Incorporating a therapist into a private practice

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pike73

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I'm a solo practitioner moving my practice into new office space. I have always done every aspect of my psychiatry practice my myself but have decided with the new space to get an extra office for a possible therapist. I think that it makes sense to help with cases might involve more frequent sessions than I can provide and a service that patients expect. I have mainly seen the model where a psychiatrist would have a therapist be an independent contractor and would collect 30% of net profits from the therapist to account for the office space, office staff and billing. Does anyone have any experience with the model? Does anyone know of a better model? Any help would greatly be appreciated.
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30% is low. The cost of extra space, billing, scheduling, etc is worth more than that. I prefer to hire therapists as contractors. This model will appeal to therapists that are good and want incentives. Better therapy and communication improves retention.

Private practice with salary works if you are a high volume, lower reimbursement type of clinic. This population has limited therapy alternatives and will stay to use the insurance.
 
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pike73 said:
I'm a solo practitioner moving my practice into new office space. I have always done every aspect of my psychiatry practice my myself but have decided with the new space to get an extra office for a possible therapist. I think that it makes sense to help with cases might involve more frequent sessions than I can provide and a service that patients expect. I have mainly seen the model where a psychiatrist would have a therapist be an independent contractor and would collect 30% of net profits from the therapist to account for the office space, office staff and billing. Does anyone have any experience with the model? Does anyone know of a better model? Any help would greatly be appreciated.
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Wouldn't it be 30% of either the gross billing or the gross receipts? Net would be after their expenses which they shouldn't really have any if you are providing office space and clerical support. I think that the percentqge should also be dependent on level of qualification and skills. I would compensate a psychologist higher than I would a mid-level. Down the road I intend to hire or contract with either a psychiatrist or if I have to a PMHNP and the psychiatrist should get compensated about double in my mind. I also intend to hire a variety of therapists and pay would be determined by a variety of factors with a licensed psychologist getting the most generous package.
 
Thanks for the responses. Yes, it would be 30% of gross receipts and not net profits. I just can not see a therapist agreeing to more than 30% or some amount close to that. What is the highest anyone has seen? I like the idea of a therapist being an independent contractor- I would be wary of paying a salary to a provider where no-shows are so common. Also, it should easier to manage from a tax standpoint.
 
It depends on insurance vs cash practices.

Insurance based I'd charge 35% of gross revenue.

Cash is 45%-50% of gross.

The numbers seem high, but 45% still puts these therapists earning 95%ile or higher with a built in referral base of high paying clientele.
 
At the middle of the road OP practice where I work the therapists get 60% of the gross as employees with clerical support but no benefits. We could probably do hourly because we have a very low no show rate. Our patients are groomed to know if they consistently don't make appointments they will be fired and generally speaking they like this group and want to continue receiving services with us.
 
pike73 said:
Thanks for the responses. Yes, it would be 30% of gross receipts and not net profits. I just can not see a therapist agreeing to more than 30% or some amount close to that. What is the highest anyone has seen? I like the idea of a therapist being an independent contractor- I would be wary of paying a salary to a provider where no-shows are so common. Also, it should easier to manage from a tax standpoint.
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I've been offered full overhead in exchange for 45% of collections (insurance and cash) at an academic practice. I said no thanks!
 
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MamaPhD said:
I've been offered full overhead in exchange for 45% of collections (insurance and cash) at an academic practice. I said no thanks!
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Ugh! That is a pretty weak offer. Reminds me of the first offer I ever received as a licensed psychologist. I turned it down cold and they were shocked because they said it was such a generous compensation package. In their minds I guess 48k per year was generous. lol
 
Further thought - if you want to recruit and retain good therapists, one is to charge about 25% for OH on collections (which is reasonable and far less than other localities) but also letting them know that if they don't meet muster on quality, that they will be finding a new office to work in.
 
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Shikima said:
Further thought - if you want to recruit and retain good therapists, one is to charge about 25% for OH on collections (which is reasonable and far less than other localities) but also letting them know that if they don't meet muster on quality, that they will be finding a new office to work in.
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I do the same and charge 45%. The number would be less for doctorate level psychologists, but masters level therapists are pretty common in my area. 55% at the rate I charge patients still puts masters level therapists at the top percentage in pay in my region.

A good rate really depends on region, payor mix, and collected amounts.
 
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TexasPhysician said:
I do the same and charge 45%. The number would be less for doctorate level psychologists, but masters level therapists are pretty common in my area. 55% at the rate I charge patients still puts masters level therapists at the top percentage in pay in my region.

A good rate really depends on region, payor mix, and collected amounts.
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Quite right. Recruitment and retention of good therapists is much needed, and the flexibility with percentages to recruit good talent is necessary.
 
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Any of you guys know a good method of finding the number and location of psychiatrists in a particular city ? Or therapists in a particular city? Does every city have some sort of list of incorporated practices, which I would guess would constitute the majority of private practices?

I'm trying to figure out a good way of mapping these out to see where the competition is highest in certain parts of a city where I may want to open up shop.
 
there is no good way to do this I don't think there is app for this but it would a great idea for one! psychology today is a good starting point. the APA has a directory but not all psychiatrists are APA members and most psychiatrists aren't on there. the local psychoanalytic institute and state psychiatric association will also have directories
 
PistolPete said:
Any of you guys know a good method of finding the number and location of psychiatrists in a particular city ? Or therapists in a particular city? Does every city have some sort of list of incorporated practices, which I would guess would constitute the majority of private practices?

I'm trying to figure out a good way of mapping these out to see where the competition is highest in certain parts of a city where I may want to open up shop.
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You cannot know what location will have "good psychiatrists" practicing. It's all pot luck and as you develop relationships, you'll know who's good and bad.
 
What "kind" of therapist are you looking to hire? Msw, mft, doctoral level?
 
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