How much revenue do psychiatrists on average generate?

[freaker]

I was a little baffled by looking up a Merrit-Hawkins survey that revealed that the average psychiatrist generated $1,302,631 and received a compensation of $224,000.

http://www.merritthawkins.com/uploadedFiles/MerrittHawkins/Pdf/mha2013revenuesurveyPDF.pdf

This data didn't seem to jive with what I've heard in discussion, which was that psychiatrists were generally quite unprofitable. Granted, compensation does not equal profitability, as there is far more overhead, particularly with an inpatient unit. That said, psychiatry seemed to generate more revenue relative to income than numerous other medical fields. To the point that one psychiatrist generated the revenue of two neurologists but got paid less. ???

Thoughts?

And on a more pratical level, what kind of revenue could an outpatient psychiatrist seeing patients every 20-30 minutes with hour-long evals and covering 25 patients on an inpatient unit every 5th week (say 10 times per year) expect to generate?

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[billypilgrim37]

I was a little baffled by looking up a Merrit-Hawkins survey that revealed that the average psychiatrist generated $1,302,631 and received a compensation of $224,000.

Well, on the inpatient unit we would get paid a lot more if we wanted to do all the nursing, milieu therapy, social work, care management, billing, cooking meals, taking out the garbage, fixing the light bulbs, seclusions, restraints, et al by ourselves!

 

[notdeadyet]

Well, on the inpatient unit we would get paid a lot more if we wanted to do all the nursing, milieu therapy, social work, care management, billing, cooking meals, taking out the garbage, fixing the light bulbs, seclusions, restraints, et al by ourselves!

Bite your tongue. I already found myself doing more of most of those things than I'd expected...

 

[freaker]

Well, on the inpatient unit we would get paid a lot more if we wanted to do all the nursing, milieu therapy, social work, care management, billing, cooking meals, taking out the garbage, fixing the light bulbs, seclusions, restraints, et al by ourselves!

Well, certainly other professions have similar expenses. Every inpatient unit has a social worker or two, nurses, meals, sanitation, maintenance and other ancillary staff. And yes, snow shovelling. I think that was a big one for either you or whopper.

It was just interesting to see that psychiatry actually generated that degree of revenue relative to income and that this survey also included outpatient work.

I was more selfishly interested in the question, which caused me to look into the data myself due to a job offer that offered X-percentage revenue generated over a base salary. I truthfully am less familiar with that actual number as I perhaps should be and could generally estimate this by estimating 99213s and 99214s as a percentage of a practice and multiplying these out over the course of a year.

That's why I mentioned the standard 40 hour work week and covering the inpatient unit.

 

[whopper]

I'm finding those numbers suprising but not impossible. Many of the things that happen in an office or hospital is the doc generates the income, but a lot of that money goes to the department to pay for overhead. Yeah, some of that overhead is complete BS where a bunch of people that don't do their jobs well and feast off the money you brought in. Some of this money also keeps the status quo up to docs that completely suck that the department isn't going to fire.

But a lot of is goes to staff members that you need that do their jobs very well.

I did find that the doctor getting only a relatively small fraction of the salary suprising. I thought it'd be higher cause in private practice, a realistic number is 70%+ of you keeping what you brought in.

 

[Leo Aquarius]

If you think the pay differential for a psychiatrist is bad, then you'll think the pay differential for a neurosurgeon is outrageous. One neurosurgeon I shadowed (in the days I wanted to do neurosurgery) in NY would often gripe about how much the hospital was making off him, and that his salary didn't feel that big in light of this.

From what I remember the hospital was making over 10 million a year from his brain surgeries and gamma knife procedures, and his salary was around $500,000. Talk about glass half empty.

 

[michaelrack]

And on a more pratical level, what kind of revenue could an outpatient psychiatrist seeing patients every 20-30 minutes with hour-long evals and covering 25 patients on an inpatient unit every 5th week (say 10 times per year) expect to generate?

I imagine it would be much less than inpt because there will be less lab/imaging revenue generated, also don't forget about hospital room charges.

 

[digitlnoize]

And on a more pratical level, what kind of revenue could an outpatient psychiatrist seeing patients every 20-30 minutes with hour-long evals and covering 25 patients on an inpatient unit every 5th week (say 10 times per year) expect to generate?

This isn't terribly hard to calculate. A level 3 visit pays ~$70 give or take. So...

