Healthcare Payment Systems: Fee Schedule Payment Systems, 1st Edition (Paperback) book cover

Healthcare Payment Systems

Fee Schedule Payment Systems, 1st Edition

By Duane C. Abbey

CRC Press

152 pages

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Paperback: 9781439840238
pub: 2010-10-25
eBook (VitalSource) : 9780429250972
pub: 2010-10-25
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For healthcare providers and patients alike, the ways of private third-party payer payment systems can be mysterious and oftentimes quite frustrating. Payment for hospital, nursing, or homecare services can be subject to a variety of payment systems including cost-based and charge-based or those with payments that are determined in advance. Knowing the specific rules needed to navigate each type of payment system is essential for all healthcare administrators and accountants.

Healthcare Payment Systems: Fee Schedule Payment System, the second volume in a series by expert consultant and workshop facilitator Duane Abbey, is dedicated to fee schedule payment systems. Always accessible and entertaining in his approach, Dr. Abbey illustrates the diverse challenges involved with these systems through the discussion of reimbursement claims for several individuals in a fictitious community served by a hospital, a nursing facility, and a hospice among other healthcare providers, Including more than 60 very real scenarios that illustrate best practices for various fee payment challenges, this comprehensive volume —

  • Explores the general concept of usual, customary, and reasonable (UCR) that is often applied by private third-party payers
  • Provides web links to a number of essential resources including various government acts and manuals
  • Discusses in-depth what is arguably the most complex fee schedule system: the Medicare Physician Fee Schedule
  • Defines a comprehensive list of acronyms used in the medical payment industry

Conceptually, fee schedule payment systems are one of the simpler approaches; however, even straightforward healthcare payment systems can, and indeed do, become quite complex. No payment system exists in a vacuum. In fact, when services are provided, the reimbursement from multiple payment systems may be required. This guide shows you how all these systems work, as well as how they interface with one another in everyday practical use. Understanding the differences among systems and learning how to navigate them can make a huge difference in whether a claim is accepted or not and how much payment is allowed.

Table of Contents

Introduction to Fee Schedule Payment Systems

Overview of Healthcare Payment Systems

Claim Filing and Payment

Overview of Medicare Fee Schedule Payment Systems

Private Third-Party Payer and Commercial Fee Schedules

Payment System Interfaces

Healthcare Provider Use of Fee Schedules to Set Charges

Summary and Conclusion

Healthcare Provider Concepts



Nonphysician Practitioners and Providers


Hospitals and Integrated Delivery Systems

Special Provider Organizations

DME Suppliers

Skilled Nursing Facilities

Home Health Agencies

Independent Diagnostic Testing Facilities

Comprehensive Outpatient Rehabilitation Facilities

Clinical Laboratories

Ambulatory Surgical Centers

Summary and Conclusion

Anatomy of a Fee Schedule Payment System


Basic Fee Schedule Payment Formula

Basic Architecture for Healthcare Fee Schedule Payment Systems

Relative Values

Classification Systems

Usual, Customary, and Reasonable

Claims and the Adjudication Process

Adjudication Features for Fee Schedules

Code Sets and Adjudication

Participating Healthcare Providers

Chapter Summary

Medicare Physician Fee Schedule


Underlying Code Classification Structure

Payment Amounts under the MPFS

Elements in the Full MPFS




Status Code

Relative Value Units

Professional Component/Technical Component Indicator

Global Days

Pre-Operative, Intra-Operative, Post-Operative Percentages

Multiple Procedures

Special Surgical Payment Indicators

Endoscopic Base Code

Conversion Factor

Physician Supervision of Diagnostic Procedures

Calculation Flag

Diagnostic Imaging Family Indicator

Outpatient Prospective Payment System Imaging Cap

Updating and Modifying the MPFS

Global Surgical Package

Overview of Services Included in the GSP

Pre-Operative Window

Post-Operative Window

CPT Modifiers Separating Phases within the Surgery

Transfer of Post-Operative Care

Anesthesia Package

Special Surgical Payment Processes

Surgical Complications


Team Surgeons

Sequential Surgical Procedures: Separate Physicians

Staged Surgical Procedures

Bilateral Surgeries

Families of Codes

Nonphysician Practitioners

Special Utilization of the MPFS

Independent Diagnostic Testing Facilities

Comprehensive Outpatient Rehabilitation Facilities

Critical Access Hospitals

Ambulatory Surgical Centers

CPT and HCPCS Modifiers

National Correct Coding Initiative

Modifiers Used to Bypass the NCCI Edits

NCCI Coding Policies

Medically Unlikely Edits

Gaining Extra Payment through the MPFS

Changes and Change Process for the MPFS

Medicare Secondary Payer

Using the MPFS RVUs to Establish Charges

Summary and Conclusion

Other Medicare Fee Schedule Payment Systems


Anesthesiology Fee Schedule

Ambulance Fee Schedule

Clinical Laboratory Fee Schedule

Durable Medical Equipment Fee Schedule

Conclusion and Summary

Private Third-Party Payer Fee Schedule Systems


Using Medicare Fee Schedule Approaches

Usual, Customary, and Reasonable

Basic Statistical Concepts

Charge Data

Statistical Analysis of Charge Data

UCR Challenges

Establishing a UCR Schedule of Fee Payments

Provider-Based Clinics

Global Surgical Package

Multiple Surgeries

Bilateral Surgeries

Evaluation and Management Services with Surgeries

Assistants at Surgery

Co-Surgeons/Multiple Surgeons

Staged Surgical Procedures

Surgical Families

Anesthesia Services

Mid-level Practitioners

Physician Supervision

Edits to Verify Correct Coding

Extra Payments

Choosing the UCR Data

Challenges in Developing Fee Schedule Payment

Summary and Conclusion

Appendix: Case Study List

Acronym List

About the Author

Duane C. Abbey, PhD, CFP, a nationally recognized expert in payment systems, is president of Abbey and Abbey Consultants, Inc. Dr. Abbey works extensively in all areas relating to coding, billing, and reimbursement with particular emphasis on the chargemaster and outpatient payment. His consulting activities include hospitals, clinics, and physicians. Dr. Abbey. Another special area of expertise includes APGs/APCs. He is recognized as the leading expert in the nation in APGs/APCs by the thousands who have attended his seminars, read his publications, and/or contacted him for his services. Recently, he has begun to turn his focus towards Medicare’s new RAC audits.

Subject Categories

BISAC Subject Codes/Headings:
BUSINESS & ECONOMICS / Industries / Service Industries
MEDICAL / Administration