Monday, February 25, 2008
Medical Billing - Allowable Tables
In the world of medical billing, nothing is more dreaded by billing companies than allowable tables. There are numerous reasons for this. In this particular installment on medical billing, we're going to cover the main reasons why allowable tables are such a pain the backside.
Before we do that, it would probably be a good idea to explain what an allowable table is for those who are not familiar with them. Allowable tables usually refer to Medicare billing, though there are other government carriers that also have allowable tables. An allowable table, as applied to Medicare, is a table of prices for each item that can be billed to Medicare. In other words, let's say a patient needs a wheelchair. If wheelchairs can be billed to Medicare, they will have a table entry for how much Medicare will pay for that wheelchair, whether it be to purchase it or rent it on a monthly basis. Sounds simple enough and it is. The problem is what this actually means to the medical billing company.
The first problem this presents is actually getting the allowable tables from Medicare. The reason this is important is because a medical billing agency has to know how much they are permitted to bill for each item. If they overbill for the item and actually expect to get paid that much, it is going to come as a big shock to them when their payment is considerably less than what they expected. So a medical billing company must get these tables setup in their system. To do this, they have to get them from Medicare. Guess what? It's not a free service. They have to pay for it and it's not cheap.
Then there is the matter of actually loading these allowable tables into their system. This has to be done just so or nothing is going to bill correctly. This is a common problem with an allowable table update. Sometimes the files are corrupt, sometimes the software has a bug in it and on and on. Agencies hate when it comes time to have to do an allowable table update, which is usually done four times a year, every quarter.
The bigger problem is when a company bills for a certain item that costs them a certain amount of money and they are hoping to get a certain return on that item. For example. Let's say a company is selling a wheelchair to a patient for $350. The wheelchair costs the company $250 and they hope to make $100 profit on the sale. Medicare has the allowable set to $350 so all is well. Then, the next quarter update comes out and Medicare lowers the allowable for that wheelchair to $300. The agency now can only bill for $300 and can only make $50 on each sale. This cuts their profit margin in half. This is more common than you know and it drives medical billing companies crazy.
The sad part is, there is nothing that can be done about this. Medicare will allow what it will allow and that is the end of it. The company has no other choice but to absorb the loss. Yes, allowable tables are a real pain in the backside.
Before we do that, it would probably be a good idea to explain what an allowable table is for those who are not familiar with them. Allowable tables usually refer to Medicare billing, though there are other government carriers that also have allowable tables. An allowable table, as applied to Medicare, is a table of prices for each item that can be billed to Medicare. In other words, let's say a patient needs a wheelchair. If wheelchairs can be billed to Medicare, they will have a table entry for how much Medicare will pay for that wheelchair, whether it be to purchase it or rent it on a monthly basis. Sounds simple enough and it is. The problem is what this actually means to the medical billing company.
The first problem this presents is actually getting the allowable tables from Medicare. The reason this is important is because a medical billing agency has to know how much they are permitted to bill for each item. If they overbill for the item and actually expect to get paid that much, it is going to come as a big shock to them when their payment is considerably less than what they expected. So a medical billing company must get these tables setup in their system. To do this, they have to get them from Medicare. Guess what? It's not a free service. They have to pay for it and it's not cheap.
Then there is the matter of actually loading these allowable tables into their system. This has to be done just so or nothing is going to bill correctly. This is a common problem with an allowable table update. Sometimes the files are corrupt, sometimes the software has a bug in it and on and on. Agencies hate when it comes time to have to do an allowable table update, which is usually done four times a year, every quarter.
The bigger problem is when a company bills for a certain item that costs them a certain amount of money and they are hoping to get a certain return on that item. For example. Let's say a company is selling a wheelchair to a patient for $350. The wheelchair costs the company $250 and they hope to make $100 profit on the sale. Medicare has the allowable set to $350 so all is well. Then, the next quarter update comes out and Medicare lowers the allowable for that wheelchair to $300. The agency now can only bill for $300 and can only make $50 on each sale. This cuts their profit margin in half. This is more common than you know and it drives medical billing companies crazy.
The sad part is, there is nothing that can be done about this. Medicare will allow what it will allow and that is the end of it. The company has no other choice but to absorb the loss. Yes, allowable tables are a real pain in the backside.
# posted by Medical Information : 3:23 AM
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