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Compensation input?

Discussion in 'Pain Medicine' started by Yo GabbaPentin, Aug 15, 2011.

  1. Yo GabbaPentin

    7+ Year Member

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    Just offered a contract a couple of weeks ago. Just wanted to find out if this is standard. Location is not desirable and not undesirable. I am coming from an anesthesia background with an acgme fellowship.

    Base first year: 220k + no incentive.
    Base second year: 220k + 25% net profits
    Vacation and CME: 30 days
    Partnership in 2 yrs
    No disability insurance
    No retirement contributions
    Malpractice 250/750k

    Seemingly good practice owner in private practice with great referal base. No call or weekends. Is it worth negotiating anything? Does this seem standard? It just seems a bit low compared to my anesthesia colleagues who graduated recently. Thoughts?
     
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  3. powermd

    Physician Lifetime Donor Classifieds Approved 15+ Year Member

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    What does "partnership in 2 years" mean? You're giving up a lot in the first and second year, and receiving very substandard malpractice insurance in exchange for what exactly?

    Full equal partnership?
    Unequal partnership?
    Buy in? How much?

    I'm in my first year at a new job my second year out of fellowship. My deal is 225k + contractually loaned shares in the corporation that I pay for from my bonus checks. Bonuses are a fraction of profits equal to your fraction of total charges (this adjusts for payor mix by ignoring collections). I have a quarterly target payment for my shares, and any bonus money exceeding this I get to keep. If there is a shortfall, the payment period extends to additional quarters as needed. The $ value of partnership was set based on valuation of the corporation from a previous transaction where it was purchased (back) from a company who bought out the owner. It's a fair number. I get 15% SEP-IRA contributions, 1M/3M claims MP, an excellent health plan, 3K CME allowance, 1K dental reimbursement, and an embarrassing # weeks vacay. The practice has an wide and diverse referral base, well trained office staff, 2 flouro, 1 US, 1 RF. We're almost paperless, and we prescribe no narcs. Location is somewhat off the grid, but in a minor Northeastern city with a good airport.
     
  4. bedrock

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    He's lowballing you. It's not an insulting offer, but definitely an "initial offer". If this is a major popular metro area, those numbers are not that bad. For an average area, as you mentioned, I would ask for more.
    Starting pain salary for fresh grads closer to $250k in many places but you have two more weeks vacation than most. (most have 20days not 30days), so that has to factor into a lower starting salary, but I'd ask for $250K salary and see what he says.

    There is no reason you shouldn't have an incentive both your first years.

    And although your incentive may start at 25%, no reason your percentage shouldn't go up if your collections go way up. (I was offered 25% of collections, I said that's fine as a starting point over 500K collections, but asked for my incentive percent to increase by 10% for each 100k over 500k all the way up to 50% and I made around 80K extra my first year just by asking for that.

    1M/3M for malpractice is fairly standard and he's being cheap if he doesn't cover that for you. Pain malpractice isn't that expensive anyway.

    You also have to look into how good does partnership look for you in future. How well is he doing? Has anyone else come through there before you and left?

    Also if he won't budge on some of those things, but you want a little more, ask for tail malpractice coverage. It makes moving very expensive, and is worth some money to you. It's also another bargaining chip.
     
  5. Yo GabbaPentin

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    Thanks for the replies. What bothers me the most is the lack of benefits. They offer group rates for medical insurance but no money toward it. Same for dental, life and disability insurance. Minimal malpractice coverage.

    I want to negotiate but do not want to insult by asking for too much. With such lousy benefits, it seems like $275k would be more appropriate. Am I way off base in thinking that?
     
  6. bedrock

    bedrock Member
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    With all the other things I stated, I just assumed they offered basic medical insurance. If he isn't offering that either, his offer to you is beginning to look insulting. I would consider it inappropriate to not offer medical insurance to a new physician employee.
    I hope this isn't your only offer, because unless or your significant other has a burning desire to live in this place, there are better offers out there.
     
  7. mid|ine

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    Pass

    Even if you can negotiate better, is this really someone you want to partner with later? With an offer like this, I would say no.
     
