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Hi everyone. This is Sam Collins, your coding and billing expert for acupuncture, the American Acupuncture Council. And of course for you giving you another episode with, to the point from the American Acupuncture Council and malpractice carrier on keeping you up to date, what’s changing. What’s new as the coding and billing expert always want to make.
You’re on top of everything that’s going on and what the changes are going to be for next year. So let’s get started with understanding fees. So let’s go to the slides, what I want to make sure there’s a good understanding of is how do I determine fees? And so you’re going to see what I have here, the RVU update, which stands for relative value units and how that affects your fee schedule, what changes you can make at the beginning of the.
And how your fees are going to be paid. Well, let’s talk about what are our fees. When you hear this term, you see our, or usual customary and reasonable, what does that mean? Well, it’s the amount that’s paid for medical services based on your geographic area. In other words, what is usually in customarily pay kind of like houses, what’s the usual and customary for your neighborhood.
It’s based on what the houses sell for. So in that sense, that’s usually the fee that’s charged for a doctor for a service and falls within the rains that others charge within the area. It is a service deemed necessary to their current condition. But what is the usual fee? Now keep in mind that usual fee has some variances.
Are you on the upper end or Lauren? I hope that we’re somewhere in the middle because here’s my concern. Let’s say you’re charging $50 for a service. That someone, including insurance companies are willing to pay $75 for if you’re only billing it at 50, of course, what are they going to pay you 50, even though they would pay at 75.
So I want to give you some tools that help you to establish a better way of understanding your fee. What let’s understand, what is the model we deal with? There’s a course in the insurance model. And that’s the reasonable customer feed that insurance has say are the acceptable range. And of course there’s a lot of variation to that.
And of course, as you can expect, if you belong to an insurance, like say you joined blue cross or blue shield or Ash, that’s going to be a set fee, which is probably not usual and customary, but the trade-off is I joined. And hopefully you get more patients, but you take far less money, not something we’re really that tickled with and less volume can be there.
So I look at it more from the patient value. What is the service worth that a patient is willing to pay for? And this is where we have to provide the value of the service. So someone’s willing to pay. And I think this is the model that acupuncture really thrives in the American physical therapy association has indicated that they find that as soon as people have a $30.
They start losing about a third of their patients. Do you know that’s not true for acupuncturists? So I’m always a little nervous that we sometimes undercharged for what we’re doing, because we’re afraid of that amount being something that’s going to scare the patient off, but what you have to think of, what’s the value and want you to think of as an acupuncturist, think of the value for a moment.
How many of you have been to a medical. And when you went in, you’re in pain and when you left, you felt better. And I’m not saying this as a negative in a way against medical doctors, but that’s not the way they treat. Think of how many times you have a patient come in. Maybe they have a headache or back pain, and they’re not even sure acupuncture is going to work.
But then after the visit, they’re like, oh my God, I can’t believe I’m not in pain. I’m 50% better than. There’s a lot of value there. So I want us to start to think of the value of the service and how we establish rates and using something called the relative value units. The relative value unit is a value determined actually by the federal government on the cost of each medical service.
Every CPT code has a relative value. Now what this relative value does, it allows you to compare the value of one service to another. So by example, if there’s a service that has a value of one. And another service that has a value of two. That would mean that service that’s a value of two would be twice the cost.
And so one of the things I want to do with this is take the RV use to help us begin, to establish a reasonable fee for the services we provide. The development of this started way back in the eighties and Harvard, and it continues to be updated every year by CMS. In fact, it is updated already for 2022, and I’ll give you a preview of that coming up.
So here’s what I’d like. You all to do. Take a moment. And tell me, what is your fee for these four codes now, obviously you don’t have to tell me, but I’d like you to think or write them down. What do I charge for the first set of manual acupuncture? What’s my fee for the second set or additional set. How about a mid-level new patient exam?
What do you charge for that? And then what do you charge for massage? What I’m trying to point out is if I can tell you the value of any one of these servers. Based on the relative value. I can tell you what the value is for another. In fact, that’s how insurance companies decide to pay for certain services is based on the relative value of each.
