupuncture treatment (CPT code 97810) is .87.
Geographic Practice Cost Index (GPCI): This is a number that varies according to where the physician is located and takes into account the fact that it may be more expensive in some locations than others. For example, Los Angeles’ GPCI is higher than that of Arkansas’. The problem is that there is a separate GPCI for each of the three components that make up the RVU (physician’s work, practice expense, and malpractice) and therefore this gets very complicated very quickly. The bottom line is geography influences how much each service is reimbursed under Medicare.
Conversion Factor (CF): This is how much each RVU is worth in terms of dollars. The CF for 2017 is $35.8887.
In its simplest – and not entirely accurate – form, the amount reimbursed is equivalent to multiplying each of these variables together. If we don’t consider the GPCI, this means that acupuncture should be reimbursed by Medicare at .95 x 24.6712 which equals $23.44. This of course isn’t accurate. First, Medicare does not pay for acupuncture. Second, this does not take into account where the service is performed. But this can be used as a guideline. Generally the Medicare reimbursement is about the lowest an insurance company will pay. Your fees should probably be based on this number but be a multiple of it. In one of the authors’ practice, the fee schedule is based on over 2 times this figure. Using a multiple of Medicare reimbursement is probably the easiest, most accurate, and most defensible way to develop a fee schedule. It is also one of the rarest ways in our profession.