  8. Tenesma

    Tenesma Senior Member
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    they are never going to offer the best contract up front - everything is negotiable...

    i have spoken to contract lawyers who add layers and layers of crap into contracts to protect/benefit the employer... they add these as a way to allow for negotiations to occur, with the understanding that quite a bit of it can be wiped away... interestingly most applicants don't negotiate

    negotiating doesn't mean making demands....

    your offer is not THAT horrible, if it is in a state with low reimbursements or high desirability...

    believe it or not, but as a partner you still have to pay for your own medical/insurance/retirement...

    I would counter w/
    1) 1st year: 250k w/ family medical coverage - forget dental/vision/disability/retirement
    2) 2nd year: 300k w/ family medical coverage - full SEP-IRA contribution and 25% of net-profits with full access to all of their books including the books of their subsidiaries that receive payments from the primary entity
    3) malpractice is not that big of a deal... unless your hospital/insurance carriers demand higher coverage in that state.
     
  9. dc2md

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    Great replies. I'm also a fellow starting to look at position around the country and this gives me an idea of what to look for. Thanks
     
  10. onewithpain

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    Counter for more than what you are willing to accept as he's got to feel that he got you to accept a little less. The books need to be open to an outside auditor of your choice.
     
  11. mille125

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    I agree that you definitely should counter but I think that you guys are going a bit overboard. The offer is low but it is far from insulting. Would any of you open your books to an auditor at the request of a prospective employee. No way. At partnership yes. At time of employment...hell. no. Any employee that ask to see my books could keep looking in my opinion.

    As far as malpractice, I would find out what is standard for the area. In my area 200k/600k is standard. In some states 3mil/10mil is standard. This varies from state to state.
     
  12. mille125

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    Lets break it down:


    Base first year: 220k + no incentive. (LOW IF NO BENEFITS)
    Base second year: 220k + 25% net profits (AVERAGE)
    Vacation and CME: 30 days (ABOVE AVERAGE)
    Partnership in 2 yrs (AVERAGE)
    No disability insurance (AVERAGE....JUST BUY YOUR OWN)
    No retirement contributions (BELOW AVERAGE)
    Malpractice 250/750k (STATE DEPENDENT)
     
  13. hyperalgesia

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    To me this situation is 100% dependent on the other offers you get.

    Personally, I cannot see the logic in trying to set up a multi year contract between parties who have never worked together. The guy with the practice is going out further on a limb than the new guy. Therefore, the terms at the outset will (and must) favor the established party. I can't even imagine hiring a stranger to work with me. Unless she's a beautiful Czechoslovakian or something.

    I think you have to get in there and show him what you're worth before making demands. If you're there for 6 months, everything changes. You know him and he knows you. Then you can sign a contract with some educated expectations.
     
  14. powermd

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    The new guy makes a pretty significant investment in money and time as well. He has to move, sign a new lease- which if he leaves after 6 months could be a problem, spend countless hours on credentialing, and if it doesn't work out, possibly have to pay a tail and do it all over again somewhere else starting from the beginning. At the very least he should have some guarantee of what partnership means should he make this investment. I've never understood the expectation that new guys sign a contract like this for two years without any idea what awaits them at the end. "Sign here now, and we'll talk about partnership in two years." That gives the established employer a terrific amount of leverage should he want to squeeze the new employee on partnership terms. I was fortunate enough in my current gig to have all that hammered out in contracts from day 1- total equality guaranteed.
     
  15. powermd

    Physician Lifetime Donor Classifieds Approved 15+ Year Member

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    One more recommendation to anyone looking for a job- definitely spend a day shadowing the practice to see exactly how things work. That would have saved me a year on my career had I done that with my first gig out of fellowship. What you see some private guys doing will make your eyes pop out of your head. I practically had to beg for contrast dye for epidurals at my first practice! No one was using any!
     
  16. mille125

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    This is a very very good suggestion. When you shadow, it either validates with you already believed or makes you run like the wind. I shadowed a practice in a large city that seemed really good on paper. However after shadowing I found that their bedside manner and overall philosophy were quite different from mine. I ended up opening my own practice which was the best choice of all.
     
