Below are 6 methods for establishing your practice fees. Each has its advantages and disadvantages.  To help you decide what you should charge for specific services, print the fee schedule worksheet.  When you have completed all six methods, an analysis will help guide you to the correct fee schedule for your practice.  Keep in mind that the fee schedule you use is dependent on many factors and may very well change when you move your office or add additional personnel, etc.

1. Guess

Advantage: You may be on target and happy with what your ask and get paid.

Disadvantage: You may be too high or low for your area.

2. Workers' Compensation Fee Schedule

Advantage: It puts you in the 70th statistical percentile for the state

Disadvantage: Your state may not pay for these services or not include you in work comp. It may be too high or too low for the area.

3. What Insurance Companies Pay for the Service

Advantage: It is supposed to reflect the Usual Customary and Reasonable Fees in  area.

Disadvantage: This is supposed to be an average in your area but many times the insurance company pays what they want regardless of the average in the area.

Note: Contact a mentor in the area who is willing to share the insurance company's Explanation of Benefits (EOB) with you.  Use an average of the companies EOB's.

4. Cost Per Patient visit (CPPv)

Advantage: It establishes the lowest fee you can accept without going out of business.

Disadvantage: It may not represent the highest fee schedule the market is willing to pay.

Note: The CPPv will be a combination of several therapies on the office visit. Go to the Practice Calculator to compute your CPPv.

5. What Other Providers are Charging in the Area

Note: This is within a 5 mile radius around your practice. Try to get 10 office fee schedules.

Advantage: It gives you an average of what the market is currently paying.

Disadvantage: It may not reflect what the market is willing to pay.

6. What the Market is Willing to Pay

Advantage: This is the truest meter of the value the market places in your worth. If the market is willing to pay a million dollars for your service, then get it.

Disadvantage: It is difficult to determine what the market is willing to pay. Moving the fee schedule too much cause a lack of consistency for patients.

The ANALYSIS

Use the Cost Per Patient visit (CPPv) (Method #4) as the bottom number. Do not go below this or you will be out of business soon. Then look at what the others are charging in the area (Method #2) and the workers compensation fee schedule (Method #5). See how close you are to the guess you made (Method #1) and what the Insurance companies are paying (Method #3). Finally, what is the public willing to pay (Method #6).  Now make your choice.