F0nzie's Cash Private Practice - The Updates

[PistolPete]

Resident here.

What a beautiful website! Probably the nicest one I've seen, great job.

Nice to see someone forging a path for themselves. Also have dream of having my own cash pay PP, someday only having to work 4 days a week and still being able to lead a comfortable lifestyle. (Sometimes call can be brutal at my program and demoralizing, so nice to see someone living the life they've dreamt about!)

Will follow this thread as your practice grows. Best of luck.

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[UnicornDemon]

Here is the website I designed and launched 6 months before residency ended. My wife basically told me how she wanted the site to look and I did the technical work. I have since made a few modifications and we try to keep the blog updated: www.drshier.com.

Web development is one aspect of marketing that I still do not entirely understand or how it can be helpful for a psychiatric practice. We'll see what happens.

Nice looking website. Kudos for all the great work.

 

[F0nzie]

We've hit a bit of a dry spell recently. Our networking campaigns have come to a halt as we've been spending most of our time unpacking from the recent move. Today we will be giving a small presentation about our practice to a large group of psychologists and social workers (I think they had over 20). We have a small stack of flyers and business cards we will be bringing with us.

 

[nitemagi]

We've hit a bit of a dry spell recently. Our networking campaigns have come to a halt as we've been spending most of our time unpacking from the recent move. Today we will be giving a small presentation about our practice to a large group of psychologists and social workers (I think they had over 20). We have a small stack of flyers and business cards we will be bringing with us.

Meet people, take them out to lunch, make them your ally.

 

[vistaril]

First, it's a good looking site and I look forward to seeing your updates and progress. And good luck. I was always interested in your plans.

Second, one reason there may be difficulty in attracting patients so far(it does look like you are mostly empty right now right?) is your rates aren't low in any way. Some could argue they are steep. I know every area is different, but one of the 'top' analysts in my area who is harvard/MGH trained and has 20+ years of pp experience charges a top rate of 220/hr. But even that 220 is misleading because she gives discounts to some people, so her actual collections probably average less than 200/hr. And she went to Harvard and I think did extra training after residency. I think on one occasion you mentioned that some lpcs/lcsws get 150/hr cash pay in your area, so how could a psych ask for something similar?. Yes, that may be true, but I guarantee you that doesn't apply to most lcsws/lpcs. Heck most are working for 30 dollars an hour(if that) at agencies. You're talking about a cream of the crop top 5% of lcsws/lpcs who have spent decades networking and building contacts. So it's not really fair to compare the two in that respect. I understand scottsdale is a lot different than where I am from(although we do have a couple very affluent suburbs) due to wealthy retirees, but 250/hr for someone just starting out and without any pull/connections/influence would seem difficult. Even for a person from columbia/harvard/etc I would think that would be difficult for someone starting out.



Third, I think one of your biggest selling points(especially in your area) is that you and your wife(that is your wife right?) are photogenic/good looking people. That's not a trivial thing, and it's going to bring some patients in. I think a lot of this(as you seem to believe as well) is running a business....and my guess is you have a lot of skills in that area.

 

[HealthHare]

First, it's a good looking site and I look forward to seeing your updates and progress. And good luck. I was always interested in your plans.

Second, one reason there may be difficulty in attracting patients so far(it does look like you are mostly empty right now right?) is your rates aren't low in any way. Some could argue they are steep. I know every area is different, but one of the 'top' analysts in my area who is harvard/MGH trained and has 20+ years of pp experience charges a top rate of 220/hr. But even that 220 is misleading because she gives discounts to some people, so her actual collections probably average less than 200/hr. And she went to Harvard and I think did extra training after residency. I think on one occasion you mentioned that some lpcs/lcsws get 150/hr cash pay in your area, so how could a psych ask for something similar?. Yes, that may be true, but I guarantee you that doesn't apply to most lcsws/lpcs. Heck most are working for 30 dollars an hour(if that) at agencies. You're talking about a cream of the crop top 5% of lcsws/lpcs who have spent decades networking and building contacts. So it's not really fair to compare the two in that respect. I understand scottsdale is a lot different than where I am from(although we do have a couple very affluent suburbs) due to wealthy retirees, but 250/hr for someone just starting out and without any pull/connections/influence would seem difficult. Even for a person from columbia/harvard/etc I would think that would be difficult for someone starting out.



Third, I think one of your biggest selling points(especially in your area) is that you and your wife(that is your wife right?) are photogenic/good looking people. That's not a trivial thing, and it's going to bring some patients in. I think a lot of this(as you seem to believe as well) is running a business....and my guess is you have a lot of skills in that area.

I agree with what Vistaril is saying. I've run through several private practice websites in major metros like NYC, Boston, and Philly and have seen a good amount of established people with rates lower than what you two are currently charging. I'm no expert on these things, but it could be something to consider.

And you guys definitely have a sort of "it" factor going on. I was very impressed with the screen presence you two had in the youtube videos. In your position I would be strongly inclined to work the local media angle (e.g. presenting a topic on a morning show, or consulting for evening news). Who knows, maybe a husband and wife tv show is in the future!

 

[countryboy75]

Just a thought, but what about advertising something along the lines of intake appointments available daily etc?. At least get a pts foot in the door

 

[xenotype]

I think a rate around $150-175 an hour is what you should be going for. Assuming you can fill your practice, with a pretty easy schedule you can make plenty at those rates. At such high rates that you currently have, it may take a lot of time to fill.

 

[vistaril]

I think a rate around $150-175 an hour is what you should be going for. Assuming you can fill your practice, with a pretty easy schedule you can make plenty at those rates. At such high rates that you currently have, it may take a lot of time to fill.

Another advantage to having more people in the practice is that even if you make the same(ie see 30% more patients but charge less so you make the same overall), you are bringing more patients into the practice which will eventually grow your rep and you're going to get more refs(and thus more$) from that.

I also think the intake is way too expensive. There isn't any reason you can't do an intake in an hour if your cash pay,and more importantly there isn't any reason you can't continue to build on the base of the intake in subsequent sessions/appts if that isn't enough time. The whole point of going away from insurance is to do things *your way*, but the term 'intake' itself is something that is aligned with insurers,medicare/Medicaid, etc.....you can still do things your way, just don't spend 90 minutes with the pt on the first appt.

