Determining a Fee

Written by admin@pcpierce.com on April 2, 2011. Posted in Contracts

Some Things to Consider:

Cost vs. Value

Time…

  • Spent performing activities
  • Spent traveling to and from location
  • Spent with continuing education, training and professional growth.
  • Allocated to administrative activities (billing, scheduling, misc. like buying supplies, promoting the business, etc)
  • Vacation – time off 

Specialty, Effort, Circumstances…

  • Less desirable work costs more (QI, tedious regulation compliance).
  • In a bind (s/p regulatory non-compliance).
  • Personal preference.
  • Number of hours contracted (fewer hours more cost, more hours less cost per hour)
  • Advanced training and certification or expertise more cost.
  • More travel more cost (fog, auto expense, fatigue, etc).

How to Determine a Fee

Rule-of-Thirds: A fair rate may be triple the standard hourly wage for the work you do.  One third goes for the hourly rate, one third earmarked for expenses and one third covers administrative costs. Find out more

Contracting for Nutrition Counseling

Some contractors work on a set hourly fee for nutrition counseling. Whether they see four patients per hour or one patient in eight hours they still get paid the same. If a contractor is reimbursed for each patient they see, a different reimbursement structure should be in place. There should be a minimum amount paid to the contractor for each nutrition consult, whether initial or follow-up.

For those interested in doing counseling in their own office or other setting, a fee for service should be fair to both the contractor and the contracting referral agency.

Any amount paid to a contracting agency from the insurance company or private pay should not exceed 30% more than what the independent contractor makes in reimbursement. The contractor should make no less than 70% of the total amount.

Example: If the agency receives $140 for an initial evaluation from insurance, then the contractor would be reimbursed $98.

A 30% markup should be more than adequate to cover any expenses incurred on the agency and still provide for sufficient profit.