Fee Increase 2016

Peter Forster About GPS, GPS Update

It is time once again for our yearly fee revision.

This blog post is intended to provide the details of how we went about determining the revised fees. Warning: This may have far more information than you want or need, and if you have specific questions it is best to talk to your clinician.

First, we reviewed information that is available about San Francisco Bay Area and national cost of living changes in the past twelve months. For some reason, the information about health care costs is not available for San Francisco, so we had to estimate it from two sources of information: national data on overall cost of living changes and health care changes (which allowed us to estimate how health care costs changed in relation to other costs) and local data on cost of living changes. From this we estimated that the cost of healthcare in the San Francisco Bay Area went up by between 4 and 5% in the past year.

Second, we factored into our calculation a number of significant investments that we have made in the past year, changes which are not perhaps that visible to our patients: a major upgrade in computer equipment, a significant increase in spending on online services, the hiring of new administrative staff, and a major investment in the renovation of the 211 Gough Street offices.

Third, we used three databases of fees that we have access to: a database of fees from an organization called Fair Health┬áthat allows us to see average charges in our zip code for a range of CPT codes that we use, a database that shows us “allowed” charges from insurance companies (obviously a much lower rate), and a database of Medicare fees (the lowest of the three).

From this we found a huge range of fees. The Fair Health database (which shows us what providers charge) suggested that our fees for certain CPT codes were much below the market rate (1/3 the market rate). However, there are two confounding factors – (1) this CPT database doesn’t breakdown charges by speciality and we know that Psychiatry has historically been paid less than other specialties in medicine, and (2) this database includes hospital clinics (which are much more expensive) as well as private practices.

Finally, we asked a number of colleagues what their fees were.

We found that their charges depended on the type of practice they had. Those psychiatrists who see patients for evaluation and management (what is known as “med management”) primarily charged higher rates than we currently charge. Those psychiatrists who see patients for psychotherapy (with weekly sessions with patients) tended to charge about the same.

From all of this we tried to figure out a plan that made sense.

First, we thought about the different amount of office staff and clinical staff time devoted to supporting these two kinds of patients. There is a big difference: patients being seen for evaluation and management are seen in person less often and have many more needs between visits (refills, questions, scheduling issues, etcetera, etcetera). In fact, this is the primary reason we had to hire additional staff this past year.

Second we thought about what our survey of our colleagues fees suggested.

Finally we tried to balance all of this with the knowledge that for many patients the cost of treatment is a big barrier to getting adequate care.

We decided to raise our overall fees by about the amount of our estimated cost of living increase for healthcare fees in the San Francisco Bay Area.

However, we did that by raising fees for Evaluation and Management codes by a larger amount and raising fees for psychotherapy codes by a smaller amount, to try to align our charges with how much it costs us to provide our services.

Along with this, we are going to change the billing codes that we use to more accurately reflect the service being provided (evaluation and management patients will not be billed using psychotherapy codes as we have done in the past).

We are also going to change the duration of some of our appointments to align with the CPT codes that we charge. For example, a routine evaluation and management follow up appointment which we had been scheduling for 45 to 50 minutes will now be scheduled for 35 – 40 minutes (which is the duration for the CPT codes that we use to bill for that service). This will allow us to have a bit more time to handle the between session requests that come in and are part and parcel of the evaluation and management service.

Finally, we preserved the reduced rate that we charge for records review (going through the extensive records we receive for many new patients can take hours) and for email responses and other administrative tasks (obtaining prior authorization approvals, talking to providers, etcetera) – which is about half the hourly rate we charge for other services.