  17. facets

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    The senior partner has everything to lose. When you are first opening a practice you spend an enourmous amount of money, blood, sweat and tears building it. You will not break even for 2 years. You will pay employees by the hour to do nothing because you are not busy enough. The new person gets everything handed to them and he/she can totally destroy your practice in 6 months by lazyness, apathy, or incompetence.Anyone I take will be on a trial basis now
     
  18. Yo GabbaPentin

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    I did do this and I absolutely loved the practice. It is exactly what I want in the location that I want. The only thing is the lower salary and uncertainty of what being a partner even means... especially since it will be in the era of Obamacare. Trying to figure out whether I'd like to just be an employee now and owe a large buy in when the time MIGHT come in two years vs partnership track where everything above 220K goes towards this buy in and I would owe little at that time.

    Thanks again to everyone for the discussion. It helps me significantly and I'm sure it is helping a lot of lurking fellows.
     
  19. geauxg8rs

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    I second the most vital things I have seen posted.

    1. being able to see financials, having access to this is most important. Medicare fraud is a beeyotch and federal time is not fun.
    You want to make sure that you are billing/coding appropriately. It also gives you the best sense of what you can expect as a partner. Above all else it tells you if this guy/gal is ethical.

    2. seeing the practice in action is key. You don't want to be expected to sign blank scripts.

    3. Having a good lawyer look at the contract. A good lawyer who specializes in contracts for physicians is worth their weight in gold (ever increasing prices).
     
  20. chinochulo

    chinochulo Member
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    not to hijack Yo Gabbapentin's thread, but since we are on the subject of contracts, I was offered this recently:

    1st year $240,000 draw + 50% net profits over $800k
    2nd year $240,000 draw + 50% net profits over $800k
    Vacation and CME: 20 working days
    partnership in 2 yrs
    retirement contributions by company
    malpractice same as everyone else in group

    Group currently has one shareholder/owner who started practice and now has three employees on potential partnership tract. Partnership details still being worked out but essentially offered as one share of the company which allows partner to partake in profits from ancillary services such as sleep lab as well as profits from three futures ASCs the shareholder is building over the next year. Each share entitles shareholder to portion of ASC entity, but not physical real estate. Buy-in amount currently unknown (as practice has not been valued) but is promised to be a figure between $500k-$800k (although this is obviously not in the contract). Overhead currently around 70% (he hopes to decrease to 50% over next two years) due to office expansion/money for ASC/four offices plus staff of 50. Procedures currently being performed in office.

    Since I have a long-term outlook when I evaluate a practice, I was concerned about unknown buy-in amount, continued high overhead, and building of three ASCs (what with the fickle policies of US govt and reimbursement). Also, I would not be a holder of physical property but just an owner of an ASC entity that leases the property from real estate owner (which is the practice owner).

    What would you guys have done--sign or run?
     
  21. mille125

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    I would neither sign or run. I would gather more info. Like any offer this one has good and bad points.

    Question: Is he really expanding that fast that he has three other nonpartners other than you (which would make four). By what you said that means that he hired 4 docs in two years. That seems like a lot.

    Question: Are net profits taken before or after physician salaries? If after, you will likely never see a dime of the net profit bonus?


    ASC buy-in is about right. 70% overhead is very concerning.
     
  22. chinochulo

    chinochulo Member
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    That is correct--he is expanding that quickly to capture market share. I would be the fifth physician in the practice, and he has plans to hire at least one more. The way he is expanding, I really don't see overhead decreasing anytime in the near future, especially with the high costs of running ASCs.
     
  23. 101N

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    http://beckersorthopedicandspine.com/home/item/9052-pain-management-physician-compensation-5-points-on-who-makes-the-most

    Pain Management Physician Compensation: 5 Points on Who Makes the Most
    Written by Laura Miller | August 18, 2011


    Here are five points on pain management physician compensation for both anesthesiology and non-anesthesiology specialists in 2010.

