How to Raise Your Group Practice Rates

The beginning of the year is a great time for practice owners to refresh their business policies and procedures. It’s an opportunity to review and update operation and employee manuals, enact new policies, and let go old policies that didn’t work for the business. It’s also when many practice owners review their rates.

Current inflation rates in the US are just over 2%, with historical yearly inflation averages just under 3.5%. Commercial rent typically increases on average between 2–4% a year. Services group practice owners use to run their businesses typically increase their rates each year as well, meaning that if group practices don’t increase their rates each year, the consequence is reduced profits.

Raising our rates is inevitable, so how do we do this in a way that limits the burden on clients?

Establish a System for Increasing Rates

When clients can anticipate rate increases, it decreases their own frustration. One example is increasing rates every January 1. Everyone expects changes at the start of a new year, and clients may be more likely to accept the increase at this time of year. Benefits reset and insurances change, so it’s not a far stretch for their therapy rates to change at that time as well.

Have it on Paper

Identifying rate increases in your client paperwork is a great way for clients to know what to expect ahead of time—plus, you can refer to it later. For example, you can state that rate changes happen every January 1 at an increase of $5 per year.

Make Increases Consistent

Many practices wait years before raising their rates, then increase by $20 or more. A jump that significant can be a hard pill to swallow for many clients. Typically, maintaining smaller yearly increases is easier for clients to manage. Many practices will increase rates by about $5 per year.

Notify Clients Early

Approximately a month before your rate increase goes into effect, make sure you notify your clients. To make this simple, create a notice template that you can print out each year and leave in the waiting room of your office about one month before the rate increase goes into effect in addition to reminding your clients when they come in for their sessions.