So let’s take a look at what is relative value. You’re going to see here a whole page of relative values. And I put all the common codes. If you’ve been to a seminar with me, you’ve seen this, but this is the update for 2020. What you’ll see immediately is that there’s been an increase. If you notice that I put the arrow around it, you’ll notice the relative value for now.
4 9, 7, 8 1 0 is 1.16. Whereas last year was 1.06. That’s about a 10% increase. So if someone says to you, Hey, acupuncturists are having an increase in fees. Actually that’s true. And it’s based on the relative values have been increased relative value though, just compare one service to the other. So the easiest way to think of this is if you look at the relative value of 9, 7, 8, 1 0, you notice as a value of 1.16, and then the value of 9, 7, 8 1 0 is 0.87.
Now, when you look at that, you’ll go, what does that mean, Sam? Well, I’ll make it real simple this way. What if you charge and again, this may be a little high. What if you. $116 for your first set. What would be the price of the second set? $87. That’s the idea. So if you can tell me what you charge for one code, and if that code is accepted and paid by a payer, I can tell you what they’re going to pay for everything else.
Now, the good news is you don’t really have to look at that many codes. I know this list is a little. But I want you to think of what services are you billing on a regular basis? That’s all we need to look at. Don’t worry about all of them. So how would I do this? You’re going to see her on the right. I did some calculations.
Now don’t be put off by the math part of this. It’s not complicated. All you have to do is tell me, what do you charge for 9 7, 8 1 0. So now I want you all to think of that. I asked you a moment ago. What do you charge for 9, 7, 8. You’ll notice I put a charge of 65. Now you might say, well, Sam, how’d you come up with 65.
I’m just saying that’s a typical fee for a lot of acupuncturist for the first set. So let’s just say 65 was your fear is your fee to figure out the fee for every other service you don’t guess and go, well, I guess I’ll charge $10 less. Here’s what we do. We take our. And we divide it by the services relative value.
So you’ll notice that I take 65 divided by 1.16, and it gives me 56 0 3. Now 5,603 is actually not the price of something. It’s the conversion. I then take that number and take any other codes relative value. Multiply to tell me the fee of that service. So by example, you’ll notice here 9, 7, 8 1 1 has a value of 0.8, seven.
So I’d take 56 0 3 times 0.87. It gives me 48 75. So that means if my price for a 9 8 9 7 8 1 0 is 65. What should be my price for a 9 7 8 1 1? Well, I would round up to 49, but I think you get my point that way you make sure you’re not cheating yourself. And I’ve seen a lot of providers do this. They’ll build a first set of 60.
And the second set of 50, 65. Now, of course, that’s your option. You can do that, but he won’t be my concern. What if the insurance company pays you in full for the second set? What does that tell you? You’ve done with the primary code you’re billing way below. So I can do this backwards as well. If they allow 65 for the one, one, I do the same calculation the other way, and I do it the same for every service.
So think of it in simplest terms, the difference between the first set and the second set is about 30%. So if your first sets a hundred seconds, that would be 70 or in this case 65 to 48, 75 or 49. Well, the same applies with any of their code. Like you might say, well, what do I charge? Or what should I charge for an exam?
Well, you notice the relative value for 9, 9, 2 0 3 is 3.2. So I take 56 0 3 times 3.29, and it gives me 180 4 33. Now the reality here is if you look at 1.16 to 3.29, it’s not quite three times the amount, but you can see it’s pretty close. So really what you want to think of is that the price of. Exam should be three times the price of your acupuncture service based on the relative value of the service.
Now, how these relative values work, they determined that the amount of work that’s involved with each service, and that includes not only the work involved with the service, but the type of provider, what your malpractice costs are and so forth. So again, 180 4, based on a $65 price or about three times the amount would be pretty reasonable.
Well, what about other services? Have you ever built, you know, let’s say. How would I figure out my price for massage? Well, massage value now is 0.8, eight. So I’d take 56 0 3 times 0.88, and gives me 49 30. What I want to make sure is that my prices for my services match each other. I’ve seen offices, bill out some pretty large amounts for one code at a very low amount for the other code.
