PhD/PsyD Private practice hourly rate

[Rainbowbright22]

Hi all,

Need some advice as I am new to private practice. I was previously working full time with benefits making 90k a year newly license. I relocated out of state and am looking for something part time with flexible scheduling. I thought private practice may be the answer. Basically this new job would be at a practice where I am not responsible for billing, marketing, overhead, etc. I will receive $40 for each billable hour. I also get paid this rate despite no shows. They accept both insurance and cash. I feel like this rate is low considering I will be spending time there for activities such as 1 hour of week group which I am not paid for. I hear there is typically a percentage split. What are your thoughts?

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[WisNeuro]

That rate would likely be a significant drop in pay for you over your previous position. Assuming a ~40 hour week.

 

[Sanman]

The details appear somewhat unclear here. $40 for what? Individual therapy, group therapy, initial eval? Are you an employee, contractor? Lots of variables here.

 

[Rainbowbright22]

My last position was 40 hours. This will be about 20 hours assuming about 16 are billable since I am not paid for lunch, group, etc. I will also be paying $15 an hour for childcare about 14 hours a week so I'm trying to decide if this reimbursement rate is even worth it compared to a stable salary where I am paid for notes and downtime. I am still paying for child care obviously when at the practice even if my time there is not billable.

 

[erg923]

why aren't you being paid for doing group therapy? That takes more effort and prep than an individual session or sure.

 

[WisNeuro]

Are you getting full benefits from this new position?

 

[Rainbowbright22]

The details appear somewhat unclear here. $40 for what? Individual therapy, group therapy, initial eval? Are you an employee, contractor? Lots of variables here.

I'm an employee. It's $40 per billable hour for any service provided (group, individual, testing, report writing)

 

[Rainbowbright22]

Are you getting full benefits from this new position?

No benefits

 

[WisNeuro]

I'm an employee. It's $40 per billable hour for any service provided (group, individual, testing, report writing)

The person you are working for is making out like a bandit for some of those billing codes.

 

[AcronymAllergy]

$40/hour sans benefits seems low to me, but I've never worked in private practice, so I'm not sure how that compares to other similar positions.

 

[WisNeuro]

$40/hour sans benefits seems low to me, but I've never worked in private practice, so I'm not sure how that compares to other similar positions.

$40/hour with benefits seems low to me for PP.

 

[Rainbowbright22]

The person you are working for is making out like a bandit for some of those billing codes.

This is the feeling I'm getting but wanted to ask you folks first.

 

[WisNeuro]

This is the feeling I'm getting but wanted to ask you folks first.

Check out the RVU/dollar comparison of the codes you would most likely be billing for to get a good idea of this. Additionally, what's the expected no-show rate? Could substantially eat into your billable hours.

 

[Rainbowbright22]

$40/hour sans benefits seems low to me, but I've never worked in private practice, so I'm not sure how that compares to other similar positions.

My experience has always been working salaried in a facility so this is all new to me. When I saw she is charging a patient $150 cash for an individual session and I am only making $40 of that...

 

[Therapist4Chnge]

As the PP I'd *love* to only be on the hook for $40/hr contract work, though as the contractor….that's a bad deal. Factor in day care time and you are getting a bit above post-doc level money.

 

[smalltownpsych]

Not very good. For my full-time gig I get more than twice that figure plus some benefits. I don't get paid for no shows though, but I do get paid the same rate regardless of what the company collects. I average about 30 billable hours a week which works out to about a 75% show rate since I book 40.

 

[PsyDr]

You're being scammed.


First: There is no way your are a contractor under IRS definitions. Unless they have the world's worst CPA, they have been informed about this behavior, and are engaging in it anyway.

Second: $40/hr *40hrs/wk *50 weeks/yr= $80k. less income tax so ~65k, less self employment tax/ssa contributions because you contribute both sides as a contractor, less state income tax if applicable

Childcare $15/hr *40hrs *50wks/yr= $30k/yr

NET: ~$37k/yr. Adding $1600 tax credit for one dependent. Less your other expenses like licensing, malpractice, gas, etc.

Third: Your employer 150/hr for cash pay, 90/hr insurance. Assuming an 20/80 split, that's 4080/wk. Less no shows at 30% is $2856/wk. Less your pay is $1256, less a weirdly high overhead of 35% that excludes you, and they are making ~40k/yr on you.

I will counter offer with 50/hr.

 

[Therapist4Chnge]

Third: Your employer 150/hr for cash pay, 90/hr insurance. Assuming an 20/80 split, that's 4080/wk. Less no shows at 30% is $2856/wk. Less your pay is $1256, less a weirdly high overhead of 35% that excludes you, and they are making ~40k/yr on you.

This.

The "napkin" math I did was almost spot on with this…I had them making close to $50k/yr, mostly on a lower no-show rate (no idea what is "typical" for therapy) and a generous (overestimate) of 30% overhead.