Again, your biggest asset is you seem ambitious and you two are both very photogenic and I suspect good with people. But what you are charging for your first session is what name people with decades of experience and plush offices in fancy areas charge. Maybe down the road that will be the case with you and your wife, but it isn't right now.

Finally, you've got to think about the pts you are targeting. Pts who drop 350 dollars cash(or whatever the first appt cost I forget) are not people who care shopping for bargains or really are that cost conscious. And given that, who are they going to go to? The established guy with the name/connections who trained at UCSF and has an expensive office, or the guy starting out who hasn't really established himself and has the opposite of a plush office? By lowering your rates a bit, you can go after the patients who are somewhat more focused on price and whose copays have gone up a lot anyways. They may say "well now my copay has gone up to 65 and my psych just spends 3 minutes with me and doesn't know crap about me. For another hundred bucks I can see this guy who is actually going to listen to me, spend time with, develop a real treatment plan, and give me some attention".

 

[vistaril]

Just a thought, but what about advertising something along the lines of intake appointments available daily etc?. At least get a pts foot in the door

At 375 and 450 dollars(!) each, I don't think it's going to be that easy. Patients with that amt of cash to spend(and even less) can likely already get in without problems very quickly.

I really think the rates are just way too high given the circumstances(just out of residency, newly in business, a heavy insurance presence in the area), especially the intakes. And I'd also change the times and take away the 45-60 minutes part and just change it to 1 hr when describing the length of the 1 hr therapy/med appts. Same for the 20-30 minutes bit. You're charging them 250 and 300 dollars cash pay- this isn't a VA where the pts are going to be cool with the psychologist grabbing them at 5 after and shaking their hand at the door leaving between 10 and 15 until. because they are paying bigtime money. I realize that you want to have a few minutes between patients to do a note, gather thoughts, etc....but you're going to have plenty of time to do that as you're going to(at least for awhile as you are starting up) have plenty of open appts.


Also, the office is clean and tidy....but it's small and clearly fairly expensive. When pts are preparing to drop 375 and 450 dollars on a first visit, they want to be wowed to some degree. It makes sense to go cheap on rent and everything because you're just starting out....but again that's where the prices and the reality that the pts see aren't going to match it.

I think is the best example- let's say you are your wife are wanting to have a nice dinner one Friday night at an upscale restaurant. You can go to one of the name restaurants with white tabelcloths in the good area that has the chef who is well known and the food is good for 80 dollars per person. Or you can try the new restaurant which you don't know much about. It's located in a typical blah shopping center, and the décor is rather Spartan. It may be real good but who knows. It's also about 80 dollars per person. Which restaurant are you and your wife going to go to?

 

[OldPsychDoc]

I guess I missed the post where Fonzie was asking for advice on his business model from people who haven't yet finished residency.

 

[vistaril]

I guess I missed the post where Fonzie was asking for advice on his business model from people who haven't yet finished residency.

your usual attempted silliness and snarkiness aside, you sorta did.....the tone of the thread(started by fonzie) is obviously one in which numerous people from several different perspectives are chiming in on his website, pricing, marketing, etc.

 

[st2205]

I presume you will vacation together. How do you plan to handle call?

 

[OldPsychDoc]

your usual attempted silliness and snarkiness aside, you sorta did.....the tone of the thread(started by fonzie) is obviously one in which numerous people from several different perspectives are chiming in on his website, pricing, marketing, etc.

No--I've been following it--right up to the point where you start preaching at him about the economics of their locale, and what he ought to do about it...
He clearly started the thread as a sharing of his experiences for our interest and benefit--not as a request for critique or input.

 

[F0nzie]

Thanks for the feedback Vistaril. I think you make some very good points about lowering the fees and maximizing profitability. However, I am not very interested in that paradigm right now. Regarding the fees (they are not based on the prestige of my medical school or residency), as I mentioned previously we are not receiving bread and butter referrals. We have been getting rather complicated patients who need the extra time. These patients know they can stay within their insurance network and find a psychiatrist (this area has a very high saturation of insurance based psychiatrists that can see them within 1-2 weeks. I always make this an option for them from the get go). Our intakes have been 2 to 2 hours+ in length (esp child). This does not include the report preparation and correspondence to their PCP and therapist which ends up being around 3-3.5 hours of our time per intake. This brings our hourly rate down to about $130/hour before overhead.

Although our rates seem high, our real hourly rate is much lower (even less than $130/hour) because we offer services that we do not advertise. For example, offering intakes or urgent follow ups same day or next day, offering evening and weekend appointments, unlimited phone calls + emailing for physician correspondence (as long as it is therapeutic), report preparation that is sent to both the PCP + therapist, ongoing contact with their therapist by phone or voicemail. Follow up call the next day or within 2 days to make sure there are no side effects or additional concerns, and "intensive" treatment to transfer them back to the care of their PCPs or therapists as efficiently as possible. All of these extra services that may be termed as "concierge" IMO are nothing more than basic physician duties from our oath that try to go the extra mile, therefore, I feel should not be advertised as "superior" for the sake my own profitability.

We appreciate the autonomy and having the opportunity to giving the best possible care, even if it pays less. We do not need to do this job-- we get paid ALOT more in community mental health and we enjoy those jobs too. We love Psychiatry and the possibilities it has to offer.

I hope this thread will start to pump up a lot of med students and residents-- to get out there and take some risks, to be open to criticism, to learn to be creative and think out of the box, to overcome your fears, and to believe in yourselves.

 

[HealthHare]

No--I've been following it--right up to the point where you start preaching at him about the economics of their locale, and what he ought to do about it...
He clearly started the thread as a sharing of his experiences for our interest and benefit--not as a request for critique or input.

I don't see what's so wrong about Vistaril voicing some constructive feedback. Yes, he does have a reputation on this board, but that's no reason to take what he said out of context. He was merely suggesting that the fees appear a little steep, which could POTENTIALLY have an adverse effect on filling appointments. Sounds like common sense to me.

