Dr. Sharp: Hello, everyone. Welcome to The Testing Psychologist podcast, the podcast where we talk all about the business and practice of psychological and neuropsychological assessment. I’m your host, Dr. Jeremy Sharp, licensed psychologist, group practice owner, and private practice coach.
This episode is brought to you by PAR. PAR has recently released the Feifer Assessment of Childhood Trauma or the FACT, the first and only comprehensive instrument measuring how stress and trauma can impact children in a school-based setting. You can learn more or purchase the FACT teacher form by visiting parinc.com\fact_teacher.
All right, y’all. Hey, welcome back to Holiday Hopes number four. If you have not tuned in to the previous Holiday Hopes episodes, Holiday Hopes is a seven-part series on business practices to help you [00:01:00] make some changes in the new year and get your practice in a hopefully better place. So these are seven short episodes where I’m tackling one business topic really just as a means to send you in the right direction, just gently push you in the right direction to make some of those changes you may have been thinking about over the course of the year or multiple years. And the new year is always a good time to make some changes.
Before we jump to the episode, which is going to cover rates, so raising rates and negotiating rates with insurance companies, I want to invite any of you advanced practice owners to reach out. The next cohort of the advanced practice mastermind is starting in late January. It looks like as of now, there are three spots filled. So we’ve got three spots left.[00:02:00] The advanced practice group, as time has gone on, has really focused in on group practice owners who are managing employment concerns, growth, streamlining, finances, all those sorts of issues that come from running a practice with multiple employees. So stepping back, stop trading time for money, that sort of thing. If you are in that group and you would like some group coaching and accountability to help move your practice forward, I would love to help you out. You can go to thetestingpsychologist.com/advanced and book a pre-group call to see if it’s a good fit.
All right. Let’s talk about rates.
All right. So again, Holiday Hopes episodes are short and sweet. I’m not going to belabor any points here. This is really just meant as a time to listen and consider some changes to make in your practice and hopefully use this as one more little step in the right direction or reminder for yourself.
So, I’m talking about rates today. It’s pretty straightforward. I’m really just bringing it to your conscious awareness that we theoretically should be raising our rates at least every other year. I think we should probably be raising our rates every year. Now, if you take insurance, that can be a more difficult process, of course, because you can’t just [00:04:00] unilaterally decide to raise your rates. And that is totally fine. So we’re going to talk about raising rates in private pay practices and negotiating raises with insurance companies.
First of all, just making that decision to raise your rates can be difficult, right? However, I think of it in just pure economic terms. If you are a business in the United States, the cost of living is going up, right? Inflation, I guess, is what it’s called. That’s what I hear on the news and in the blogs. So inflation. So just raising your rates to account for inflation is important. What’s the standard rate of inflation? About 2.5%. So, just to keep up with [00:05:00] cost of living and things like that, especially lately, raising your rates is important just to keep pace with the market.
Now, I’m not an economist. This might be a terrible practice from an economic perspective, the macro level, but raising your rates to keep pace with the cost of living is at its basic level, important. So that’s one place to start. But also if you have employees and especially if you’re private pay, this is not just about you, it’s about being able to offer higher rates to your employees and even your assistants. It really cuts across all levels of your practice. So, seriously consider raising your rates. It’s not just about you.
What I have noticed as well is that test publishers are raising their own rates. What [00:06:00] started out a few years ago when we were doing online rating forms as $1 or $2 per form and per score report now is creeping upward to $3 and $4. So, prices increase.
So there are plenty of reasons to raise your rates. Couple that with the fact that most new graduates coming out these days are setting their rates higher and higher. And at least in our area, we have found that practitioners continue to raise their rate. So you also have to consider where you fall in the market and make sure that you don’t fall too far below the median or mean as far as rates and out-of-pocket costs. So all good reasons to think about raising your rates.
So how do you do that in private pay?
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All right, let’s get back to the podcast.
Well, doing it in a private pay practice is much easier than insurance. And doing it at the beginning of the year also makes sense. It’s a natural break. [00:08:00] It’s a time when people are thinking about resetting and doing things differently.
