Difference in private practice income between LCSW and PhD/PsyD

[BX1959]

On one hand, many people are saying that having an LCSW versus a PhD/PsyD doesn't significantly affect insurance reimbursement rates or posted rates for therapy.

On the other hand, even though the sample size is very low (and it's obviously not scientific), I couldn't help but notice that on Payscale, the median self-employed salary for LCSWs is 118K, whereas for clinical psychologists, it's 260K. Now, this is based on just a handful of salary reports, and I think many social workers would take issue with the $118K figure.
http://www.payscale.com/research/US/Job=Licensed_Clinical_Social_Worker_(LCSW)/Salary
http://www.payscale.com/research/US/Job=Clinical_Psychologist/Salary

So it seems like these two points contradict each other. How would it be possible that private practice psychologists and clinical social workers get reimbursed at similar rates and charge similar rates . . . yet the former group is making potentially 100K more a year than the latter? Would the extra 'features' of clinical psychology (such as testing) be enough to explain the difference?

And needless to say, your critiques of those salary ranges are greatly appreciated, especially if you work in either field.

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[DynamicDidactic]

on Payscale, the median self-employed salary for LCSWs is 118K, whereas for clinical psychologists, it's 260K.

the accuracy of those numbers is highly dubious.

There is likely greater (within and between) variability in salaries of self-employed practitioner.

You should also consider the difference in years spent in school when considering salaries.

 

[Ollie123]

Both salaries are so wildly off the mark in terms of the "norms" (which are much, much lower) I'm not sure there is anything to make of them. I'm sure I can find an LCSW who owns a large practice and makes 500k a year, but its pretty meaningless.

 

[wesleysmith]

Yeah, those numbers look a little/really optimistic (at least for the LCSW). Not that it's impossible, and we should all aim to make double that for salary's sake, it's just certainly well out of the norm. A more reasonable average to expect in private practice based on what I've been told by some professors (who are PP LCSWs) is around $70,000.00 -- and even that is probably after lots of work to establish a healthy, thriving practice. Also keep in mind as a PP, you are in business for yourself and your income from reimbursements will be significantly reduced after costs and taxes (that FICA is now all yours 😛). And yes, to answer your question on differences (although I'm not certain that reimbursement rates are identical between the two professions), in PP a psychologist probably has more options due to their education and training that affords them greater income opportunities (e.g., testing).

 

[WisNeuro]

Yeah, those numbers aren't all that realistic, for either profession.

 

[erg923]

On the other hand, even though the sample size is very low (and it's obviously not scientific), I couldn't help but notice that on Payscale, the median self-employed salary for LCSWs is 118K, whereas for clinical psychologists, it's 260K.

Um...no.

 

[Peacemaker36]

For Medicare reimbursement rates, social workers earn 75% of the rate for psychologists.

 

[smalltownpsych]

Those sound more like the gross numbers. I do think we have an edge in revenue generation for a few reasons with assessment being one of them. Whether or not the extra schoong is worth it is a big "it depends". There are way too many variables to answer that question. For me, I chose psychologist over related degrees because of the science, the employment opportunities, the income edge, and the title.

Edit: by title I am referring to psychologist not the generic doctor which often causes more confusion than it's worth.

 

[deleted343839]

Those salary figures seem ridiculous. Shave off a good third and you're still looking at the tails of the distribution.

Reimbursement rates are lower for master's level clinicians, and psychologists have the added advantage of being able to make money from assessment work (indeed, some build their practices around this). Otherwise, there is a lot of variability, especially in larger and more affluent areas where many clinicians are dispensing with insurance panels. To paraphrase one of my former supervisors, "success" in private practice often comes down to marketing. To use an extreme example, I know a couple of LPCs who have found a niche for themselves and charge $180-200/hour, taking cash only. Both are attractive, well spoken, and have found a few routes to get some regular publicity in a big city. Last I checked they were doing quite well for themselves. The question of whether their services are "worth it" is irrelevant.

 

[bcliff]

http://lmgtfy.com/?q=insurance+reimbursement+96101

do some digging, and you can find out how some insurance companies will reimburse you. I used 96101 (just because it's the one code I always remembered - google other codes to see other services), which is the per hour CPT code for psychological testing. You are not reimbursed for the time spent (hours) doing insurance verification/authorization, claims filing, billing, etc.

 

[smalltownpsych]

http://lmgtfy.com/?q=insurance reimbursement 96101

do some digging, and you can find out how some insurance companies will reimburse you. I used 96101 (just because it's the one code I always remembered - google other codes to see other services), which is the per hour CPT code for psychological testing. You are not reimbursed for the time spent (hours) doing insurance verification/authorization, claims filing, billing, etc.

That's why you hire someone to do as much of the non-billable work as possible. You would be amazed at how much revenue you can generate if you don't have to worry about other aspects of the business. I try to fill my 40 hours with all billable activities at about 150 per hour average. If I spend an hour that someone else could be doing for 20 an hour, then I am losing a lot of money.

 

[bcliff]

That's why you hire someone to do as much of the non-billable work as possible. You would be amazed at how much revenue you can generate if you don't have to worry about other aspects of the business. I try to fill my 40 hours with all billable activities at about 150 per hour average. If I spend an hour that someone else could be doing for 20 an hour, then I am losing a lot of money.