 

[Rainbowbright22]

You're being scammed.


First: There is no way your are a contractor under IRS definitions. Unless they have the world's worst CPA, they have been informed about this behavior, and are engaging in it anyway.

Second: $40/hr *40hrs/wk *50 weeks/yr= $80k. less income tax so ~65k, less self employment tax/ssa contributions because you contribute both sides as a contractor, less state income tax if applicable

Childcare $15/hr *40hrs *50wks/yr= $30k/yr

NET: ~$37k/yr. Adding $1600 tax credit for one dependent. Less your other expenses like licensing, malpractice, gas, etc.

Third: Your employer 150/hr for cash pay, 90/hr insurance. Assuming an 20/80 split, that's 4080/wk. Less no shows at 30% is $2856/wk. Less your pay is $1256, less a weirdly high overhead of 35% that excludes you, and they are making ~40k/yr on you.

I will counter offer with 50/hr.

I would be an employee, not contractor.

 

[Rainbowbright22]

But basically this position at $40 an hour ~20 hours (16 billable?) really isn't worth it. The one thing I liked is I still make that $40 even with no shows. Overall consensus is I am being scammed.

 

[NotTheHoff]

Yep, I have little to add here, but I will anyway: that's way lower than I'd expect. That may be a rip-off even at the post-doc level.

 

[entitlement]

Its hard to say not knowing the geographical area where you are located but I was making about that per hour as a postdoc and I had health benefits and matching 401k (or 403b or whatever it is for non-profits).

 

[ela]

You're being scammed.


First: There is no way your are a contractor under IRS definitions. Unless they have the world's worst CPA, they have been informed about this behavior, and are engaging in it anyway.

Second: $40/hr *40hrs/wk *50 weeks/yr= $80k. less income tax so ~65k, less self employment tax/ssa contributions because you contribute both sides as a contractor, less state income tax if applicable

Childcare $15/hr *40hrs *50wks/yr= $30k/yr

NET: ~$37k/yr. Adding $1600 tax credit for one dependent. Less your other expenses like licensing, malpractice, gas, etc.

Third: Your employer 150/hr for cash pay, 90/hr insurance. Assuming an 20/80 split, that's 4080/wk. Less no shows at 30% is $2856/wk. Less your pay is $1256, less a weirdly high overhead of 35% that excludes you, and they are making ~40k/yr on you.

I will counter offer with 50/hr.

Can you elaborate on the 1st point? Im considering a contractor role in a private practice.

 

[Therapist4Chnge]

Can you elaborate on the 1st point? Im considering a contractor role in a private practice.

Back in 2004 there was a significant overhaul in what qualifies for "exempt" employee status. If you google exempt v. non-exempt employees you should get a listing of criteria that "help" employers classify their workers. In many instances employers will push for contract work bc it is far less costly.

*edit*

I was right! it was 2004. It looks like it has been updated a couple times since. https://www.dol.gov/whd/overtime/final2016/overtime-factsheet.htm You can also Google about Duties Test to get info about job classification.

 

[ela]

Back in 2004 there was a significant overhaul in what qualifies for "exempt" employee status. If you google exempt v. non-exempt employees you should get a listing of criteria that "help" employers classify their workers. In many instances employers will push for contract work bc it is far less costly.

*edit*

I was right! it was 2004. It looks like it has been updated a couple times since. https://www.dol.gov/whd/overtime/final2016/overtime-factsheet.htm You can also Google about Duties Test to get info about job classification.

OK, so that lead me to the IRS - https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-defined

I believe the position Im looking at would actually classify me as a per-diem employee, as opposed to a contractor. Though, the (non HR folks) have referred to it as a contract position. Looks like I could use some clarification!

 

[deleted343839]

I believe the position Im looking at would actually classify me as a per-diem employee, as opposed to a contractor. Though, the (non HR folks) have referred to it as a contract position. Looks like I could use some clarification!

That is gaming the system writ large. Walk away.

 

[PsyDr]

Can you elaborate on the 1st point? Im considering a contractor role in a private practice.

I'm not completely sure about the details of this. I just have some attorneys and accountants who work for me that explain how someone gets classified. My basic understanding is that a person is a contractor if they make their own schedule, determine how they did the work on their own, provide their own tools of the trade such as laptops, submit an invoice, etc. My technicians, despite being prn, would never be considered contractors because I provided the testing equipment and assigned them when to work.

I'm betting most psychologists don't know how this is determined. A lot of the oldies want to put everyone as a contractor to avoid employer contribution, workers comp stuff, and the paperwork. Be careful with negotiating. Some will resist.

I have a real problem with old people screwing the ecps. It's bad enough that some of the continued leadership is in their 70s. But that they are too greedy to let others move up and make money is reprehensible.