So what you can do is generate a letter. For those of you who have existing clients, maybe some of you are seeing current therapy clients or ongoing appointments, you can create a letter that just says, “Hello, I’ve enjoyed our work together. Just sending a notice to all of my current clients that I will be raising my rates by X percent or X dollar amount starting whatever date, January 1st, February 1st, whatever it might be.” And that’s it. You send a letter and just let them know.
Usually, we’re not talking about a huge increase. If you’re raising your rates every year, I think I would do at least a 2% increase, but 5% is pretty standard across our industry. So it’s not going to make a huge difference [00:09:00] for most people, but it’s important to communicate that.
For those of you who are booked out for a number of months, this can be a little more challenging. What you want to do though is just have integrity with whatever you have communicated with the client so far. So if your client signed on for an evaluation, assuming that they were going to pay whatever amount, I don’t think it’s cool to change that. Some of you may disagree. That’s totally okay.
I think if you were booked six months out, you could certainly send a letter to those folks or an email to those folks and say, just a heads up that has of whatever date I will be raising my rates. I know that you pursued this evaluation under the understanding of a different rate. [00:10:00] And I understand if you would like to cancel your appointment, whatever it might be. Chances are, so if you’re a private pay practice and you increase by 5%, it’s not going to be a deal-breaker for most folks, but I think it is important to have integrity in that process.
If you’d rather not do that, then you can just pick a date a little further out and say, maybe you raise your rates for any appointments booked after June 1st, let’s say, or maybe you wait till January 1st of the following year, 2023.
Now, as far as raising rates with insurance companies, this is a little more challenging. I did a large portion of a podcast dedicated to raising your rates with insurance companies. So I’m not going to get back in the weeds with that, but it is doable. I would encourage you to work that into your administrative workflow, [00:11:00] either for a true administrative assistant or billing specialist or to put it on your own plate to do this once a year, where you update your templated letters which I provide in the other podcast episode, there’s a template letter to request a raise from insurance panels. And I just make this a matter, of course, once a year to send in this letter and ask for a raise.
Now, you may have to be a little more compelling with your rationale and do a little more research to justify this rate increase. So just know that. They’re not going to just give it to you. You may get turned down. You will likely get turned down by most insurance panels, but my experience has been that we will get a raise from insurance from at least one panel every 2 to 3 years. So it [00:12:00] can work. Don’t lose hope. But this is a good time to sit down and update those letters or generate those letters and send them to your provider representatives for each of the panels that you are paneled with.
Now, I’ve also had good luck. We take a lot of Medicaid in our practice, and some people say that Medicaid is a little bit of a monolith that’s hard to break through and have any influence on, but we have also had a little bit of success, maybe not getting raises for Medicaid, but negotiating for more hours because of the types of evaluations we do, or finding other concessions, getting certain CPT codes added to the fee schedule that just weren’t on there as a matter of practice. So you may be able to get concessions in other ways if they’re not able to do a rate increase. So [00:13:00] take away from that, it is doable, and don’t be discouraged if you get turned down the first time or two that you asked. You got to just keep at it.
So again, think about raising your rates. I think you can raise the more depending on the amount of time since the last raise. If you’re doing it yearly, I think 5% is very reasonable. If you haven’t done it for gosh, 5 years, 8 years, 10 years, then take a really good look at the market rates around you and make sure you are competitive with those.
Like I said at the beginning, if you are a group practice owner with employees, you’re doing testing in your practice, and you’re looking for some support and accountability as you level up your practice, whatever that might look like, you can check out The Testing Psychologist Advanced Practice Mastermind Group. You can go [00:14:00] to thetestingpsychologist.com/advanced. The next cohort is starting in late January. I think there are three spots left and I’d love to talk with you. So set up a pre-group call. We’ll chat, see if it’s a good fit, and go from there.
All right. Y’all take care. We are marching toward the holidays. I hope this has given you some things to think about as we get closer. All right. Until next time.
The information contained in this podcast and on The Testing Psychologist website is intended for informational and educational purposes only. Nothing in this podcast or on the website is intended to be a substitute for [00:15:00] professional, psychological, psychiatric, or medical advice, diagnosis, or treatment.
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