    1. Anesthesia vs. non-anesthesia pain management specialists. Non-anesthesia pain management physicians received $371,481 in compensation last year, which is more than $100,000 less than pain management specialists who practiced anesthesia, according to MGMA's Physician Compensation and Production Survey: 2011 Report Based on 2010 Data. Anesthesiology pain management physicians received an average of $502,024 in compensation last year.

    2. Hospital employment vs. private practice. Both anesthesiology pain management specialists and non-anesthesiology pain management physicians were more highly compensated when they were employed by hospitals than in private practice. Anesthesiology pain management physicians employed by hospitals received $502,775, which is $64,000-plus more than their counterparts in private practice. Non-anesthesiologist pain management specialists employed by hospitals received $338,096, which is $14,000-plus more than their counterparts in private practice.

    3. Multi-specialty practice vs. single-specialty practice. Anesthesiology pain management physicians received more than non-anesthesia pain management specialists in both the single and multispecialty practices. Pain management anesthesiologists received more ($447,697) when they practiced in a multi-specialty than a single-specialty ($398,459). For non-anesthesia pain management specialists, those practicing in a single-specialty received slightly less than their anesthesiologist counter parts ($394,956), but more than non-anesthesia pain management specialists practicing in a multispecialty group ($313,674).

    4. East vs. West. The highest compensating region for anesthesiology pain management physicians was the Midwest, where physicians received $511,200 on average. This is more than $120,000 higher than the lowest compensating region, the West. The highest compensating region for non-anesthesia pain management physicians was the South, where they received $356,085. These physicians received over $100,000 more than their counterparts in the lowest compensating region, the East.

    5. Urban vs. rural. Anesthesiology pain management physicians received similar compensation across the board, with the highest amount being in non-metropolitan areas ($480,057) and decreasing as the population increased. Non-anesthesia pain management physicians in metropolitan areas of 50,000-250,000 people received an average of $323,727. Data was unavailable for non-anesthesia pain management physicians for both very rural and very urban areas.
     
  24. Tenesma

    Tenesma Senior Member
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    the 3 ASCs is VERY concerning... and VERY risky...

    you have NO idea what is going to happen w/ Medicare cuts and the new 12 member super-committee that is going to cut costs

    what happens if they decide one way to cut costs is to force all procedures to be done in the hospital (hospitals will be lobbying heavily for this)???

    just like in your retirement portfolio, there needs to be diversification - and having 3 ASCs on the horizon is CRAZY risky, not to mention extremely overhead exhausting...

    This shareholder/owner guy either has a rich wife, or has been doing some unethical pain medicine to accumulate the capital needed to go ahaed w/ projects like that.
     
  25. chinochulo

    chinochulo Member
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    Tenesma,
    those were my thoughts exactly--i would be contributing towards building his ASCs in my first two years (that's why the incentive clause goes into effect only after I collect over 3x salary), with no guarantee that I will make my money back on the buy-in should those ASCs not do well in the future with ever-changing CMS policies. He had also mentioned using the productivity bonus as pretax contribution for buy-in reduction, but the contract offered had no provisions for this.
     
  26. Tenesma

    Tenesma Senior Member
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    you are basically paying for his ASC and then he can reneg on making you a partner and drag things out because you aren't meeting "productivity" requirements and then you will feel like you have money invested and you will keep on generating income for him...yuck
     
  27. mille125

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    I wonder if number two account for the fact that non hospital employed docs have other investment opportunities such as PT, ASC's, billing companies, pharmacies, MRI centers, etc. I doubt that they looked at this correctly. Hospital employed docs do not have this and also follow the whim of the hospital. No thanks. Personally, I would take less money.
     
