Skagway clinic finance committee weighs switching fees to RBRVUs; staff to return with comparisons

At a finance committee meeting of the Skagway Municipality Del Memorial Clinic, members reviewed a proposal to change how the clinic sets fees and charges, discussing a shift to a resource‑based relative value unit (RBRVU) model tied to Medicare rates and asking staff to prepare a side‑by‑side comparison of current fees versus proposed rates for the board.

The change matters because committee members said it could raise the clinic’s billed fees to better match commercial payers while also requiring a 30‑day public notice before any adopted increases; committee members and staff emphasized concerns about protecting uninsured patients and clarifying how non‑Medicare items such as dental services and certain pharmacy charges would be handled.

Committee discussion and next steps

Melanie Patton, the clinic’s billing and coding manager, told the committee that the clinic’s current policy is already “based off resource based relative value units,” and that Medicare’s fee schedule is the common national reference. Patton said the clinic has been setting its codes at “300% of Medicare’s fee schedule” for codes not covered by a previous fee analysis, and that commercial payers are increasingly basing reimbursements on RBRVUs. "It's a lot easier to defend these charges if we have to appeal things with insurance companies because we're taking into account what we're spending on provider time," Patton said.

Alex (staff member) and others recommended tying most services to a simple matrix linked to the Medicare fee list rather than keeping a large, manually maintained Excel schedule or relying on an Optum fee‑analyzer subscription. Alex said using Medicare as a base and publishing a link to the live Medicare list would make prices more transparent to board members and patients.

The committee reviewed an example matrix from the Girdwood Clinic, which applies multipliers to Medicare rates by service type (for example, procedures at about 425% of Medicare in that example; radiology at about 450%; laboratory at about 425%; behavioral health at about 200%). Committee members and staff discussed that those sample multipliers create a straightforward reference: "You could go on there and see the code and say, oh, this is what it's gonna cost," Alex said.

Impacts on dental, pharmacy and uninsured patients

Members asked how the change would handle services Medicare does not cover. Patton said dental codes require a separate approach; she noted an independent research product that assigns RBRVU‑style values to dental procedures. For non‑Medicare clinical services such as commercial CDL physicals and cash‑pay sports physicals, staff proposed isolating those codes and treating them under a separate header.

Pharmacy billing was a prominent concern. Patton said most medications currently dispensed by the clinic are billed under J8499 (an unspecified drug code) and are often contractual write‑offs. She estimated that "probably 90%" of those dispensary medication charges are currently written off when not reimbursed. Patton said that, once an on‑site pharmacy is operating and able to bill Medicare Part D and commercial pharmacy plans, the clinic would be able to bill prescription plans and that "probably 97% of prescriptions will be covered and reimbursed by the patient's insurance." She also said she will bring a draft contract with wholesaler Cardinal Health (Cardinal Pharmacy) to the next board meeting.

Optum fee analyzer and comparators

Staff and committee members criticized fee‑analyzer percentiles (Optum) as difficult to defend in a small market like Skagway because local charges can self‑inflate; Patton said the Optum product uses percentiles that reflect local reported charges rather than a cost‑based standard. Committee members noted that Premera (a local large commercial payer in the region) historically was used in the clinic’s 2021 fee analysis and that many commercial payers, including Aetna and Blue Cross Blue Shield affiliates, have shifted to RBRVU‑based schedules.

Timing, public notice and no final vote

Committee members did not vote to adopt any change. Instead the committee directed staff to prepare a comparative spreadsheet showing current fees, proposed RBRVU‑based fees, a separate list of Medicare‑noncovered codes (including dental), and a comparison to local Blue Cross Blue Shield rates where obtainable. Staff said they will present that comparison and a draft policy to the full board; staff cautioned that obtaining some payer fee schedules (for example, BCBS) can take time. The committee also confirmed a 30‑day public notice would be required under municipal policy before any fee increase is adopted.

The committee scheduled its next finance meeting for June 16 at 6:00 p.m. at Skagway City Hall. No formal fee changes or motions to change policy were approved at the meeting.

Ending

Committee members said they favored a simpler, defensible fee matrix tied to published Medicare rates, but emphasized the need to balance maximizing contracted payer reimbursement while not creating undue cost burdens for uninsured or out‑of‑network patients. Staff will return with the requested comparisons and a draft policy for the board to consider; any adopted fee change would include at least 30 days’ public notice.