Is Your Fee Schedule Draining Pediatric Practice Profits?

Why Pediatric Fee Schedules Deserve More Attention

Most pediatric practices don’t realize how much money they lose from outdated or misaligned fee schedules. These documents define what you charge for every service, but if they haven’t been reviewed in the last 12–18 months, there’s a high chance they’re out of sync with current payer reimbursements, geographic cost indexes, or coding changes.

The loss isn’t always obvious. Claims may still process, but at rates far below what’s reasonable for your location, service volume, or payer mix. This creates a quiet but continuous drag on cash flow, hurting profitability without triggering denial alerts or red flags. For many pediatric practices, the result is an annual revenue gap of 9–15%.

This kind of financial leakage directly affects your ability to invest in staff, update technology, or expand services. Altus Pediatric Billing helps pediatric practices analyze and adjust their fee schedules so they reflect real-world payer expectations and keep your revenue cycle on track. It’s one of the most overlooked—but powerful—ways to increase financial performance without changing visit volume.

How Geographic Factors Affect Pediatric Reimbursement

Understanding the Role of GPCI

The Geographic Practice Cost Index (GPCI) is a Medicare adjustment that accounts for local economic conditions, things like rent, labor, and malpractice insurance. Even if your practice sees few Medicare patients, these values still matter because many commercial payers use Medicare’s calculations as a baseline for their own schedules.

What Happens If You Ignore It

In high-cost regions, like major metro areas, ignoring GPCI updates can leave your practice underbilling by 8–12%. These regional factors are recalculated annually, and failure to apply the latest values means you may be charging below what you’re entitled to, even for routine services.

Practices that monitor GPCI trends and apply them to commercial fee schedules are far more likely to stay competitive and financially stable. If your team isn’t sure how to access or apply these adjustments, a pediatric billing specialist can handle this for you.

Medicaid Shortfalls in Pediatric Billing

Medicaid reimbursement remains one of the biggest challenges in pediatric care. Unlike commercial payers, Medicaid rates vary widely by state and typically pay only a fraction of what commercial plans reimburses for the same services. In many cases, pediatric practices recover only 60–70% of the cost of care provided to Medicaid patients.

This discrepancy is most visible in preventive care. For example, a well-child visit under Medicaid might be reimbursed $20 to $30 less than the same service under a commercial payer. Developmental screenings are even more underfunded, despite being essential to early intervention and long-term outcomes.

Practices with large Medicaid patient panels feel this pressure daily. Some have responded by limiting Medicaid slots, while others have adjusted their care delivery models. However, a more sustainable path is often to optimize the coding and billing process, making sure every billable aspect of a visit is accurately captured. This is an area where Altus Pediatric Billing brings deep experience, helping practices make the most of what Medicaid does offer.

Are Operational Gaps Making Your Fee Schedule Less Effective?

Even a perfectly calibrated fee schedule won’t deliver results if operational processes fall short. If your practice is collecting payments slower than expected, seeing frequent denials, or reworking claims regularly, the revenue impact quickly compounds.

For instance, practices with higher-than-average costs to collect often spend thousands more per provider each year just to recover basic revenue. This happens when billing workflows are fragmented, eligibility isn’t verified in real time, or charge capture is inconsistent. Similarly, a drop in clean claim rate is often a sign that errors are slipping through, whether in coding or demographic entry.

These operational red flags suggest that your billing system isn’t fully supporting the fee schedule you’ve created. When we evaluate pediatric practices at Altus, we don’t stop at the numbers—we look at the entire system and help teams strengthen both the strategy and execution of their billing process.

Uncovering Missed Revenue from Undercoding

Many pediatric practices unintentionally underbill because they’re not using CPT codes to their full potential. Behavioral health screenings, vaccine counseling, care coordination, after-hours services, and phone-based consultations are often left off claims entirely—not because they aren’t done, but because they aren’t documented or coded correctly.

Over time, this missed billing adds up. For example, using care coordination codes like 99487 and 99489 can increase revenue by $75 or more per eligible visit. G2211 is also very misunderstood but some payers are paying $16 – $25 extra for visits with this code. Yet very few pediatricians bill these regularly, often due to uncertainty about documentation or eligibility requirements.

Fixing these gaps isn’t about changing how you care for patients—it’s about aligning your billing process with the care you’re already providing. We help pediatric teams identify the top missed codes in their current claims and build easy workflows to capture them going forward.

Using Value-Based Opportunities to Boost Revenue

Many states are now pushing pediatric practices toward value-based reimbursement models. These programs often include bonuses or per-member-per-month payments for tracking health outcomes, addressing social determinants of health (SDOH), or participating in Medicaid Accountable Care Organizations (ACOs).

New CPT codes exist to reflect these services, but adoption remains low. For example, most pediatric practices still don’t bill for SDOH assessments, even though these codes are reimbursed under many Medicaid plans. By ignoring these codes, practices lose out on potential recurring revenue that supports population health initiatives.

As more payers shift toward blended models, your fee schedule needs to support both fee-for-service and value-based programs. If you’re not sure how to integrate these changes, it’s worth reviewing your schedule with a partner who specializes in pediatric billing.

Strategies for Fee Schedule Optimization

Start With a Full Comparative Analysis

Gather data from Medicare, Medicaid, and your top commercial payers. Compare your current charges and collections to these benchmarks. Look for CPT codes that consistently fall short of contracted rates, or services that are frequently performed but rarely reimbursed at full value.

Monitor Rates Regularly

Fee schedules must evolve alongside payer policies. Automate updates wherever possible, especially for RVU-based rates. Run quarterly Medicaid audits and set alerts for payer contract renewals or rate changes.

Focus on High-Impact Coding Improvements

Don’t try to fix everything at once. Start with the top 10 services your practice provides and make sure you’re billing them correctly, with all applicable modifiers and documentation. Build templates into your EHR and train providers on the most common gaps.

Leverage Fee Schedules in Payer Negotiations

Bring real data to the table when negotiating contracts. Show which services are underpaid and how that affects access or outcomes. Ask for carve-outs for pediatric services and build in cost-of-living adjustments when possible.

What to Watch After Optimization

Once you’ve adjusted your fee schedule, track key metrics to assess the results. These might include:

• Average reimbursement per visit, broken down by payer

• Revenue per Relative Value Unit (RVU)

• Net collection ratio (payments as a percentage of allowed amounts)

• Denial rates by reason

• Days in accounts receivable, especially for high-volume payers

Improvement in these metrics confirms your fee schedule is working effectively. Plateaus or reversals often point to lingering process problems or new payer policy changes.

When to Work with Pediatric Billing Experts

Optimizing a fee schedule is complex, and maintaining it is even harder. If your team lacks the time, training, or bandwidth to manage coding reviews, payer negotiations, and denial tracking, a specialized billing partner can close those gaps quickly.

Altus Pediatric Billing offers pediatric-specific expertise that goes far beyond generic billing services. From GPCI tracking and payer benchmarking to EMR integration and coding audits, our team supports every aspect of pediatric billing performance. Learn more about us here, or get in touch to schedule a fee schedule review.