$70 x 3 visits per hours (every 20 minutes) = $210/hr

$210/hr x 40 hr/wk = $8400/wk

$8400/wk x 48 wk/yr (4 wks vacation) = $403,200.

Now, keep in mind that there will be no shows and you won't have 100% collections. Also, this is before expenses (rent, employees, etc).

Still, I'd say ~$350k-400k per psychiatric provider is a reasonable estimate of yearly billings if they're working full time.

 

[michaelrack]

Just want to point out that we are discussing 2 separate issues on this forum 1) The revenue a psychiatric practice/doctor can generate for itself and 2) the revenue a psychiatric practice/doctor can generate for a hospital.

1) is basically billing for seeing patients

2) includes #1 plus all revenue from lab tests, brain scans, etc the doctor orders (and is done by the hospital)

 

[whopper]

ECT can also pull in a heck of a lot of money, though the guy that does it at the hospital I'm at hardly makes anything off of it cause the hospital takes almost all of it in.

 

[freaker]

This isn't terribly hard to calculate. A level 3 visit pays ~$70 give or take. So...

$70 x 3 visits per hours (every 20 minutes) = $210/hr

$210/hr x 40 hr/wk = $8400/wk

$8400/wk x 48 wk/yr (4 wks vacation) = $403,200.

Now, keep in mind that there will be no shows and you won't have 100% collections. Also, this is before expenses (rent, employees, etc).

Still, I'd say ~$350k-400k per psychiatric provider is a reasonable estimate of yearly billings if they're working full time.

You're right, it's not complicated hypothetically. In my situation, I'd be seeing kids, as well, which is just going to take longer--maybe 30 minutes per appointment. With that extra time, I think it sounds reasonable to be adding some 90833 add-ons in negotiating that rocky divide between parent and child and dealing with parent issues. You're obviously going to have level 4s in that mix.

At the hospital system I'm looking to work for, they do accept medicaid patients into the outpatient clinic. The level 3s there pay roughly $55 and $80 for a level 4. A psychotherapy add-on is roughly 45. So it complicates matters a bit. Then the private mix.

With the contract I'm looking at, I'd be keeping 55% of what the hospital collects from my services over a number in the low 200s, with a gradual increase in that percentage in increments of Xk dollars. I just wanted to see if it sounded reasonable to expect to being bringing in some of those productivity numbers. They seemed pretty reachable to me, but truthfully, residency training has done precious little to help us work with us on the pragmatics of billing.

 

[digitlnoize]

You're right, it's not complicated hypothetically. In my situation, I'd be seeing kids, as well, which is just going to take longer--maybe 30 minutes per appointment. With that extra time, I think it sounds reasonable to be adding some 90833 add-ons in negotiating that rocky divide between parent and child and dealing with parent issues. You're obviously going to have level 4s in that mix.

At the hospital system I'm looking to work for, they do accept medicaid patients into the outpatient clinic. The level 3s there pay roughly $55 and $80 for a level 4. A psychotherapy add-on is roughly 45. So it complicates matters a bit. Then the private mix.

With the contract I'm looking at, I'd be keeping 55% of what the hospital collects from my services over a number in the low 200s, with a gradual increase in that percentage in increments of Xk dollars. I just wanted to see if it sounded reasonable to expect to being bringing in some of those productivity numbers. They seemed pretty reachable to me, but truthfully, residency training has done precious little to help us work with us on the pragmatics of billing.

For that, I would say you're looking at:

(55+45)+(55+45)+(55+45)+(80+45) / 2 = 205/hr (that's with 1 level 4 visit every 2 hours, get it?)

205/hr isn't far off from my earlier quoted number of $210. You could get an extra $4 if you're seeing kids, don't forget, by adding on that 90785 code for "interactive complexity" for dealing with family members. Only pays an extra $4, but hey, that's $4 you didn't have before. So that's $209/hr. Close enough.

The biggest problem I see is that you're pulling in extra $$$ based on collections...and seeing Medicaid. So, there's probably going to be lots of losses on the books. I'd count on a moderate-high no-show rate and a high percentage of non-payers. That could significantly eat into your bonus money, but it's hard to tell, you'll probably have to try it and see...

 

[Silent Cool]

If you think the pay differential for a psychiatrist is bad, then you'll think the pay differential for a neurosurgeon is outrageous. One neurosurgeon I shadowed (in the days I wanted to do neurosurgery) in NY would often gripe about how much the hospital was making off him, and that his salary didn't feel that big in light of this.

