112: Setting Chiropractic Fees

i everybody. Welcome to the KC CHIROpulse podcast. Today we are talking about setting fees. So welcome to the KC CHIROpulse podcast. I'm Dr. Michael Perusiich. I'm your host, and I'm joined by my guest host, Dr. Troy Fox. Hello, Dr. Troy Well, hello. We're talking about a juicy topic today. Juicy topic. Yeah. Setting your fees. You know, this is kind of an interesting subject. It's not something that, uh, we see too much about, I don't think in mm-hmm. in the profession, as if it was kind of an arbitrary thing to just sit down and say, well, you know, I want to get paid this much for an adjustment, so I'm gonna set my fee there. There's actually a little bit more science to it than just that. . Oh yeah, for sure. Yeah. So, you know, you've, you've got a number one, buy a codebook. Buy a Codebook every year. You should, you should buy a Codebook. I'm amazed at how many doctors don't buy a Codebook. Mm-hmm. . You gotta have the Codebook. And in that Codebook is, For each service in there. For each C P T code, there is an R V U listed and that R V U is the relative value unit, and that gives you an idea of where pricing should be set. So really when it comes down to it, your, your reimbursed fees from insurance and so forth, it's kind of set by the insurance industry. So you wanna make sure that you're within the guidelines of those RVUs. , but we don't just have insurance patients in our practices. Right, right. We also have another kind of patient called a… drum roll please… Cash patient. Yeah. Which everybody wants more and more of. So we've gotta make sure that we set our fees in a position that will attract those cash patients into the clinic. And you know, many years ago we used to, and we all did this, we set our fees based on. , what was our highest paying Reimburser. Mm-hmm. . And that was typically or it might have been Blue Cross. So we set our fees pretty high cuz we didn't really worry about our cash patients, because there really weren't that many. And those that came in and were paying cash, they obviously wanted to or needed to and, and didn't really think much about paying a little bit higher fee. But today you've. , I mean, literally almost everybody in my opinion is, it is cash, at least at some point, number one. Deductibles are huge. Yeah. I don't know about you, Troy, but I've got a $10,000 deductible. So going into the chiropractor, I'm never gonna meet my deductible, so I'm, I'm a cash patient. Plus we have, we have, uh, you know, this, this newer thing, it's not new, but newer called medical necessity. And what we've learned is that the wellness adjustment is not considered medically necessary. And so mm-hmm. , therefore not reimbursed by most insurers. Right. and that creates, you know, there's so many rabbit holes. We could go down tons on this topic because we hear all the time docs complaining about, well, this guy doesn't charge enough. This guy charges too much. You know, E, everybody's got their opinion on how you should charge, but you nailed it on the head. The RVUs really kind of Put it in place, and quite frankly, looking at our cash patients, we need to make sure that we are reasonable because if you end up with more and more of a cash practice, your overhead tends to go down and so right, your profit margin tends to go up, even though you're maybe billing a little bit less for that same treatment. And that's really when you run a practice. The bottom line is, what am I making? Not what am I, what am I billing for? An adjustment. . Right. And I think that's something that sometimes we lose sight of when we set our fees. You know, we get all excited that we're on Blue Cross, for example, or, or a PI case is gonna pay us big bucks for an adjustment seven years from now. And we get all excited about making that big, that big bank for those services. Right. And we lose sight of the fact that that's gonna price the cash patient out of the. . Yeah. You're pricing things based on just a few patients a year. Yeah. And maybe you have a bigger PI practice, but if you're just running an average practice, you're seeing, you know, a few PI cases here and there, it's not constant for you and you have a lot of cash patients and so all of a sudden you price them out of the market. Right. And especially in the economy that we're in right now, where people are kind of counting their pennies because, you know, eggs. Four or five bucks a dozen. So, you know, people are counting their pennies and if they still look at your service, which they should as a valuable service that they want to utilize, it needs to be within a price range that they go to. Because we've all looked at something, how many of us have seen something come across our Facebook page and it's, I, I saw one the other day. It was a thing that you see your stakes with. And I thought, oh, that'd be kind of cool to have outside. And then I looked at the price on it and. Yeah, I could