One of the most common questions that my team and I receive is “What should I charge?” While this decision in practice shouldn’t be so complicated, it really is. It is impossible to give any provider an answer for many reasons. The Sherman Anti-Trust Act is one, which is why I tell anyone asking me this question, that I can’t give them an answer, but I can direct them to the resources to help them make the right decision for their practice.
First and foremost, you need to know your cost of doing business. According to a national survey a few years back, overhead in a typical chiropractic practice can average 50%. I would be surprised if that average hasn’t increased considering the increased cost of addressing compliance mandates, rising overhead and lower reimbursement models. To calculate your average cost of providing an office visit and the percentage of overhead, use this simple calculator. This number is key to knowing your bottom dollar for maintaining profitability in your practice. While this is not as exact as a formal Profit and Loss Statement, it will give you a great ballpark idea of your costs.
Next, you need to determine the average price for services offered in your area. The Sherman Anti-Trust act prevents you from reaching out to colleagues in your community and asking what they charge, as this can be seen as price fixing. There are multiple ways you can gather this information, however. You can hire a consultant to collect this information for you or utilize websites such as ChiroCode.com or fairhealthconsumer.org which calculate fees in your zip code.
Finally, start a spreadsheet and list every code that you use in your practice. Then list the reimbursement rates for each code from Medicare, in-network and out of network insurance companies. Next, add the information you gathered on average fees based on your zip code. Start by comparing the averages in your area to the existing fees in your practice. Are you above or below the average? Then, using your actual fees, determine what you are currently charging per visit, on average. Are you falling above or below your cost per visit? Finally, you will want to compare your cost per visit to your reimbursement rates with provider agreements. Do you have any contracts that pay you less than your cost per visit?
Now that you have all of this information in front of you, what’s next? This is a great time to determine if you need to make any adjustments to your existing fees. Even a small change of $5 per visit, can have a significant financial impact on your practice. Just $5 more per visit is the equivalent of getting paid for 13 months, while still working 12. If you have any provider contracts that are not meeting your desired cost per visit, reach out to negotiate your agreement. If they are unwilling to negotiate, it may be time to cancel.
If raising your fees gives you heartburn, and you have concerns that doing so will run off your patients with limited benefits, high deductibles, or no insurance at all, then consider using a Discount Medical Plan Organization, like ChiroHealthUSA. Providers who offer these types of memberships to their patients give their patients the same kinds of discounts that insurance carriers have negotiated for those same services. Many times, the discounts to patients are the same, or lower than the co-pays they are accustomed to paying for their treatment with robust insurance plans. Having a contractual network agreement with a DMPO is what makes the discounts you offer, legal and compliant. This is a simple way to offer your patients an affordable option for care in your practice.
This fee analysis may take a little time, but I challenge you to sit down and evaluate your fees. It will give you an opportunity to see where you could be losing money and correct those areas of concern to become more profitable in 2019.