How to Calculate a Physcian's Fee Schedule

In any industry, a carefully planned and executed financial strategy is necessary for the success of a business. A physician's practice is no exception. It is easy to let insurance carriers set the price for services and procedures on a case-by-case basis, but having a fee schedule will help a practice to thrive. By accounting for the actual cost involved in the services, as well as the rate for the time and expertise provided by the physician, costs can be kept consistent from patient to patient. This will ensure a more uniform income for the practice.

Instructions

• 1

  Evaluate what the actual cost of each procedure is. Include the materials that were used, the amount paid to the assisting staff and any lab costs that may be involved. Having a base expense for each procedure is a big step in having a consistent fee schedule. Remember to keep the practice's overhead in mind. Rent, utilities, cost of support staff and marketing materials add up. If these items are not considered in the base cost of your procedures, they will come out of your take-home pay. Take the time to include every expense involved in running your practice.

• 2

  Place a value on your time. Your knowledge and care is quite valuable to your patients and should be compensated for. You can set a fixed amount on an hourly basis and apply it to procedures in that way. A 20-minute procedure will be a third of your hourly rate, in addition to the actual cost. To determine your hourly rate, decide what your take home pay should be. Divide this annual amount by the number of billable hours you have in a year. You can also talk to established physicians in your field and who practice in the same community. A physician that has been in practice for some time will have a good idea of what a reasonable hourly rate in your area is. Your ideal annual salary might be too small or too large compared to what your peers are making.

• 3

  Utilize the resources available for physicians looking to create a fee schedule for their practice. The American Medical Association provides templates for fee schedules to its members. It also recommends using the Resource-Based Relative Value Scale created by the Centers for Medicare and Medicaid. This annually updated scale can be used as a reference when determining costs for your practice. The RBRVS is available through the AMA.