And my question is why are you doing. What was the purpose? Now, if you can say to me, well, Sam, I did that because I just don’t want to charge my patients as much. And you have a good reason, I’ll say, okay, because maybe that fits your neighborhood, but if you’re doing it because you don’t know, like by example, what if you charge 50, 65 for the first set and you charge only $30 for massage?
Well, you. But if someone’s willing to pay 65 for a first set based on relative value the exam, or excuse me, the price for massage would be about 50. So start to really go through these coasts and start to see that. And here’s the beauty. It increased for acupuncture. So, I’m not sure you’ve heard this or not yet, but the prices for acupuncture related to rates associated with Medicare rates, or anyone will go up next year.
Now let’s not get too excited. The rate increase is about six to 7%, but that’s well above cost of living. So, yay. Finally, we’ve got an increase. Do you know? No other profession got an increase. If you go through all the fees, actually chiropractors, medical doctors, physical therapists, all got about a three to 4% return.
Acupuncture got a 6% increase. And I think mostly because the relative values are becoming more apparent. So you’ll notice the relative value for 2021 was quite a bit less now, 1 0 6 to 1.16, you think? Well that’s 10%. Oh, no. Because remember that’s again, already up at that level. So again, probably about six or 7% to give an example of what I’d like you to do though.
Now, if you’ve been to a seminar with me, you’ve seen this RVU sheet and if you’ve never been come to a seminar or join our network, so you can get this type of information, but here’s what I’d like you to do. You don’t need to do every code, but start coming up with a competent, reasonable fee schedule.
Cause I don’t want you to. But I certainly don’t want you to undercharge. And what I find for most offices, frankly, you bill about five or six services regularly. And I would say the average acupuncturist has three to four of those that have the wrong value, which means 50% or more of the code you bill are undervalued, which means you’re just losing 50% of your income.
So what I’d like you to do is go through, do this for your ENM codes and not every code you don’t bill, all of them, acupuncture codes, probably heat like infrared or other ones. Bodyworker massage, pretty typical as well. And maybe a little bit of exercise. Now you might say, well, Hey Sam, I do some other services.
Fine. Do those as well, but realize you’re not going to do a bunch of these. And what I would like you to do with this is begin to break down the cost. So here’s an example, and this is just for California, Southern California, specifically for Los Angeles and orange county. Now this is something we do for our network members in seminar attendees every year is we give you the updated.
For Medicare, which of course means the VA. And you’ll notice there’s been an increase notice 9, 7, 8 1 0 last year was $40 and 7 cents. Now it’s 42 67. Now, is that enough to go? Oh my God, we’ve got a lot more money. No, but a 6% increase if you’re generating a hundred thousand dollars a year. Just on acupuncture codes.
That should be an additional 6,000. So you can see here a nice little jump. Now, remember these are just for the California rates. Every state, every county has their own rates. And again, if you’re a network member with me, or if you’re coming to an upcoming seminar, you will have access to all these. So, you know, the rates that way, you’re making sure that you’re getting paid the right amounts, because my concern is, if you build below these rates, what are they.
That rate. So you want to start to understand what is the value of my service, but let’s go beyond that a little bit. Here’s what I’d really like. You all to do, take a moment to create a spreadsheet, like what you’re seeing here. And you’ll notice what I’ve done is I just put some common codes for acupuncture from exams, through acupuncture, massage.
What I do with one column is put the RV use and then maybe the next column might be what’s your time of service discount. Maybe that’s your price for cash, you know, maybe. You know, five or 10% below what you normally bill, but then you have your regular rate, just regular. What I, bill insurance then of course, what I’d like you to do is go through from payers that have paid you in the last six months or a year and put down those amounts.
What does Aetna pay? Blue cross blue shield. Cigna. I guarantee you all have that. One of the things I do with network members is to go through this and say, Hey, look, let’s start creating a competent sheet. The realization. You don’t bill as many codes as you think. So you don’t have to do a lot, but go through that way.
But what if it isn’t a patient comes to you and they ask you because of course the next year we have the no surprise billing. Okay. What does my plan pay? Well, you can go to your chart and go, oh, your plan is going to pay XYZ dollars. And this is going to be your balance. What it also does though. It’s a chance for you to look to go, which of these are good or bad because as your practice begins to go into next year, what is your plan?