I can only assume that Fonzie's willingness to share so much about his venture was in part to provide an avenue for discussion about the issues that arise in establishing a cash private practice. Whether he chooses to listen to the feedback from others is completely up to him, but at least that information is available for others, who may be reading this while trying to set up their own practice.

 

[vistaril]

No--I've been following it--right up to the point where you start preaching at him about the economics of their locale, and what he ought to do about it...
He clearly started the thread as a sharing of his experiences for our interest and benefit--not as a request for critique or input.

this is a ridiculously literal way to approach a message board/forum of this nature.

The very nature of the forum invites comments such as mine(and several others in this very thread who threw out other ideas).

Furthermore, in an open forum like this the OP doesn't get to decide the exact nature of the comments/responses. Now of course fonzie can totally ignore my suggestions. Or he can read them and say to himself "gosh those are some dumb ideas". But nobody would be silly enough to go to an open discussion forum like this, post the sort of story he did, and believe that the thread wouldn't evolve into several posters making suggestions on how he could drum up more business.

 

[HealthHare]

Thanks for the feedback Vistaril. I think you make some very good points about lowering the fees and maximizing profitability. However, I am not very interested in that paradigm right now. Regarding the fees (they are not based on the prestige of my medical school or residency), as I mentioned previously we are not receiving bread and butter referrals. We have been getting rather complicated patients who need the extra time. These patients know they can stay within their insurance network and find a psychiatrist (this area has a very high saturation of insurance based psychiatrists that can see them within 1-2 weeks. I always make this an option for them from the get go). Our intakes have been 2 to 2 hours+ in length (esp child). This does not include the report preparation and correspondence to their PCP and therapist which ends up being around 3-3.5 hours of our time per intake. This brings our hourly rate down to about $130/hour before overhead.

Although our rates seem high, our real hourly rate is much lower (even less than $130/hour) because we offer services that we do not advertise. For example, offering intakes or urgent follow ups same day or next day, offering evening and weekend appointments, unlimited phone calls + emailing for physician correspondence (as long as it is therapeutic), report preparation that is sent to both the PCP + therapist, ongoing contact with their therapist by phone or voicemail. Follow up call the next day or within 2 days to make sure there are no side effects or additional concerns, and "intensive" treatment to transfer them back to the care of their PCPs or therapists as efficiently as possible. All of these extra services that may be termed as "concierge" IMO are nothing more than basic physician duties from our oath that try to go the extra mile, therefore, I feel should not be advertised as "superior" for the sake my own profitability.

We love the autonomy and we love having the opportunity to giving the best possible care, even if it pays less. We do not need to do this job-- we get paid ALOT more in community mental health and we love those jobs too. We love Psychiatry and the possibilities it has to offer.

I hope this thread will start to pump up a lot of med students and residents-- to get out there and take some risks, to be open to criticism, to learn to be creative and think out of the box, to overcome your fears, and to believe in yourselves.

Thanks for explaining your rationale in great detail, I really appreciate this thread.

 

[vistaril]

Thanks for the feedback Vistaril. I think you make some very good points about lowering the fees and maximizing profitability. However, I am not very interested in that paradigm right now. Regarding the fees (they are not based on the prestige of my medical school or residency), as I mentioned previously we are not receiving bread and butter referrals. We have been getting rather complicated patients who need the extra time. These patients know they can stay within their insurance network and find a psychiatrist (this area has a very high saturation of insurance based psychiatrists that can see them within 1-2 weeks. I always make this an option for them from the get go). Our intakes have been 2 to 2 hours+ in length (esp child). This does not include the report preparation and correspondence to their PCP and therapist which ends up being around 3-3.5 hours of our time per intake. This brings our hourly rate down to about $130/hour before overhead.
[/U].

Well specifically in terms of the intake, my thought is why not break it up into essentially several smaller sessions? And in each of those sessions(after knowing a bit about the presenting problem and some of the most important pieces of the history) start to actually work on them. Even towards the end of a 1 hr session 1, and even before you know when the pt lost their virginity, how many cigarettes they smoke, whether their dad had cancer, and how secure their attachment was early on to their mother. I don't see why I need to know all that stuff after one meeting. I think pts look at an intake in a different way then we do. Pts want to think this is the place they are coming today(on their first apt) to start to work on their problems and get some help. Whereas we look at intakes as "this is where I get all the information I need about the pt to do a proper intake and make formal recs for treatment". Both are important I suppose, but I'd want to try to do a bit of both starting with the first appt.

To me one of the joys of this type of cash pay private practice would be to break out of all the structure present in places like agencies and cmhcs in the first place.

 

[xenotype]

Although our rates seem high, our real hourly rate is much lower (even less than $130/hour) because we offer services that we do not advertise. For example, offering intakes or urgent follow ups same day or next day, offering evening and weekend appointments, unlimited phone calls + emailing for physician correspondence (as long as it is therapeutic), report preparation that is sent to both the PCP + therapist, ongoing contact with their therapist by phone or voicemail. Follow up call the next day or within 2 days to make sure there are no side effects or additional concerns, and "intensive" treatment to transfer them back to the care of their PCPs or therapists as efficiently as possible. All of these extra services that may be termed as "concierge" IMO are nothing more than basic physician duties from our oath that try to go the extra mile, therefore, I feel should not be advertised as "superior" for the sake my own profitability.

Oh, that's a lot more interesting. Forgive me for commenting, I am just really interested in any form of cash pay practice.

 

[F0nzie]

I presume you will vacation together. How do you plan to handle call?

This is a really good question man.

All I can say at this point is that I am not going on an African Safari for a while. We also have a 9 month old and plan on having another child.

 

[F0nzie]

Oh, that's a lot more interesting. Forgive me for commenting, I am just really interested in any form of cash pay practice.

Hey you're learning. I am learning too.

 

[image187]

I hope this thread will start to pump up a lot of med students and residents-- to get out there and take some risks, to be open to criticism, to learn to be creative and think out of the box, to overcome your fears, and to believe in yourselves.