  28. algosdoc

    algosdoc algosdoc
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    Hospital employed anesthesia pain creates a huge profit base for the hospital through internal referrals for PT, MRI, CT, bariatric surgery, procedures, and referral to other hospital employed specialists. It is a closed loop. My take on this is that in the future there will be severe curtailment of the insurance coverage for the yearly MRIs patients receive, PT is rapidly becoming a cost burden to hospitals due to a 25% reduction in payments from Medicare with more to come, and eventually congress will see these mills for what they are: exactly the type of situation Stark laws were designed to prevent in physician ownership.
    The difference between anesthesiology and non-anesthesiology based pain is all about procedures. Many anesthesiology based physicians want to do only procedures then have the patient go somewhere else, anywhere else, for management of pain issues. Many have no idea how to manage the physical rehabilitation side of pain nor have any interest in it since procedures pay 500-900% more per hour than do non-procedures.
    I believe the days of $500-800K reimbursement with cushy vacation packages will come to an end and fairly soon and physicians will think starting salaries of $200K will be quite attractive. We are not there yet, but insurers, regulators, and Congress knows pain medicine physicians make 50% more per hour of work than those working in their background specialty, and 400% as much as family physicians. It is only a matter of time that adjustments are made in fees for procedures.
     
  29. mille125

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    also as hospitals are squeezed more, these income guarantee relationships with anesthesia/pain groups will decrease or fade completely...
     
  30. Quirk11

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    Algos:

    What fields / specialties would you suggest then ?

    Wouldn't this logic apply to most or at least "many" areas of medicine ?




     
  31. bedrock

    bedrock Member
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    Algos,

    Did this 25% reduction in medicare payments to PT just happen? Does it apply to outpatient PT as well? I'm thinking of buying into our practice and one of the main sources of ancillary income is PT, and if PT just took a hit, and/or if a hit to PT reimbursement is right around the corner, that should devalue or lower the cost of my buy-in.

    Any thoughts on that would be appreciated.

    I work in a multi-specialty group with neurosurg, neurology, and orthopedics. The partners derive ancillary income from in-house PT, in-house X-ray, and their PAs. Right now that ancillary income is nice and as a partner, the extra money from ancillary income is sufficient to recoup the cost of my buy-in after about 18 months. However, I'm still a little anxious about putting out the money to buy in, given the uncertain medical climate we face.
     
    #30 bedrock, Aug 21, 2011
    Last edited: Aug 21, 2011
  32. algosdoc

    algosdoc algosdoc
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    I suspect the reductions could apply to all fields of medicine, and there are several reasons why...
    Noctors (midlevels and CRNAs) without adequate background training or understanding are infiltrating traditional medical areas of FP, general IM, OB, psych, anesthesia, etc in large numbers across the country with the blessings of their predatory state and national nursing associations. If the fees paid start to drop, these wannabe doctors will also take a hit, but will be also waiting in the wings like vultures to move into openings created when the 50 and up doctors begin retiring in waves due to the decreased reimbursement.
    Noctors are being trained at some institutions by physicians. Anesthesiologists for decades believed the noctors could be trained and controlled, but now the CRNAs believe they are not only as good as physicians because "they care" they are actually better, and they paint the anesthesiologists as greedy because they hired the CRNA to do the technical aspects of patient care. Noctors are now independent of anesthesiologists and all physicians in some states. The genie cannot be put back into the bottle. The anesthesiologists that worked with and trained the CRNAs for years are retiring, leaving a morass for the rest of the specialty to clean up, but it is too late. Only by not hiring CRNAs will the situation improve, but the anesthesiologists are too entrenched in their high incomes and lifestyles to ever do anything to benefit the specialty and patient welfare.
    Johns Hopkins is now training midlevels to do colonoscopies. All across the country, midlevels with ersatz training and experience are being placed on the front lines of medicine, seeing patients for the initial visit and rendering their uneducated opinions to the referring doc as though their opinion was what was being sought. Surgeons are training noctors to open and close and dissect down to the relevant structures to be surgically repaired or removed. Amazingly they do not believe themselves to be replaceable even though they are completely replicating the mistake made by anesthesiology. Physical therapists in many states have independent practices and do not require a physician referral. They compete with PMR.
    Noctors will be waiting anxiously for a mass exodus, and it will not be too much longer now since the medicare system will ultimately become insolvent (of course it already is since there are no segregated pools of money any more...it is all in the general budget of the US). Once medicare fees fall (and they will), then the house of cards collapses with reductions in fees from linked insurers.
    In order to provide rapid "access" to primarily and specialists care, we have shot ourselves in the foot by using the extenders that would ultimately cause our demise.
    No specialty is really safe....
     