To really begin to maximize your office. One of the plans I would do is let’s do a survey of what is the better paying plans that we may deal with and how much are they paying now? By example, Medicare work comp are all standard fees. Most states have standard fees for that. So you can already put that in and at the very least I’d want you doing that.
So here’s an example with RV use. You can do a lot to determine your care. So by example, if you’re in the state of. The work comp rate in Texas, what they do is take this value 61 17 and they multiplied by any RVU. So by example, I can tell you exactly what the fee is for work comp in Texas for 9 7, 8 1 6.
Remember, it’s 1.16. So it’s 16% above this, or roughly close to about 67, maybe $68. Or how about if you’re in the state of Utah? What they do is use a conversion, but two different ones. If it’s an ENM code, they convert with a 56 conversion or 52 for other codes. So realize that the Medicare conversion is roughly $37 plus or minus depending on your county.
So that would be a starting point. And I’ll give an example. What if you’re admitted? If you’re in Michigan, what they do is they just simply take whatever the Medicare rates are and double them when it comes to personal injury. Now, one thing to be concerned with here is if you just double your rates on personal injury, that’s good because personal injury will pay you.
But what if you charge your other patients less? Remember you can have two different fees. So you’ve got to make a decision, even though I can charge double for personal injury. If you’re charging maybe only 1.5, that’s what you’re going to charge for them. What my suggestion is. Probably be at least 1.25 to 1.5 above Medicare rates.
Notice by example, the Medicare rates in for work comp in Michigan, they just take a conversion of 47 66. So this is where using RV use will help you. But take a look at this one. If you have a patient that’s with Boeing and particularly Boeing uses, and they’re employed with Boeing they’re blue cross blue shield, they sent a directive out this year.
What they pay is 175% of. So what if you got 90% of your patients with this plan and you’re billing a hundred percent of Medicare, you’re losing 75% of your money. Now keep in mind, maybe you don’t want to charge 175% because you still have a lot of patients that can’t afford that. So it’s going to balance somewhere, but my concern is, am I setting my fees off of my best insurance or best richest patients?
Or am I sending it off of my port? So I want to be somewhere in the middle there, but what I want more than anything is a competent fee schedule. If someone says, how did you determine your fees? You’re going to say, I use relative values to determine the value of my service. Tell me what an insurance will pay for one code, and I’ll tell you what they’ll pay for any other code, because relative values goes across the board.
As you can see here, by example in California, we’re comp is 1.2. And so simple way of looking Pennsylvania, 113% Florida, 200% for work comp. So lots of changes here that allows you to start to use this as a way to competently set up a fee schedule. And I’m going to suggest it’s the new year. Let’s start looking towards that.
Obviously, if you’re dealing with a VA patient, you’re going to get an automatic raise, but what if you don’t raise your rates? So what if you bill at last year’s rates, what are they going to pay you for next year? So you’ve got to make sure to bill the higher rate or bill your normal rate to make sure you’re getting the maximum amount out of it.
So here’s something I want to make sure everyone’s aware of. Do you know when we posted this, if you’re a member with us, you received an email on this Medicare fees. The deductible acupuncture fees increased six to 7%. Really good notice we posted this a month ago or thereabout. If you’ve not already go to the American acupuncture council network, Facebook.
And take a look at our Facebook page or in our site, just click on the new section. We update you there all types of things. The American acupuncture council wants to be your resource. We want to make sure that your claims get paid, because if you’re not getting. You don’t need our services. So frankly, we’re symbiotic.
We have to do a good job of helping you to make sure you have claims. We also offer a service. We call the network, take a look at our site, come to a seminar, be informed about information that’s coming out for you. Cause if you’re not informed about. You’re probably left behind. Take a look. We’ve got lots of live, meaning in-person seminars, upcoming, but also virtual.
So just pick the date that fits best for you because we have a vested interest in you. We want you to do well. That’s what we always give you this information. So I’m going to say thank you very much. Next week’s hosts are going to be Dr. Jeffrey Grossman. I wish you all a very good new year in a Merry Christmas, but also let’s plan and have a good prosperous 2022 see you next time.