4th year med student here, and inspired. I've wanted to be a private practice psychiatrist since I was in high school. and being recently exposed to the real world of medicine and the way insurance restricts how you can provide to your patient, I've been really turned on to this whole cash only model of doing things. I really appreciated when you talked about how this enables you to spend real time paying attention to your patient, communicating with their PCP, and facilitating treatment instead of bending over for the insurance company. Now I know this is all possible straight out of residency. Although this is the very beginning and things seem rough, this whole thing is really good to see and you seem like your on the right track to success, so good luck to you!

...we offer services that we do not advertise. For example, offering intakes or urgent follow ups same day or next day, offering evening and weekend appointments, unlimited phone calls + emailing for physician correspondence (as long as it is therapeutic), report preparation that is sent to both the PCP + therapist, ongoing contact with their therapist by phone or voicemail. Follow up call the next day or within 2 days to make sure there are no side effects or additional concerns, and "intensive" treatment to transfer them back to the care of their PCPs or therapists as efficiently as possible. All of these extra services that may be termed as "concierge" IMO are nothing more than basic physician duties from our oath that try to go the extra mile, therefore, I feel should not be advertised as "superior" for the sake my own profitability.

I couldn't disagree with you more in terms of advertising these services. I think a problem with some people is that theyre too modest when they shouldn't be, and don't let this happen to you in terms of your business. I know it's good to be humble all and do the good doctor thing, but if there's you who advertises that you're wiling to see patients urgently, at night, and on weekends (not on a regular basis but that the emergency option exists instead of just fwd'ing them to the ER), that you'll communicate their plan to their PCP each time in a timely manner, and have unlimited treatment related phone calls and emails....and then there's the experienced guy with the big fancy office who isn't willing to offer these things, this will not only help your business but will most likely show a potential patient that you're a new doctor in town who cares. Customer service is so very important, and most likely (if not always) will be the thing in your patients mind that makes you the better choice, regardless of the skill or experience of someone else. I think that the average person is lazy and does the minimum acceptable amount of work. If you are willing to go "above and beyond" (quotes because according to you this really is just the standard of care), make it known and beef up your business model. People are expecting businesses to advertise things they can offer, and if you don't, don't assume it will be understood that you do do those things.

 

[vistaril]

4th year med student here, and inspired. I've wanted to be a private practice psychiatrist since I was in high school. and being recently exposed to the real world of medicine and the way insurance restricts how you can provide to your patient.

do insurance companies really(in most cases) restrict the care we can provide to patients? Yes obviously they arent going to let you see a pt twice weekly for one hour psychodynamic sessions and bill it to insurance, but isn't that the way it should be? I think it is reasonable for insurance companies to cap yearly visits with a psychiatrist at 20 or so(which seems to be a common number).....

what I suspect you really mean is that insurance restricts us getting paid what we *want* to make if we provide the sort of care fonzie wants to provide in his clinic. Insurance will reimburse you for 1 hr appts; just not at the level we want to be paid. That's not an issue for the insurance. That's an issue for us. And some people take things into their own hands and do things their own way(cash pay pp), and then others go the safer route and accept insurance and practice the type of psychiatry that insurance will pay you a decent amount for. It's an individual choice.

It's just somewhat irritating to hear a psychiatrist say that an insurance company is 'making' them see 4-5 pts an hour. That's not true in the least. You're choosing to see 4-5 pts an hour to make more money than if you saw 1 per hour.

 

[dl2dp2]

Obviously they arent going to let you see a pt twice weekly for one hour psychodynamic sessions and bill it to insurance, but isn't that the way it should be?

Depending on the insurance, most PPOs don't have session limits. This means you can in fact bill insurance for out-of-network coverage for 3x/week psychoanalysis with a training analyst and pay about a few thousand dollars a year. Meanwhile, if you stay with an in-network therapist, you'll end up paying $20 copay for each session, saving you maybe 50%. However, very few training analysts are in-network.

People with insurance--even Medicaid--can easily find cheap non-MD therapists because of a large supply. For people who are working steadily and have reasonable insurance, a weekly MD therapist costs about a few thousand dollars, which while costly, isn't back breaking--also remember you can deduct medical expenses on your tax return. This is really how private practice with a small number of patients works. The problem with therapy in patients who are higher functioning and can pay for treatment is that they don't want to continue doing therapy.

 

[vistaril]

People with insurance--even Medicaid--can easily find cheap non-MD therapists because of a large supply. For people who are working steadily and have reasonable insurance, a weekly MD therapist costs about a few thousand dollars, which while costly, isn't back breaking--also remember you can deduct medical expenses on your tax return. This is really how private practice with a small number of patients works. The problem with therapy in patients who are higher functioning and can pay for treatment is that they don't want to continue doing therapy.

what math are you using? $250(fonzie's hourly rate just to pick one) x 52 = 13,000 dollars......there is no insurance plan here(or in the two other states Im familar with) that will pay more than a fraction of that 13k total in that scenario. Nor should they(after all costs are out of control to start with)

 

[dl2dp2]

what math are you using? $250(fonzie's hourly rate just to pick one) x 52 = 13,000 dollars......there is no insurance plan here(or in the two other states Im familar with) that will pay more than a fraction of that 13k total in that scenario. Nor should they(after all costs are out of control to start with)

You are clearly not very informed. BCBS PPO pays 80% of "usual and customary", which is > $350 last time I checked, which was more than 1 year ago. There is a deductible though. Patients are not going to pay 13k. They'll pay 1k deductible.

$250 is considered on the low end of the spectrum for private practice. Someone who practices in a growing, upscale market, like a wealthy suburb in Scottsdale AZ SHOULD charge this sticker price. Secondly, someone who comes by 10 times a year for med checks would probably be willing to pay $1500-$2000 for quality psychiatric care. If you do 30 min med check that's $300 an hour. The issue is getting enough patients. This obviously requires marketing, which he's doing now. I'm sure he'll be fine in a few months.

 

[vistaril]

You are clearly not very informed. BCBS PPO pays 80% of "usual and customary", which is > $350 last time I checked, which was more than 1 year ago. There is a deductible though. Patients are not going to pay 13k. They'll pay 1k deductible.QUOTE]

Look at it this way- if patients could have unlimited 1 hr sessions at $350 and recieve 16k worth of care for a thousand bucks or whatever, why wouldn't they all be doing that?
Why are so many people with BCBS(and other large insurers) paying 30-40 dollar copays for crappy 10 min med checks across the country when they could be getting gold plated care where a psychiatrist sees them weekly for 1 hr sessions at 350 dollars per hour that they aren't paying? It doesn't make any sense....patients aren't going to pay similar money for a crappy service when they could be getting patient centered care(and 1 hr a week worth of it per week) from their psychiatrist for essentially the same price.