From what I remember the hospital was making over 10 million a year from his brain surgeries and gamma knife procedures, and his salary was around $500,000. Talk about glass half empty.

And this is the problem with hospital employment (ie, someone else is making money off of you). Realistically, that neurosurgeon should be making ~5mil (50% overhead). Instead, all physicians who operate under a hospital employment structure will give more and more of their bread to the 'useless overhead' (read: hospital executives, etc..).

*sigh*

 

[Shikima]

So my question to this overall process is this - how does one avoid the tax burden from being on W2 (employed) by negotiating for some of this work to be done on 1099? Taxes are a biggie to consider with this employed process.

Private (solo) practice is a no brainer. But when employed by a hospital, there must be a way to stave off some of those tax burdens.

 

[michaelrack]

So my question to this overall process is this - how does one avoid the tax burden from being on W2 (employed) by negotiating for some of this work to be done on 1099? Taxes are a biggie to consider with this employed process.

Private (solo) practice is a no brainer. But when employed by a hospital, there must be a way to stave off some of those tax burdens.

Good question. Advantages of W2: employer pays half of social security/medicare. Advantages of 1099: greater ability to deduct expenses. Ideally (in an employed situation), you would get W2 income at least up to the point that you max out social security contributions. Ideally, you would get enough 1099 income to write off expenses against.

Years ago, when I was at a university, I got w2 income for my main psychiatry position, but got 1099 income for many of the sleep studies I read.

So, to answer your question, you need to find some "side job" within the hospital or some type of activity that you could get 1099 income from.

 

[Shikima]

Good question. Advantages of W2: employer pays half of social security/medicare. Advantages of 1099: greater ability to deduct expenses. Ideally (in an employed situation), you would get W2 income at least up to the point that you max out social security contributions. Ideally, you would get enough 1099 income to write off expenses against.

Years ago, when I was at a university, I got w2 income for my main psychiatry position, but got 1099 income for many of the sleep studies I read.

So, to answer your question, you need to find some "side job" within the hospital or some type of activity that you could get 1099 income from.

How could you generate 1099 income while employed with a hospital? All clinical encounters are counted towards productivity while revenue from PSG reading is considered 1099? Doesn't seem like the numbers would balance each other out in the long run, when using my particular narrow focused example.

 

[michaelrack]

How could you generate 1099 income while employed with a hospital? All clinical encounters are counted towards productivity while revenue from PSG reading is considered 1099? Doesn't seem like the numbers would balance each other out in the long run, when using my particular narrow focused example.

I don't think that you personally have that option of 1099 income. I don't want to reveal any private info that you have previously shared with me, so shoot me a PM if you have any questions.

 

[Shikima]

I don't think that you personally have that option of 1099 income. I don't want to reveal any private info that you have previously shared with me, so shoot me a PM if you have any questions.

 

[PsyDNaut]

I typically do 10-15 minute appointments more than I do 20-30 minute appointments. So while he's giving you a guesstimation keep in mind it can vary quite a lot. Especially if you have a built up clientele of people who check back monthly for medicine. However, this shouldn't be your primary concern for psychiatry.. The field is far more suited for research than pathogenesis.

 

[gibits]

I always thought psychiatry departments were notorious at bleeding money. Which was why many hospitals (in the SoCal area at least) have shut down their psych programs. Cedar Sinai seems to be the latest one. Or is that just for Medicare/Medicaid/uninsured? I think the only inpatient facilities in LA still open are UCLA and USC. Still have private hospitals like Kaiser around, not sure if they pull a decent profit.

 

[notdeadyet]

I always thought psychiatry departments were notorious at bleeding money. Which was why many hospitals (in the SoCal area at least) have shut down their psych programs.

I know its semantics, but when I hear "bleeding money," I think of waste.

Many-to-most academic inpatient psych units with a public focus are non-profitable because a high percentage of the patients are uninsured or underinsured.

When I can't scrape together bus fare without lifting couch cushions, it's because I'm strapped, not because I'm bleeding money, you know?

 

[DebDynamite]

I am still improving my coding skills and there are always the coders who review (and up-code?) our work, so possibly the revenue is correct. With what a hospital will pay a locums psych per diem (1500 if you know how to work it in my area and have the experience), I would guess that number is correct. As far as the take-home (before taxes) that's about rigt for me, but that's one 40-ish FT gig plus one moonlighting job. Also it's an average right? Some of us work a lot more, some a lot less.