probably see your steak in a cast iron skillet for a lot less. It just wasn't for me. It wasn't appealing when I looked at the price. Yeah. And I had an idea in my head when I opened it. If it were at this price, it might be reasonable and appealing, and so I think. Our cash patients do the same thing they have, and a lot of cash patients have a pretty good idea of what other chiropractors charge. They've got a family member, a friend or whatever. Sure. So they have, they have a pretty good feel for what chiropractors charge as well. So we need to be within that range. Sometimes we need to know what other folks in our area are charging as well, because demographically it matters. . Well, it does, and you should know what your competition's doing anyway, but it, does matter. And you know, if you're, if you're trying to figure out where to set your fees, I personally, I think the first place to look at is your write-offs. Are your write-offs really, really high? If so, your fees may be too high and you may be pushing the cash patient outta your practice. Mm-hmm. , or if your wellness visits are really, really, Then you may be pushing that wellness or cash-based patient out of the practice because your fees might be too high. So look at your, your fees relative to, yes, relative to your, your highest reimbursing insurance companies, but also be sensitive to the fact that you've got cash patients in the practice. And so, you know, even though. Let's say an insurance company pays you $60 for an exam. Is setting that fee at a hundred, is that a good idea? Well, mm-hmm. , maybe not because Right. You know, number one, you're gonna write off 40% of that, cuz. , the insurance company's only gonna pay you 60. Mm-hmm. . And you're not gonna get any more than that. And you're penalizing your cash patients at a hundred dollars. Cuz now they're paying 40% more than what the insurance patient is paying. So you gotta really work to find that balance. So somebody that's listening to this right now, speak to this for just a minute. We're talking about this, we're talking about setting a cash fee and we're talking about, okay, maybe your overhead is a little bit lower. How do we determine where that cash fee should be set? So for me, you know, my practice is mainly cash. And so for me, I may look at it a little bit differently or maybe I don't. So speak to that, just briefly. How, how if I came to you and I said, Hey Mike, I'm trying to figure out how to set my cash prices for my patients. How do I figure out what's reasonable for that and that I'm still making a profit off of, off of that patient? Yeah, it's a great question. There's really kind of a multifaceted answer to it. Number one, if you take insurance, you need to do an insurance reimbursement analysis and mm-hmm. , you know, the beginning of the year is a great time to do that cuz the fee schedules have just changed and so forth. So, you know, do a deep dive on your insurance reimbursement and, and, and analyze what you're actually getting paid. and analyze what the patient is actually out of pocket. I'm gonna tell you on, on some of the insurance companies, it's gonna shock you. I remember we did this one year and, and realized we were only getting $8 from an insurance company, $8 for a visit. I mean that, that's ridiculous. Why, why are we going to all the trouble of maintaining that plan and, and that that particular plan requested records all the time. You know, and so, they were very costly to be a provider for, and yet we weren't making any money, so we kicked that one to the curb. Yeah. You're probably burning $10 per pay per, per visit, just to try to keep up with it. Oh, for sure, for sure. Yeah. And so you gotta look at the reimbursement and do an analysis on that aspect. And then you also have to kind of have a field just for your general patients. What does it seem like your wellness patients, for example, Can you find the sweet spot? Where, where are they, you know, where are they comfortable? And I can tell you it's probably when you move a patient from insurance reimbursement into wellness and insurance is no longer covering them. , those patients that are staying in care are staying in care in part because where you have that fee set is pretty good. Mm-hmm. and it, the, the, the clue is, or the cue is it needs to be relative to what their out-of-pocket was with the insurance company. So, and there's, there's kind of this expansive, complicated formula to figure that out, but it at least puts it in your mind to start thinking about that. What, what are my patients paying out of pocket on both insurance when we're billing insurance and what are they paying out of pocket when we're not billing insurance? And that's kind of how you find that sweet spot in there. and think about if it were you, what, what would you be able to absorb and what would you be willing to absorb moving from insurance to cash? So put yourself in their shoes for a