Look at this very thread....why in the world would Fonzie have such a limited number of patients right now if they could easily go to him for the sort of out of pocket costs you cite? He has already stated the market is flooded with insurance based outpt brief med mgt psychiatrists in that area. Do you really think that if major insurers in that area would pay for most all the cost of out of network 350 dollar an hour psychiatrists(for weekly visits) that people wouldn't desert their current med mgt psychiatrists in droves for this utopia?

 

[dl2dp2]

Look at it this way- if patients could have unlimited 1 hr sessions at $350 and recieve 16k worth of care for a thousand bucks or whatever, why wouldn't they all be doing that?

1) PPOs are more expensive for monthly out of pockets. 2) Not everyone wants weekly visits. 3) A few thousand dollars may be a pittance to you but is really not for the average BCBS person. 4) THEY ARE ALL DOING THAT which is why there's a psychiatrist shortage in these markets.

Look at this very thread....why in the world would Fonzie have such a limited number of patients right now if they could easily go to him for the sort of out of pocket costs you cite?

He just has a limited number because he's young and just graduated 1 month ago. GEEZ chill OUT. I'm pretty sure they'll be fine in a few months. Worst case scenario they'll sign up for a few panels and hire a secretary. It's not the end of the world. It's STILL private practice.

 

[vistaril]

4) THEY ARE ALL DOING THAT which is why there's a psychiatrist shortage in these markets.

Maybe in certain markets this is more common(parts of manhattan, LA, san fran, etc) but those markets are not the norm. The vast majority of people in this country do not live on the upper east side or in Corona Heights. Look at Fonzie's new experiences for example(do you doubt him?).....he's in scottsdale, which is hardly some backwater place, and he's made it clear that what is much more common there in the outpt world is insurance based med mgt and that what he is doing is different than what most others there are doing. And spending just 2 minutes browsing the scottsdale area with a google search shows that there are FAR more insurance based med mgt people/groups doing fairly high volume work compared to what Fonzie is doing.

 

[billypilgrim37]

Maybe in certain markets this is more common(parts of manhattan, LA, san fran, etc) but those markets are not the norm. The vast majority of people in this country do not live on the upper east side or in Corona Heights. Look at Fonzie's new experiences for example(do you doubt him?).....he's in scottsdale, which is hardly some backwater place, and he's made it clear that what is much more common there in the outpt world is insurance based med mgt and that what he is doing is different than what most others there are doing. And spending just 2 minutes browsing the scottsdale area with a google search shows that there are FAR more insurance based med mgt people/groups doing fairly high volume work compared to what Fonzie is doing.

Sluox accurately described the way a PPO works. A PPO is more expensive than an HMO, or covers less of the cost of some other services, but I have friends in training who have opted for the PPO instead of the HMO specifically so they can get therapy this way. PPOs are nothing weird, though they are usually more expensive than what an employer automatically offers.

We almost did the PPO because my wife lives in a different city for much of the year, and our HMO has a very narrow market. We stayed with the HMO because overall the PPO was crappier for many services, but it would have paid well should she get sick where she lives, and it would pay well for out of network services such as psychotherapy.

I'm not an actuary, but as the insurance companies willingly offer these plans, apparently they're not getting burned.

And, in case it hasn't been clear, I do not live in what would generally be considered a thriving private psychotherapy market. Within that market, what sluox describes is fairly typical.

 

[vistaril]

Sluox accurately described the way a PPO works. A PPO is more expensive than an HMO, or covers less of the cost of some other services, but I have friends in training who have opted for the PPO instead of the HMO specifically so they can get therapy this way. PPOs are nothing weird, though they are usually more expensive than what an employer automatically offers.

We almost did the PPO because my wife lives in a different city for much of the year, and our HMO has a very narrow market. We stayed with the HMO because overall the PPO was crappier for many services, but it would have paid well should she get sick where she lives, and it would pay well for out of network services such as psychotherapy.

I'm not an actuary, but as the insurance companies willingly offer these plans, apparently they're not getting burned.

And, in case it hasn't been clear, I do not live in what would generally be considered a thriving private psychotherapy market. Within that market, what sluox describes is fairly typical.

I understand the concept of the flexibility of a PPO and how a PPO is often better for patients going to an out of network psychiatrist for weekly or twice weekly sessions than an HMO would be. I just don't agree with his specific numbers, specifically how usual and customary rates are often calculated. Just because there are a group of MD psychiatrists charging 350 dollars per hour in a session doesn't mean the insurance company is going to just bend over and submit to this as the basis for reimbursement. They take a lot of stuff into account to determine this number. the largest PPO in this area pays nothing close out of network to the numbers he is throwing around. Now obviously I'm not in LA/San Fran/etc, and I'm willing to believe things are different there, or at least within certain zip codes there....but as I said earlier, the vast majority of people don't live in those areas. And the vast majority of psychiatrists don't practice in those areas.

 

[F0nzie]

I recently signed up for a Health Saving Account (http://www.mayoclinic.com/health/health-savings-accounts/GA00053) with the company I am working for. Basically it is a high deductible plan in which I can contribute a certain amount of pre-tax money and the employer contributes $500 per year. Any money that remains in the account at the end of the year rolls over. I think it works well for people who are relatively healthy and it has some other advantages too.

Anyways, all this talk about insurance brings me to my Tip of the Day: The Superbill

If you decide to opt out of insurance completely (as I have decided) or if you choose to get paneled up, chances are you will not accept every single insurance out there and you will need to generate a superbill for the patient to file for out-of-network benefits.

What is a superbill?

It's a misnomer. First of all, there is nothing super about it. Second, it's not a freaking bill! This does lead to a bit of confusion so you will have to explain it to your patients. It's a receipt for services rendered. You provide it to the patient after payment has been processed.