Yea, but if you're paying someone $20/hour, then that's over $30k in overhead right there. When you include the rest of your overhead, that $150/hour is eventually whittled down, and 40 hours of billable time at $150/hour won't be realistic for most psychologists who rely on insurance companies for the bulk of their cases.

 

[QAsPsych]

Yea, but if you're paying someone $20/hour, then that's over $30k in overhead right there.

That's only true if each hour seeing a client requires an additional hour of paperwork.

 

[bcliff]

That's only true if each hour seeing a client requires an additional hour of paperwork.

You're right - I've seen 3rd party companies that exclusively handle billing and insurance, but if you rely on techs for testing administration/scoring, admin assistants to handle scheduling and appointment management, and an office manager to make sure everything runs smoothly, you'll likely need at least some full time employees. I wonder how *big* of a practice and caseload someone could feasibly manage without any support staff, or at least minimal support staff.

 

[QAsPsych]

You're right - I've seen 3rd party companies that exclusively handle billing and insurance, but if you rely on techs for testing administration/scoring, admin assistants to handle scheduling and appointment management, and an office manager to make sure everything runs smoothly, you'll likely need at least some full time employees. I wonder how *big* of a practice and caseload someone could feasibly manage without any support staff, or at least minimal support staff.

Generally if you have a large enough practice that you need all of those functions handled by people outside of yourself, you would be working in a practice that includes multiple practitioners. One full-time clinician does not need a support staff of 4 to make a successful, busy office work. I agree with your point but only to a limited extent.

 

[BX1959]

Thanks for the input and the interesting discussion about billing codes. Here are some questions I have at this point:

1. How about the difference between a DSW and a LCSW? Does the DSW give you any boost in private practice salary? (I'm not interested in teaching anytime soon.)

2. What would you say is a more realistic median gross income for LCSWs and psychologists? And what would the difference between gross and net income be? I'm a bit unsure about what the NASW salary survey has to say about this, since the 25th income percentile for private practitioners is about 30,000 a year -- and I wonder if those are folks who aren't doing full-time private practice work. If you have any pertinent salary data, feel free to link to it.

3. Will you generally earn more money overall as a LCSW if you do your private practice on the side, in addition to a full-time job? I know some take this route, but aren't you dealing with the same amount of overhead? What would be the ideal balance?

4. Any theories for why the payscale data is so skewed? Is it just the 'top of the line' income-earners bragging about their success? Are people lying? Are people reporting their earnings in pesos?

 

[473912]

Um...no.

Oh man, if only!!!! lol

 

[docma]

The costs of private practice (rent, utilities, marketing, billing, etc.) will be similar for both degrees but will vary regionally so you need to consider where you envision working and then talk to successful folks with each degree in that area to make a real comparison. Then you have to think about what you want to be doing, as each degree has different options. Psychologists can make lucrative niches doing assessments. LCSWs can make lucrative assessments doing private case management. Both degrees can find work doing supervision or teaching in areas of expertise, but who is hiring in a given geographical area will also vary.

 

[PsyDr]

These numbers are hilariously bad. Stick with the published data.

 

[Goobernut]

Thanks for the input and the interesting discussion about billing codes. Here are some questions I have at this point:

1. How about the difference between a DSW and a LCSW? Does the DSW give you any boost in private practice salary? (I'm not interested in teaching anytime soon.)

2. What would you say is a more realistic median gross income for LCSWs and psychologists? And what would the difference between gross and net income be? I'm a bit unsure about what the NASW salary survey has to say about this, since the 25th income percentile for private practitioners is about 30,000 a year -- and I wonder if those are folks who aren't doing full-time private practice work. If you have any pertinent salary data, feel free to link to it.

3. Will you generally earn more money overall as a LCSW if you do your private practice on the side, in addition to a full-time job? I know some take this route, but aren't you dealing with the same amount of overhead? What would be the ideal balance?

4. Any theories for why the payscale data is so skewed? Is it just the 'top of the line' income-earners bragging about their success? Are people lying? Are people reporting their earnings in pesos?

1. Being a DSW (in general) will not increase your insurance reimbursement. In PP you can charge what the market will bear for your expertise.

2. The figures for both vary by state. Salary.com or wageproject.org will both have better estimates determined by locale. There are some non-profits in my state who pay as little as $35k a year for their LCSWs.

3. Make sure wherever you work allows you to moonlight. Some agencies make you sign an agreement stating you will not bill for therapy on the side.

4. There are a ton of reasons the results could be skewed. Self-selection for response, location, years of practice... Without reading how they collected the data, we may never know. You will learn allllll about this in your stats and research classes 🙂 I personally like your pesos theory.

 

[BX1959]

Thanks for the notes. I feel that I'm much more passionate about social work than psychology at this point, but I ought to do as much research as I can on both fields.

I asked about the DSW because it seems like they do tend to make more money on average -- you can't know for sure that the DSW causes the salary increase, but the difference is there. Median/75th percentile DSW private practice salaries are 78K and 109K versus 52K and 80K for MSWs. Although I do wonder if the very low reports are skewing these numbers downward -- look at the 10th percentile salaries and you'll see what I mean. http://workforce.socialworkers.org/studies/profiles/Private Practice Solo and Group.pdf

I'm still trying to figure out why this might be. I understand the DSW has been more popular at some points than at others, but perhaps it's making a comeback?