Setting Professional Fees for a New Business

As you prepare to establish your professional fee schedule for your new practice, you will find this can be a sensitive issue. No single formula exists for determining professional fees, and I cannot suggest what fees you should set. Every practice is unique and it is imperative that you consider your entire environment, including your private pay patients, insurers’ fee schedules and Medicare’s fees, and then establish fees that you believe reflect the value of each service in that environment.

Ultimately, you must be comfortable with what you’re charging your patients, and on the flip side, your patients must also be comfortable with your professional fees. Perceived value is key here. It’s important to compensate yourself fairly for your skills, your time and your services. It’s also just as important to educate your patients about the quality of services they receive as a patient in your practice. Spending time educating patients on value makes it easier to gain acceptance when presenting your fee schedule.

In this course we are talking specifically about clinic and medical professional fees. We won’t be discussing optical product or contact lens service fees. Although I cannot determine your fees, let me share a couple of philosophies and things to consider when establishing your fees. The first is to look at the Medicare Physician Fee Schedule. Most practices review the Medicare fee schedule when setting fees, since it is the United States' largest insurance payor and their fee schedule is readily available. Most other insurance companies follow Medicare's lead. If you have access to other insurance fee schedules, take a look at them, as well. Setting your fees at or above the Medicare Fee Schedule or other insurance plans allows you to maximize your reimbursements. This is a solid strategy for your medical CPT codes. For your comprehensive exam fees, I recommend that you have an understanding of what other practices in your area are charging. As a new practice, you want to get patients in your door, so you will need to be competitive on those “marketable” or “shopped” fees. You don’t need to be the lowest, and we don't want you to be, but you might not want to be the highest in town either. Spending some time “mystery shopping” your competitors will provide you with valuable information as you set your own fees. A review of fees in your area and a look at fees paid by insurance companies can provide extra data for you as you arrive at fees that you feel match the value of service.

However, you set your fees they need to be consistent. You can only have one fee schedule, meaning the fees must all be the same for the same services and products, whether it’s a private pay, vision insurance plan, or Medicare. You cannot charge differently for different payors. You have signed a contractual agreement with insurance companies, and if you review your agreements, you will find that you agreed and signed that you will not charge more.

Another thing to consider are your contact lens professional fees. As I mentioned earlier, this is a different calculation and discussion, but the starting point for establishing those fees is your comprehensive exam fee.

Lastly, consider if you are planning to offer a discount to private pay patients. These are referred to as, “Same day pay savings” or “Time of service savings”. Please don’t use the words, “Cash Pay” as that can get you in a sticky conversation with an insurance company. In theory, you would also extend the savings to an insurance company if they were to pay you same day as the services were provided, so technically everyone has the opportunity to get that same savings.

A few things to consider if you plan to offer this savings to your private pay patients:

  • 1.Think about the fee that you want to end up with
  • 2.The discount should be no more than 20% off your usual and customary
  • 3.Do not use the term, “Cash Pay”. Role play with your team so everyone is comfortable with the right scripts

Although it may be early on in your start-up practice phase, you should begin to work on establishing your fee schedule sooner than later. If you are credentialing with VSP, one of the first things they will ask you to complete is a worksheet with a short list of your proposed fees. So, get it done!

You can download the Medicare Fee Schedule on the CMS website, but we will make it easy for you to get started, and here’s Michele to explain our process for completing the fee analysis using the most current CMS schedule.

Thank you Sheila. It’s really very simple! We will send you the Fee Analysis Worksheet and you add the usual & customary (UC) fees you are CURRENTLY charging. If you are a new start up practice, enter your proposed fees. These do not need to be set in stone, but rather will give us a starting point. Send it back to us and we’ll do the rest!

Based on your Mac Locality, we will use the CMS website to obtain the non-facility price. Your mac locality may be your state; like Nebraska or a specific region or county in larger, more dense populations.

Once we fill in the non-facility price, we will format a report with the information you provided, your fees compared to the mac locality, the national Medicare Fee Schedule (MFS) and your fees compared to Medicare’s fee schedule.

Your coach will then be happy to review the results and make suggestions to improve your UC fees. Let us take the guess-work out of it!

Thank you for joining us!