The superbill can be designed however you like, but there are key elements that it requires:

1. Name of the practice
2. Practice address
3. Patient's name
4. Patient identifying information (date of birth)
5. Service provided (CPT code)
6. Date of service
7. Rate of service
8. Amount received
9. Name of the provider

Some insurance companies will require your business ID or EIN# (http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Employer-ID-Numbers-(EINs)-) in addition to the above information.

Here is what my superbills look like:

 

[nitemagi]

I recently signed up for a Health Saving Account (http://www.mayoclinic.com/health/health-savings-accounts/GA00053) with the company I am working for. Basically it is a high deductible plan in which I can contribute a certain amount of pre-tax money and the employer contributes $500 per year. Any money that remains in the account at the end of the year rolls over. I think it works well for people who are relatively healthy and it has some other advantages too.

Anyways, all this talk about insurance brings me to my Tip of the Day: The Superbill

If you decide to opt out of insurance completely (as I have decided) or if you choose to get paneled up, chances are you will not accept every single insurance out there and you will need to generate a superbill for the patient to file for out-of-network benefits.

What is a superbill?

It's a misnomer. First of all, there is nothing super about it. Second, it's not a freaking bill! This does lead to a bit of confusion so you will have to explain it to your patients. It's a receipt for services rendered. You provide it to the patient after payment has been processed.

The superbill can be designed however you like, but there are key elements that it requires:

1. Name of the practice
2. Practice address
3. Patient's name
4. Patient identifying information (date of birth)
5. Service provided (CPT code)
6. Date of service
7. Rate of service
8. Amount received
9. Name of the provider

Some insurance companies will require your business ID or EIN# (http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Employer-ID-Numbers-(EINs)-) in addition to the above information.

Here is what my superbills look like:

They also want your tax ID #.

 

[strangeglove]

Maybe in certain markets this is more common(parts of manhattan, LA, san fran, etc) but those markets are not the norm. The vast majority of people in this country do not live on the upper east side or in Corona Heights. Look at Fonzie's new experiences for example(do you doubt him?).....he's in scottsdale, which is hardly some backwater place, and he's made it clear that what is much more common there in the outpt world is insurance based med mgt and that what he is doing is different than what most others there are doing. And spending just 2 minutes browsing the scottsdale area with a google search shows that there are FAR more insurance based med mgt people/groups doing fairly high volume work compared to what Fonzie is doing.

This has more to do with perception than with the actual math of how much patients pay out of pocket. The vast majority of patients look for psychiatrists through their insurance, since they usually don't see psychiatrists as somehow different from other doctors who they are used to finding through their insurance. They are also not aware of all the things we talk about here relating to good psychiatrists and bad psychiatrists, or even know what psychotherapy is. To them, a doctor is a doctor, and maybe it is better if they are Jewish or Indian or are closer to work or whatever. There is a segment of the population, however, that is very keenly aware of the value of a "good" psychiatrist, i.e. a psychiatrist who is attentive and empathic, is able to integrate psychosocial and medical approaches and, most importantly, who spends time with you. These may be people who have been "through the ringer" of in-network psychiatrists and may not have felt comfortable with anyone (again, due to time constraints more than anything else), or who have knowledgable relatives, or who "want the best", or whatever. These are also people who go to Google to find psychiatrists, as opposed the back of their insurance card. In places like NYC, this is actually part of the culture, i.e. everyone "knows" that it is hard to get good psychiatric care with insurance only (again, this is all about perception, not the reality). This is why the cash-only model tends to work better in such places, not because patients are wealthier. As Sluox is saying, the economics actually make a fair amount of sense if patients are willing to pay a little extra to get the care that they think they deserve. It's just that patients aren't really aware of what they deserve. I think Vistaril has a hard time visualizing the value of spending extra time with patients ("stack and whack", etc.), and sees this as a luxury driven by lazy and greedy doctors who want to work less for the same money, as opposed to doctors who want to provide better care for their patients and not do this at a loss. Also, he assumes that all patients know about the variability in quality/time spent. If that were true, then, yes, why wouldn't patients be flocking to cash-only psychiatrists? The fact is that they mostly don't know. This will probably change significantly as physicians from other specialities such as primary care and other non-procedure-based specialties move in larger numbers toward cash-only practices, which will tend to change the culture and perception.

 

[F0nzie]

As many of you guys know, the CPT codes for 2013 changed. As psychiatrists, we provide mostly E/M and rely on the add-on codes if we wish to provide psychotherapy.

Here is data from my area that I pulled directly from the AMA CPT site:

Psychotherapy 30 min: 90832 = $62
Psychotherapy 45 min: 90834 = $80
Psychotherapy 60 min: 90837 = $117.72

Psychotherapy add-on 30 min: 90832 = $41
Psychotherapy add-on 45 min: 90834 = $67
Psychotherapy add-on 60 min: 90837 = $108

As you can see, we get paid less for using the add-on codes. Reimbursement is important for patients seeking out-of-network benefits. If you are running a private pay/out-of-network practice, it is better to keep your med management and psychotherapy appointments separate.

 

[PistolPete]

So the E/M psychotherapy add on is not added onto the CPT med management visit? I.e. X dollars for the 99213 visit plus the $41 for 30 minutes of psychotherapy?

 

[F0nzie]

So the E/M psychotherapy add on is not added onto the CPT med management visit? I.e. X dollars for the 99213 visit plus the $41 for 30 minutes of psychotherapy?

You will need to document a 99214 for the add-on to be worthwhile. There is a significant different in payment between a 99213 and a 99214.

I am curious to know what the justification is for the add-on's reimbursing less if we're spending the same face-to-face time in therapy.

 

[strangeglove]

I think the idea is that the total reimbursement with the e/m code and psychotherapy add on code is more that for the psychotherapy code alone. I believe that all visits with a psychiatrist, even those that are "psychotherapy only" can justify some level of e/m, since we are almost always inquiring about symptoms and performing an MSE. Therefore, the total reimbursement would be higher using the add on code compared to the standalone psychotherapy code. Nevertheless, it would be better to get reimbursed more for psychotherapy either way.

 

[285963]

You will need to document a 99214 for the add-on to be worthwhile. There is a significant different in payment between a 99213 and a 99214.

