Setting Your Prices for Each CPT Code
With the implementation of the 3 new physical therapy evaluation codes and 3 new occupational therapy evaluation codes for dates of service on and after January 1, 2017, I am receiving many questions on how to price the new evaluation codes as well as should I price them differently.
To determine your price for each evaluation CPT code, you need to determine the cost to provide that service. Costs would include, but are not limited to,
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This doesn’t address the “should”….why would we charge differently if there is currently no change to the payment between the codes? – just information gathering at this point. I don’t think the change in description of what is happening means that therapists are delivering services any differently than they have been.
I agree that the evaluations we are doing now are not different than prior to January 1, 2017; however, we should have always had more than one evaluation code to better describe the complexity of the patient we evaluated and should have charged and been paid different based on the complexity. There are also some insurance carriers that are paying different payment amounts for the evaluation codes; hence, you want to price them differently based on your cost and adding in a profit margin. For the rest that are paying the same for all 3 evaluation codes doesn’t mean we should price them the same since the cost to perform a high complexity evaluation are greater than a moderate complexity evaluation which is greater than a low complexity evaluation. We need to be proactive and not reactive once payers decide to pay the codes differently.
We have our hard costs such as; monthly rent, utilities, malpractice insurance, admin staff wages, avg cost to process claim and therapist wages and we also know what we want our profit margin to be. The problem we face is how to divide our monthly hard costs to calculate a per patient cost to ultimately decide on the correct price per CPT? Do we divide the total expenses by the # of hours in a month (or total hours of operation)? Is there an Excel formula you have that you could share?
This has been a question we have had before and how and why we price our services.
Thank you!
The simplest way to calculate your cost per visit is to take your expenses for the month and divide by the number of patient visits that month. By doing this every month, you will have consistent data.
Hi Rick,
is there a general rule/benchmark to use when setting the price per code (not just for eval but others too)? i.e. 2x or 3x the CMS/Medicare allowed amount. Thanks in advance for your advice.
Check out my January 23, 2017 article on this topic.
http://gawendaseminars.com/2017/current-news-posts/setting-your-prices-for-each-cpt-code/