Establishment of Fee Rates

Establishing fees for your health center is one of the most important financial tasks to be undertaken. Fee establishment is a requirement as stated in Chapter 16: Billing and Collections (Element A and B), and it’s vital to remember that having an up to date fee schedule means that your health center is not leaving “money on the table”. How is this possible? By remembering the following concepts:

  1. Review your fee schedule.  Reviewing your fee schedule will help to ensure your health center is collecting the optimal amount billed. For example, let’s say a health center bills out a service for $100 but the insurance payor allows $150. A health center is leaving $50 as uncollectable funds as the insurance payor would have paid this. If the fee schedule isn’t reviewed, a health center may not know if insurance carriers updated their fees/allowables and would reimburse more for a service. Analyzing a subset of fees (select the top 5-10 codes and then compare fee schedules) may give a health center insight about the amount of money which could be collected but is not, thus not maximizing revenue. 
  2. Ensure that you review local and prevailing rates. Some health centers utilize a third party vendor which evaluates the fees for the local market and compares them to other local health care entities within the area. Other health centers compare their fee schedule with the Medicare fee schedule and then increase theirs by a percentage (example, increase fees by 80%-150% based on the health center’s cost). While there is no wrong way to review a fee schedule, it’s important to complete a thorough evaluation. The industry practice is to review the fee schedule at least once a year.
  3. Read the fine print of insurance contracts. While insurance contracts may be extremely lengthy, the “details are in the fine print”. Payor contracts provide all the information that needs to be collected by health centers from their patients prior to submitting a claim for reimbursement. There may be room for negotiations with fees and reimbursement. Normally a payor has a regional representative, so it’s important to reach out to that individual and have a discussion. Remember, overhead expenses for a health center increase and it’s important to attempt to have a discussion on negotiation of rates. 

While this list is not inclusive of all methods to establish and review your fee schedule, it’s important to start the conversation. Maximizing revenue will lead to better outcomes and improved quality of care. For more information on HRSA requirements on setting fees, please visit:

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