In the world of anaesthetics, there’s a myriad of ways to set how much you charge your fees. Fee setting is complex and carefully choosing how you set your fees will ensure you maximise your income. First, let’s explore the different ways fees are set. This article presumes you understand how the RVG and “units” work. If you’re not all over it, read our blog about how billing works to get a good understanding first. Now lets see how to set your anaesthetic fees.
When you “no-gap”, you are effectively agreeing to accept whatever reimbursement the health fund (including the Medicare component) is willing to give you. You may decide to routinely no gap all of your practice, or only certain procedures. Most commonly, this is for shorter procedures, such as gastroscopies, colonoscopies and cataract surgery. Alternatively, you may decide to no-gap certain patient populations. Examples include full aged pensioners, or a child having a subsequent set of grommets.
This is the most common way fees are set. Your fee is derived from the number of units you earn for a case and the unit rate you set. For example, if you do a septoplasty that takes 60 minutes, you earn 11 units. If your unit rate is $50, then your total fee is $550. The patient usually only needs to pay the gap, which in this case is around $120, depending on the fund.
While it sounds complex, it can be applied across all of your cases. and from a billing administration perspective, is very simple. This method also ensures you continue to get paid if the case takes longer than expected or if you need to perform any unexpected procedures. You may wish to cap any gap the patient has to pay to $500, as if the gap is any larger, the patient’s rebate is reduced, and their gap payment increases substantially. However, there is no requirement to remain under the $500 gap cap, with the exception of NIB GapSure participating anaesthetists.
You can simply set a total fee for a procedure. Ignoring variables such as time, ASA 3 or adding an arterial line. An example of this would be $1500 for a sleeve gastrectomy. The patient’s rebate would then be determined by the final item numbers at the end of the case and the patient’s insurance. If the procedure takes longer or you need to do unexpected procedures, then your fee will still stay the same. The patient will then receive a larger rebate from their fund.
Set gap is where you accept the health fund rebate plus an additional gap paid by the patient. For example, for all your knee arthroscopies, you may charge a set gap of $200. This will mean that the final fee you receive will be determined by the health fund. You could argue that this style of billing could be unethical, as you are charging different total amounts for each patient for the same service. Patients whose insurance has higher rebates than other funds miss out on this additional financial benefit since they are paying the same gap. Additionally, you will only receive the equivalent of the health fund unit rebate if the procedure requires extra time or additional anaesthetic item numbers, compared to if you were to use a unit-based fee.
Each billing method has its pros and cons. No-gapping reduces billing complexity and understandably makes patients happier as there is no gap to pay. However, your income is then determined by the health funds and may not adequately compensate you. This can often be a good way to bill when you’re starting out, as you learn the ins and outs of the RVG.
Set total fee and set gap have the advantage of being simpler for the patient to understand, and enables the option of prepayment of accounts, therefore eliminating the risk of having a bad debt. In particular, set total fee can unintentionally punish the patient if their gap is greater than $500, and you could miss out on extra revenue as additional modifiers (such as for ASA 3+) and procedural item numbers (such as arterial lines) are paid to the patient, and not you. Set gap could be considered unfair, as patients with better health insurance rebates have the same out of pocket expense as patients with lower rebates.
That leaves the unit-based fee. The RVG is designed to remunerate anaesthetists adequately based on the complexity of each case. This usually cannot be determined until after the case is complete. If you’ve accepted a set fee for a procedure, and the procedure goes for an hour longer than you have expected and you put an arterial line in, you are effectively doing the extra hour for free. When you have a quality informed financial consent in place, and expert billing procedures, such as Solo Practice Management provides, the rate of bad debts is extremely low.
Often, you’ll need to employ a mixture of billing options. Some cases are likely to be no-gap due to external factors. Set fee or set gap makes sense for scenarios with a history of poor payers, such as bariatric surgery. Arguably however, the easiest way is just to use unit-based fees, ensuring that the patient and health funds pay you exactly what you are entitled to under the RVG system. That way, neither yourself or the patients are going to be adversely affected by case-by-case variations.
Only you can determine how much you should charge. Don’t be afraid to politely ask colleagues how much you should charge, as fees can be very region dependant. Additionally, no gapping certain procedures may be very common in one region, but not in another. Be aware that it is illegal to collectively agree with other providers to charge the same fees. However, it is not illegal to know what others may charge or even discuss the fees you each charge. In the end thought, you must come to your own conclusions about the fees you wish to set.
Initially, you may wish to consider keeping your fees on the lower end of the normal range for your region, or even no-gap all cases. This may support your practice and avoid awkward conversations with surgeons about patients complaining about your fees.
We hope this article helps you answer how to set your anaesthetic fees. If you do have any questions or wish to discuss to a billing expert, please contact our friendly team at hello@solopm.au.