  33. bedrock

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    Ok, that's very depressing. I sometimes wish I had finished my training 20 years and not 2 years ago.
    I think the key thing with PAs is to never teach them to do the primary job of any specialty. WTF is up with hopkins teaching them colonoscopies....?

    I don't have a PA, but the surgeons in our mixed specialty group have PAs, but they have strict limitations. They never do initial consults, but just assist in the OR, take care of pre-op paperwork, and do post-op checks, taking out sutures etc, which I feel is reasonable.

    BTW, did the 25% medicare cut to PT already happen, does it affect outpatient PT?
     
  34. mille125

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    I own a PT clinic and I am not aware of the 25% reduction. I will find out real quick on Monday and I will let you know. Our chief administrator is a PT and has 10-12 clinics. He keeps up with this and will let me know when I ask him.
     
  35. Quirk11

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    For an "exciting salary" of 200K, it would make more sense for an American anes / pain doctor to immigrate to Australia or another country in the long run.

    While other specialties do not have noctors as much, perhaps the medicare issues / public option will make their fields challenging (ie Vermont).

    I wonder if it will ever make sense at that salary to go back to dental school ? My friend is starting at 140 K in Texas 1 year out.

    I am hoping there will be some portion of the retiring baby boomer class that seeks a board certified pain physician and would be okay with paying for LESI, or other procedure (NO pill mill of course).

    PS In a dominant midlevel situation, where are all the trial lawyers and med mal premiums ? Would you expect all states go Texas style?



     
    #34 Quirk11, Aug 21, 2011
    Last edited: Aug 21, 2011
  36. algosdoc

    algosdoc algosdoc
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    The 25% reduction in CMS fees is based on statements made by a PT receiving my referrals. The initial proposed reductions were 40% in Nov 2010 by CMS but they reconsidered once the non-freeze on physician fees was passed by Congress for the 2011 year. Congress sought to freeze the reductions based on the SGF however CMS lowered our reimbursement anyway with nary a word from Congress and only mild grumbling from physicians. Here is a link to an article from last month describing the changes in PT reimbursement...I hope you can figure it out better than I.
    http://www.aapc.com/billinginsider/issue13.html#1
    I also think the reductions in our CMS reimbursement will start to fall next year and will continue falling by a total of up to 45% over 5 years. The upshot is that for a physician now making $500,000 per year in income with a 50% overhead and a total of 40% CMS and linked billing fees from insurers, if we do see a reduction in 45% over the next 5 years, then the overhead does not necessarily diminish at 500,000 per year, but now the overall reimbursement will fall from $1,000,000 from all sources to around $800,000, and given the same level of overhead, the physician's income now falls to $300,000. There are other options for revenue, but Stark puts us on a very slanted playing field, definitely slanted towards hospitals. Concierge and cash only practices are springing up like mad in many specialties and if there are no opioids being prescribed, may actually work for pain medicine.....
     
  37. 101N

    101N Membership Revoked
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    I don't have a crystal ball, but I think all of us will be falling back to more work in our primary specialties as well. IMO pain as a primary specialty will never see the light of day.
     
  38. Tenesma

    Tenesma Senior Member
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    the dollar has depreciated by 40% compared to australian dollar - so maybe moving to australia and practicing pain in the land of Bogduk is not a bad idea -
     
  39. algosdoc

    algosdoc algosdoc
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    I don't speak oz but I suppose I could dig out some old crocodile dundee videos and watch them repetitively. I do believe the specialty missed his chance to move into its own. It would probably now require major advances in pain medicine itself to become a separate specialty
     
  40. PinchandBurn

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    Do not sell yourself short.. Ask for atleast 300k. You've completed an extra one year and have lost a lot for that. It's what I would recommend starting at, especially given your minimal benefits.
     

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