I am curious to know what the justification is for the add-on's reimbursing less if we're spending the same face-to-face time in therapy.

I'm not sure I follow this argument. 90833 can be billed once you hit 16 minutes of therapy, and 99213 E/M codes can be applied as long as you fulfill the appropriate documentation requirements.

We can calculate a per-hour revenue using various coding methods...

Option 1: 99213 + 90833 (add-on 30min) = $68 + $41 = $109 per half hour
Per hour rate = $218

Option 2: 99212 + 90833 (add-on 30min) = $41 + $41 = $82 per half hour
Per hour rate = $164

Option 3: 90832 (stand-alone 30 min) = $62 per half hour
Per hour rate = $124

Option 4: 90834 (stand-alone 45 min) = $80 per 45 min
Per hour rate = $106.67

Option 5: 90837 (stand-alone 60min) = $117.72 per 60 min
Per hour rate = $117.72

I'm using E/M reimbursement rates from this site: http://americanmedicalsystems.com/calculator/calculator.aspx

The highest revenue you can draw comes from using your time to bill E/M plus psychotherapy add-on. From a purely financial perspective, I'm not sure why you would ever just bill stand-alone psychotherapy time other than (1) for the purposes of better patient care with more frequent therapy; and (2) Insurance companies probably won't reimburse you for E/M codes on the same patient twice a week. And for that reason psychotherapy stand-alone time is worth more than add-on time so that there is some ability to make up that lost revenue since you're not doing E/M services.

 

[vistaril]

This has more to do with perception than with the actual math of how much patients pay out of pocket. The vast majority of patients look for psychiatrists through their insurance, since they usually don't see psychiatrists as somehow different from other doctors who they are used to finding through their insurance. They are also not aware of all the things we talk about here relating to good psychiatrists and bad psychiatrists, or even know what psychotherapy is. To them, a doctor is a doctor, and maybe it is better if they are Jewish or Indian or are closer to work or whatever. There is a segment of the population, however, that is very keenly aware of the value of a "good" psychiatrist, i.e. a psychiatrist who is attentive and empathic, is able to integrate psychosocial and medical approaches and, most importantly, who spends time with you. These may be people who have been "through the ringer" of in-network psychiatrists and may not have felt comfortable with anyone (again, due to time constraints more than anything else), or who have knowledgable relatives, or who "want the best", or whatever. These are also people who go to Google to find psychiatrists, as opposed the back of their insurance card. In places like NYC, this is actually part of the culture, i.e. everyone "knows" that it is hard to get good psychiatric care with insurance only (again, this is all about perception, not the reality). This is why the cash-only model tends to work better in such places, not because patients are wealthier. As Sluox is saying, the economics actually make a fair amount of sense if patients are willing to pay a little extra to get the care that they think they deserve. It's just that patients aren't really aware of what they deserve. I think Vistaril has a hard time visualizing the value of spending extra time with patients ("stack and whack", etc.), and sees this as a luxury driven by lazy and greedy doctors who want to work less for the same money, as opposed to doctors who want to provide better care for their patients and not do this at a loss. Also, he assumes that all patients know about the variability in quality/time spent. If that were true, then, yes, why wouldn't patients be flocking to cash-only psychiatrists? The fact is that they mostly don't know. This will probably change significantly as physicians from other specialities such as primary care and other non-procedure-based specialties move in larger numbers toward cash-only practices, which will tend to change the culture and perception.

I think you touched on part of the problem as I see it.....most patients look for psychiatrists through their insurance, and many patients simply don't know a lot about anything. These two things come together to create a market where most places the number of insurance based stack and whack psychs is always going to be much greater than the 1 hr therapist psychs. I would also add a third problem- pts just want to pay as little as they can.

 

[Silent Cool]

I am starting this thread because every so often a medical student or a resident will ask "how realistic is it to start a cash practice?". Throughout residency almost every colleague resident I have known has been talking it up like it's the best thing since sliced bread but very few truly know what it's about or actually follow through with it. I hear lots of scheming but NO ACTION. I do not have the answer to this thread... yet. But I am determined. My current answer is maybe, but I don't have a freaking clue. I will do my best to stay objective, not exaggerate, and post both the good and the bad as it comes my way.

SO LET'S DO THIS!!! I just graduated residency last month. I have been interested in private practice ever since I was an intern. I had dreams of autonomy, freedom from insurance companies, and delivering the best possible care to my patients.

I started by learning some fundamentals in marketing by doing a lot of research online. I also learned some basic html and web development concepts. These tools which everyone has available to them is as easy as going online and doing a search and taking the time to learn. With this information I was able to schedule a handful of patients 1 month before residency ended in a completely different city with zero contacts.

Now I have been in business for 19 days. I just caught up on all of my accounting tonight. Tracking my income and expenses: 2k income and 8k in expenses. I spent several thousand in office furniture. I have already paid for 1 year in rent, internet, fax, malpractice, etc. I'll be happy to break even during the first year just to get a feel for this practice model.

The patients so far have been quite respectful and courteous. A few seem a bit needy, but that's where having extra time available to address those concerns is very helpful. I am very satisfied with the patient interactions so far. The patients seem to be getting what they want out of treatment.

I will admit, the networking has been quite stressful, along with everything else-- particularly setting up the office and troubleshooting the printer and the EMR. Competing for such a small market share has been scary. Most of my cases sent my way have been complex med management and NO THERAPY . The competition seems fierce with psychiatrists and therapists already established in the cash market and in their own circles trying to fend off insurance based practices and large healthcare organizations. I feel like a small fish swimming in a sea of sharks!

More to come...

