Creating a Fee Schedule for Your Private Practice
Some providers are following outdated or unreliable fee schedules and losing revenue as a result. Others simply haven’t bothered to read up on how to create a profitable fee schedule that’s also fair for patients. When it comes to building a strong practice, a consistent, reasonable fee schedule is a must-have. If practices charge too much, patients might go elsewhere when they have to self-pay. Insurance companies might deny claims or only pay partial approvals if fee schedules aren’t accurate, so that’s another concern.
In creating a fee schedule for your private practice, there are several things to keep in mind.
What Is a Fee Schedule?
A fee schedule is not a static document or database that assigns charges to services or procedures randomly. It is not a tool used to validate what is a “reasonable” payment. It is also not something that should be set in stone because today’s healthcare industry requires a level of flexibility for patients who may not have the means to pay for the care they truly need.
If you do it right, your fee schedule becomes a tool that helps define the value of your services. This schedule should be agile and able to change with the needs of the practice and shouldn’t be exploitative in any way. Because of the increased need to control overhead costs and the balking of insurance providers, most private practices today have a fee schedule that is mostly based on what their insurance partners will reimburse.
Your fee schedule should cover not only the cost of insurance reimbursement but the true cost of each service or procedure. Even if every insurance claim gets paid at 100%, the profit margin is still minimal, at best. To truly clear revenue in a private practice, a fee schedule must include costs beyond what the insurance covers, in certain instances.
How Insurance Factors In
Speaking of insurance, essentially, providers can charge whatever they want for services. However, that doesn’t guarantee that they will be adequately reimbursed by insurance companies or that claims will be approved. Insurance companies have their own fee schedules and coverage amounts that they will consider when it comes to approving or denying claims. This will impact your own fee schedule in several ways.
Firstly, this could be a good starting point for setting your rates. See what is covered and at what amount. Do some research to find out what the “going rates” are for various services and procedures. Then, get to know the insurance providers you are working with and see what their maximums are for each type of service or coverage. That will help you set a reasonable fee schedule that doesn’t leave patients with a huge out-of-pocket expense.
As mentioned, this schedule can change and flex with time. At the same time, however, it needs to remain consistent and reliable. For example, a provider won’t suddenly double the cost of office visits when they haven’t raised the rates in two years—this would be too jarring. It’s also not a good idea to charge less for insurance-covered services and charge more for those services that go beyond insurance, or vice versa.
Be consistent in setting your fees. If you need additional help and insight, consider researching other private practice fee schedules. Don’t make sudden changes, either—let patients know well in advance if your fees are going to increase so that they can be prepared.
Consider Operating Expenses and Other Costs
Before you can determine how much you will charge, you need to know how much you are spending to operate your practice on a day-to-day basis. This includes everything from the payroll to the electricity and even the cost of the keys to lock up at the end of the night. In a medical practice, there are several different costs involved in daily operations, including rent or lease payments, advertising costs, payroll, insurance, and so forth.
It makes no sense to set a fee schedule that doesn’t cover your most basic expenses. Before you can profit, you must break even, and that comes in choosing the right fees based on what the practice costs to keep going. You can enlist the help of financial experts here to get a more accurate picture, but make sure that it’s on your list.
How ClinicMind Software Can Help
ClinicMind offers a total solution for practice management, including an EHR/RCM platform that delivers everything that you need to manage your billing, insurance payments, self-pay fees, and more. The platform offers an intuitive interface where providers can input all kinds of practice information, including their fee schedule, and keep it regularly updated. Plus, there are tools to assist with creating automated workflows, using AI to streamline compliance and accuracy, and more.
Keeping your fee schedule in the RCM platform will also ensure that everyone has access to it when patients ask, either in person or over the phone. Plus, the entire suite can be customized to create your perfect practice management tool, no matter what you have in mind.
It can be intimidating to be tasked with determining how much to charge people for your services. However, a little research can go a long way in helping you feel confident in the fee schedule that you set. In a private medical practice, there is a lot of responsibility that is put upon the practice owner. Fortunately, there are equally as many solutions to help alleviate these responsibilities and streamline operations, which is helping make things easier for all.
When setting fee schedules, it is important to be fair to patients, but also to the practice itself—otherwise, you might find yourself working for charity. Insurance companies may only pay a certain amount for services, but that doesn’t mean you can’t charge more if you need to. And of course, when you utilize an effective practice management platform like ClinicMind, you’ll have a centralized place to manage it all.