minute. Sure. And then once you're comfortable with it and you see that patients are comfortable with it as well, I talk to my patients a lot. I know what works for them. Yep. And so for me, I feel very comfortable making that wellness recommendation based off the fact that a majority of my patients are very comfortable with my pricing and they're very comfortable with understanding what it's gonna cost them, say for a year, a year's worth of care. If they came in once a month, once every three weeks, once every two weeks, whatever that wellness plan may look like, that they're comfortable with that as well. And kinda like we talked about right before the, uh, show. We talked a little bit about patients knowing what their cost is upfront. That's a very, that's huge. That's a very big thing. It's very important and, and really, quite frankly, the fact that we've been forced into giving a cost estimate to our cash patients actually is a benefit to us as chiropractors because it puts us in an absolutely position where it holds us to the fire to actually do that step. And our patients actually appreciate it. . Absolutely, totally agree with you. And, and there's kind of one last component with setting. Actually, I've got two things to say here, but number one, you've gotta make sure that you've got your fees set to where you're making a profit. So you have to understand your business expenses and what you have to make to cover that overhead. And put a nice profit in your pocket as well, unless of course you're a 501C3, which is probably 99.99999 9. Percent of the people listening are not. So you are a for-profit business, so make sure you're turning a profit. The last thing I want to say about setting fees and I, I see some people doing this and actually I, I see some websites and some, some docs on Facebook and, and social media putting this out there. And they're setting their fees based on age. So for example, I saw one the other day. A doctor posted on his website that, uh, if you're 65 years or older, it was $20 cheaper than if you were 55. . Mm. So you gotta be careful. You gotta be careful. That creates, creates all kinds of problems. Creates problems. Yeah. And we could go in depth in that, but I think you guys can figure that one out, that you're, you're running into a real enticement situation at that point. That's a whole nother podcast right there. And, and you're running into a dual fee schedule when you start changing things up like that. So, so yeah. Play the game. Right. Patients love chiropractic care. The pandemic proved to us that we've ticked up on the totem pole of healthcare. , you don't have to set your fees low, but you also don't wanna set them too high. Troy, any last thoughts? I would say that if you need help with this, cuz sometimes that's a bit overwhelming and some of us aren't numbers people, some of us are like, man, I just wanna see patients and I, want to make sure that I'm making money when I'm in practice, but I don't have the first clue as to how to figure out. Through all of my expenses and money coming in and out and all that, how do I, how do I figure out what it costs me to actually treat a patient in my practice? Yeah. Well that's what, that's where we come in, so that's what we do. If you're, if you're just kind of up in the air and you're like, you know what? I need somebody to figure this out for me to make sure that I'm not stubbing my own toe. That's where we come into play. And you can, you can jump on the Kat's website and send the upper right hand corner, correct. They can schedule a, uh, they can schedule a breakthrough call. . And here's the great thing about the breakthrough calls that I absolutely love. This is a no pressure deal. It's like, Hey, let us know about your practice. What have you got going on? You know, is there something we can do to help you? It's more of a discussion about where are you at, what do you need? Yeah. And it's kinda like when I go in with a patient for a report of findings, I want to tell 'em, here's what it costs, here's how long it's gonna take, and here's what our expectation of results may be with. and that's really kind of what that breakthrough call is. Yeah. It gives you a good clear cut picture of what we have to offer and what you may gain out of it. Yep. So go check us out at Katsconsultants.com and, I just want to thank our sponsor, Dr. Andrew Barlow at the Barlow Brain and Body, institute. Those guys are doing some amazing brain-based therapies over there. So if you've ever thought about adding brain-based therapies, go check them. Barlowbrainandbody.com. Awesome people. So, Troy, this is a great and lively conversation as always, on setting fees and, again, if you guys need help with anything like this, like Troy said, Katsconsultants.com, this is what we do. We help doctors run amazingly successful practices. All right, everybody. Thanks for tuning in to the KC CHIROpulse Podcast. We'll see you next time.