Fonzie,

Why would someone pay cash for your Psych services when most psych services are covered by insurance? I saw a Psychiatrist once and made sure that he/she took my insurance. If that person would not take my insurance, I kept searching until I found one who did. Most private insurance covers psych services (and in a fairly good amount). So why would someone pay cash for Psych services? I've ready this forum quite a bit and I always hear about opening a cash practice. I don't know anyone who has ever paid cash for psychiatric services. Personally, I never would.

thanks

 

[digitlnoize]

Fonzie,

Why would someone pay cash for your Psych services when most psych services are covered by insurance? I saw a Psychiatrist once and made sure that he/she took my insurance. If that person would not take my insurance, I kept searching until I found one who did. Most private insurance covers psych services (and in a fairly good amount). So why would someone pay cash for Psych services? I've ready this forum quite a bit and I always hear about opening a cash practice. I don't know anyone who has ever paid cash for psychiatric services. Personally, I never would.

thanks

Usually it's because of the severe shortage of psychiatrists. Supply and demand. I don't know how it is in AZ, but around here, it's at least a six month wait to see an adult psychiatrist with insurance. Longer for kids.

In many areas that makes the demand high enough that psychiatrists can just charge cash. Especially if your market can afford it, and especially in child.

The shortage is SEVERE, and only getting worse. 70% of psychiatrists work 40h/wk or less, and 55% of psychiatrists are over 55 yo. The number of practicing psychiatrists has been stagnant for decades as the population has grown.

Now, a cash practice will grow more slowly. Open an insurance based practice and you'll have a full schedule in a month. Cash, from what I've heard, takes more like 6-12 months to fill a full schedule.

 

[markglt]

fonzie....good stuff....keep it coming.
This is invaluable info for us in training that don't get squat in what the real world looks like....Starting a pracitce seems like a lot of work...i assume the benifits are you are your own boss.... but why not just join a group....is the autonomy and earning potential that less? I have no idea what joing a group toatally entails, how you get pateints, how you get paid, who you answer to, buying in etc.. I just know i value autonomy alot, maybe bc im still a resident..And i can't see making over 200k after taxes needed for my expectations/needs in life....i suppose that could change, however. I guess my question is why not just join a group...

If you open an insurance based practice how much can you anually earn, if you worked 9-5 and every other sat. or is that a ridicoulous question..

 

[Silent Cool]

Usually it's because of the severe shortage of psychiatrists. Supply and demand. I don't know how it is in AZ, but around here, it's at least a six month wait to see an adult psychiatrist with insurance. Longer for kids.

In many areas that makes the demand high enough that psychiatrists can just charge cash. Especially if your market can afford it, and especially in child.

The shortage is SEVERE, and only getting worse. 70% of psychiatrists work 40h/wk or less, and 55% of psychiatrists are over 55 yo. The number of practicing psychiatrists has been stagnant for decades as the population has grown.

Now, a cash practice will grow more slowly. Open an insurance based practice and you'll have a full schedule in a month. Cash, from what I've heard, takes more like 6-12 months to fill a full schedule.

Interesting. I grew up in a major metro on the west coast and there were plenty of Psychiatrists there. Must be a regional thing.

 

[vistaril]

Interesting. I grew up in a major metro on the west coast and there were plenty of Psychiatrists there. Must be a regional thing.

I've lived in several different places and the dominate model is insurance based for > 90%(easily) of psych services provided. So yeah I definately agree with where you are coming from.

I also don't think there is much of a relationship between supply, demand, and cash pay vs not. Especially supply. Because in a lot of areas where I suspect cash pay is more common(for therapy services) like nyc, san fran,etc they are areas with some of the highest psych/pt ratios around. And in areas that are barren of psychiatrists, cash pay psychiatry is almost unheard of.

 

[nitemagi]

I've lived in several different places and the dominate model is insurance based for > 90%(easily) of psych services provided. So yeah I definately agree with where you are coming from.

I also don't think there is much of a relationship between supply, demand, and cash pay vs not. Especially supply. Because in a lot of areas where I suspect cash pay is more common(for therapy services) like nyc, san fran,etc they are areas with some of the highest psych/pt ratios around. And in areas that are barren of psychiatrists, cash pay psychiatry is almost unheard of.

1. The economics has to support it (rural areas with no psychiatrists don't always have the $$ to pay OOP)
2. There is benefit to offering niche foci above just simple med mgmt, or offer more availability than a traditional clinic. Offering therapy plus meds, expertise in particular areas, subtypes of therapy, etc., are all models for building a cash PP in an urban area, even those "saturated."

Therefore "supply" depends on whether all psychiatrists are lumped together, or whether one could break services into subtypes offered, in which case it's rarer for specific services to be offered. The presumption is that all are created equal, which they aren't. This is also where word of mouth/reputation weighs in, as those who are better than average will get more referrals. Theoretically.

 

[vistaril]

1. The economics has to support it (rural areas with no psychiatrists don't always have the $$ to pay OOP)
2. There is benefit to offering niche foci above just simple med mgmt, or offer more availability than a traditional clinic. Offering therapy plus meds, expertise in particular areas, subtypes of therapy, etc., are all models for building a cash PP in an urban area, even those "saturated."

Therefore "supply" depends on whether all psychiatrists are lumped together, or whether one could break services into subtypes offered, in which case it's rarer for specific services to be offered. The presumption is that all are created equal, which they aren't. This is also where word of mouth/reputation weighs in, as those who are better than average will get more referrals. Theoretically.

agree with this. I just think psychiatrists who don't have a niche or any special skills are much more common than those that do.

 

[F0nzie]

If you open an insurance based practice how much can you anually earn, if you worked 9-5 and every other sat. or is that a ridicoulous question..

I think Medscape's recent survey was around 200k. $300/hour if you see 3 patients an hour then subtract your overhead?

The benefit with contracting with insurance companies is you get to go after the big piece of pie where money will always be coming in. The question is how busy do you want to be?

 

[F0nzie]

Fonzie,

Why would someone pay cash for your Psych services when most psych services are covered by insurance? I saw a Psychiatrist once and made sure that he/she took my insurance. If that person would not take my insurance, I kept searching until I found one who did. Most private insurance covers psych services (and in a fairly good amount). So why would someone pay cash for Psych services? I've ready this forum quite a bit and I always hear about opening a cash practice. I don't know anyone who has ever paid cash for psychiatric services. Personally, I never would.

thanks

I am just starting to understand why reputation is so important. We have been developing excellent relationships in the community and providing "high intensity" care for individuals with very complex issues and getting positive results. People find value in this and when they hear about it they are willing to pay out-of-pocket. We have already abandoned the 30 min med check for child patients because it is not enough time to address their issues.