Audiology Fee Schedules: What We Can Learn from the Medicare Database

By Barry A. Freeman and Ian M. Windmill

This article is a part of the January/February 2021, Volume 33, Number 1, Audiology Today issue.

Pricing Thoughts Overview

• How do you set your fees?
• How much is too much and how much is not enough?

For diagnostics, some audiologists may look at the fee schedule provided by third parties such as Medicare and wonder if those fees should be the fees for all patients.

For products, audiologists may use manufacturers’ suggested retail pricing to determine how much should be charged.

Yet neither of these approaches seem to make financial sense. They are a little like asking your grandparents what they paid for a new home or a loaf of bread in 1970 and using that as a marker when shopping today.

If, for example, Medicare reimburses $39.00 for a comprehensive audiologic evaluation (current procedural terminology or CPT 92557), is that really sufficient to cover the costs associated with providing the services, including the overhead for equipment, rent for the office space, and supplies?

In the same manner, when setting a price for hearing aids, will a set multiple such as 2–3 times the purchase price cover the costs and profit goals for a practice in Los Angeles or Manhattan in the same manner that it will in Clarksville, Tennessee, or Louisville, Kentucky?

“The single most important decision in evaluating a business is pricing power,” Warren Buffett once said (Frye and Campbell, 2011).

The literature on management is filled with approaches to setting prices (Traynor, 2019; Robinson, 2015; Bloomenthal, 2019).