Having a rate structure that accounts for all scenarios is essential to remain profitable long-term.
This page will give an overview of the basic rates you should be familiar with. Although you may not need to incorporate every rate below into your rate structure, you should be familiar with them.
Broker base rates for ambulatory transportation average $10 and mileage rates average $1.25 nationally, whereas broker base rates for wheelchair transportation average $22 and mileage rates average $1.75.
Please be aware that averages do not imply that negotiating will achieve higher than average rates. Rather, average rates are more-so affected by the amount of money the broker has been contracted to receive for managing transportation in a given region. Certain states dedicated more or less funds to certain areas based on an array of factors including Medicaid population size and program usage estimates.
Private Pay base rates for ambulatory transportation average $30 and mileage rates average $2.50 nationally, whereas Private Pay base rates for wheelchair transportation average $55 and mileage rates average $3.00
In private pay, averages tend to revolve around socio-economic and population density levels of certain areas. In addition, averages are partially dependent on industry type. For example, you may find that it is easier to increase private pay rates for dialysis centers who may pay out of pocket in comparison to urgent care centers who may refer your company to individuals who are not as well funded.
When contracting with a broker, they will send you a rate sheet to review and approve. Many providers are unaware that you can negotiate these rates, and this section serves as a general ‘best practices’ explanation for negotiating rates with brokers.
Firstly, always be aware that the broker ultimately has the last decision, on which rates will be finalized. If your rate negotiations are perceived as over the top, you may be starting off on the wrong foot with the broker. At the same time, don’t let that stop you from negotiating rates fairly!
Brokers will typically contract base rates, mileage rates, and included or ‘free’ miles. They will sometimes contract wait time rates, and rarely no-show prices. Lastly, if you own a shuttle bus, they will most likely want to contract group rates with you.
Generally speaking, mileage rates are more difficult to negotiate than base rates and ‘included/free’ miles. If you are rurally located, your focus should be negotiating mileage rates and nothing else. This is because the bulk of your revenue may come from longer distance trips, and because you can profit tremendously by only slight mileage rate increases on long distance trips, it is advised not to negotiate your base rate, and to counter your mileage rate considering the price difference of the length of trips you expect to be taking.
For providers in more condensed areas that are expected to receive 5-10 mile trips, it is advised to focus on negotiating your base rate more than your mileage rate. One rate that providers should try to negotiate is “free/included” miles. It is unlikely that your broker will offer mileage from “mile 0”. However, if they offer 5 miles free, you can safely counter offer only 2 or 3 miles free. Some will say that providers should argue for zero miles included, however in our experience, most brokers will never offer this and because of that, you may be perceived as less experienced and uninformed by counter-offering what brokers perceive to be ‘over the top’.