Setting fees for billing insurance companies for massage therapy has long been a very controversial topic for me personally. Whenever you ask a massage therapist how they set their rates for billing insurance, you will get as many different answers as there are massage therapists.
Over the years I have struggled with how massage therapists can get away with charging very high prices -like over $130 for an hour massage especially when they only charge their cash clients $60 an hour.
In the insurance world there is something called a “Usual and Customary and Reasonable” fees that are calculated in a very complicated way. They calculate what various locations around the US are paying for specific codes.
There are two sides to this. Just because there is something called an UCR fee, it does not mean you should be or can be charging it. When you charge different rates for the same service to different people or insurance companies it is considered to be insurance fraud.
Now many massage therapists over the many years I have been in this business have all sorts of reasons why they think they should charge more:
- It takes more time to do the paperwork to bill insurance.
- It takes more time to get paid – like 2 weeks to 3 years.
- Other health care providers are doing it.
- They are doing something called ‘Medical Massage’ which is different and requires more skills and training and is different than what they do with people who come in and pay cash.
- They provide a cash discount for people who do pay cash (checks or credit cards) at the time of service.
A few years ago, I took a workshop put on by the two Attorneys that AMTA -WA has hired to help look at insurance billing and other legal issues. Basically what they said was that it is illegal to charge different rates and that the extra time involved is just considered to be part of doing business. The bottom line was whatever way you want to explain it, you better be able to prove it in court. Personally, I do not know how one can explain that if a person came in with pain or stress (which who does not have that these days) that you did something different on them than you do with insurance clients. (See The Business side of Caring (PDF) Pieck Law Group )
Diana Thompson has also said that you can charge a fee that you would have to pay an insurance billing company to do the billing. So if you are charging a cash rate of like $65 an hour and a billing company would charge you $20 to do the billing you can then charge the insurance company $85. She also says in her book ” Hands Heal”
It is illegal to charge different rates for the same service to different people and different organizations. It is appropriate to charge different fees for different services or to offer reasonable discounts for payment on the day of service as long as the discount is offered to all patients equally. For example, if a patient pays cash but is submitting the bill to insurance for reimbursement, he or she must be offered the same discount at the time of service that any other patient would be offered. Acceptable discounts range between 5% and 15% depending on state regulations.
The practice of overbilling for massage services is also being scrutinized currently in the Florida Legislature with SB 1860 which is threatening to stop massage therapists and acupuncturists from being able to bill for car accidents. ( See article on this.) The proposed law was created as a result of there being a significant increase in the amount of massage therapy fees paid out according to the article I just linked to.
Negron carved out massage therapy because of rising per-claim costs and what he called “overutilization.”
He points to figures that indicate the average charges per massage therapy claimant have increased from $2,887 in 2005 to $4,350 in 2010.
Vivian Madison Mahoney has also talked about this extensively in many of her articles on Massage Today. See her article Fees (Oct 2002)
So setting your fees for massage for when you bill insurance needs to consider the legal aspects as well as what you need to make to be successful. Setting fees is a complex calculation that only you can make based on what YOU need to make for the time spent doing massage, your skills and level of education, what the market will bear and what people will pay.
Learn more about how to bill for insurance and get paid in my book Insurance Billing 101 for Massage Therapists.