How to Set a Standard Fee Schedule for Your Practice


Physicians have the complete authority and responsibility to set their own standard prices.

Although your standard fees are not necessarily the amount you'll receive from third-party payers, they are the amounts you should list in the charge field for claims you file, with few exceptions.

Set your fees with consideration for basic business principles, including profit, return on investment, competition, and marketing. Note that third-party payers commonly will pay the lesser of your billed charge (your standard fee) or their allowable amount. Consider that fact, also, in setting your standard fees. 

Antitrust laws and rules, and TMA Bylaws prohibit TMA from setting fees or providing information that might tend toward fee-setting. However, below is some information that might help you set your own fees.

These firms (among others) provide information about average physician charges, sometimes with customization for geographic location and/or specialty:

After analyzing your own cost and collections data and/or studying the available data on prevailing charges, you might want to set an entire fee schedule based on Medicare's relative value units (RVUs) and a conversion factor or factors you choose for your practice. Some practices will use two or more different conversion factors for different groups of procedure codes. You can calculate a conversion factor from any fee by dividing the fee by the total RVUs for that CPT (or HCPCS) code. Note that Medicare's conversion factor for 2016 is approximately $35.83.

If you've decided on a conversion factor or factors, the easy way to set fees is to multiply a conversion factor by the relevant RVUs for each CPT code. If your office software doesn't include this information, you can download a file from the Centers for Medicare & Medicaid Services that includes all the RVUs.

Alternatively, you can purchase various products — some from the vendors listed above  that come preloaded with RVU data to help you with these calculations.

Have questions? Contact the TMA Knowledge Center at (800) 880-7955 or knowledge[at]texmed[dot]org to talk to a health policy expert. Or if you need help analyzing your business operations to arrive at a viable fee schedule, contact TMA Practice Consulting for an in-depth assessment.

Published Sept. 13, 2016



Last Updated On

September 13, 2016

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