 

[Shikima]

I am still improving my coding skills and there are always the coders who review (and up-code?) our work, so possibly the revenue is correct. With what a hospital will pay a locums psych per diem (1500 if you know how to work it in my area and have the experience), I would guess that number is correct. As far as the take-home (before taxes) that's about rigt for me, but that's one 40-ish FT gig plus one moonlighting job. Also it's an average right? Some of us work a lot more, some a lot less.

Coding is pretty easy for OutPt - Just do your standard note, 99213. If you order any kind of lab testing (EKG, VPA, etc) then it becomes a 99214.

Hope this helps.

 

[gibits]

I know its semantics, but when I hear "bleeding money," I think of waste.

Many-to-most academic inpatient psych units with a public focus are non-profitable because a high percentage of the patients are uninsured or underinsured.

When I can't scrape together bus fare without lifting couch cushions, it's because I'm strapped, not because I'm bleeding money, you know?

And yet many psych patients are indigent. Which is why I just don't see how psych departments pull any real profits for a hospital.
And when I say "bleeding money" I mean a lose in revenue. My residency was only still in operation because the county was flipping the bill.

 

[digitlnoize]

Coding is pretty easy for OutPt - Just do your standard note, 99213. If you order any kind of lab testing (EKG, VPA, etc) then it becomes a 99214.

Hope this helps.

It can be that easy, but that's not ideal. You're missing a good chunk of revenue if you bill that way. If the pt and note meets criteria for a level 4, you can (and should) get it without needing labs, etc.

 

[Shikima]

It can be that easy, but that's not ideal. You're missing a good chunk of revenue if you bill that way. If the pt and note meets criteria for a level 4, you can (and should) get it without needing labs, etc.

Do tell... because I'm not getting indication from my billers on this.

 

[digitlnoize]

Do tell... because I'm not getting indication from my billers on this.

You should find everything you need here: http://psychiatry.org/cptcodingchanges

In particular, this chart is super helpful: http://psychiatry.org/File Library/Practice/Managing a Practice/CPT/EM-Coding-Summary-Guide-v3.pdf

Basically, you need 2/3 components. For a 99214 (established patient), your billers are trying to get you a level four using "medical decision making" as one of your 2 components. Forget this. It's much easier to document appropriately for the other 2 domains, HPI and ROS.

For a 99214, you need a "detailed HPI", which includes 4 elements (OLDCARTS, onset, location, duration, etc) of history, 1 element of PFSH (smoking, drinking, easy for us), and at least 2 systems reviewed). You also need a "detailed exam". This means 9 bullet points. You have to DOCUMENT all this. For example:

CC: Depression

HPI:
Pt is a 35yo F with a hx of major depressive disorder which began at age 21 (Onset), and has had several relapses since that time. Currently, she complains of depressive symptoms for the last 3 months (Duration). The symptoms are constant (timing), and have been improved somewhat on Prozac (modifying factors). She reports poor sleep, SIG E CAPS (associated sx). [you now have 4 HPI]

Social Hx:
She continues to smoke 1 ppd, but denies EtOH. (social hx, 1 element, check)

ROS (only need 2, here's 3):
Cardiac: She denies CP, denies palpitations
Psychiatric: SIGECAPS
Neurologic: Reports headaches, denies seizures, denies change in vision.

Exam (need 9 total bullets):
VS: Ht 5' 3", Wt. 156 lb, RR 16 (3 vs = 1 bullet
Constitutional: Appears stated age, NAD, appropriately groomed (appearance 1 bullet)
Psychiatric: Full MSE ( see chart) 10 bullets

That's it. You've got all your criteria.

You CAN choose to use MDM instead of HPI or Exam if you want. If you do this, you need Moderate level, which you can also get without labs. To do this you'd need "Moderate Risk", which means Prescription Drug Management = done. If you don't manage rx in the visit, you can use 2 or more stable chronic illnesses. You ALSO need 3 "problem points" though, but this isn't that hard either. Each established problem is 1 point if stable or 2 points if worsening. So for this lady: MDD (stable, improving) = 1 point, Nicotine abuse or dependence = 1 point. Self limited or minor problems are also 1 point each (max of 2), so you could add on another point for headache, insomnia, etc. Or, maybe she has GAD or panic disorder too. Or dependent personality. Or...some other diagnosis. Or 1 medical problem that you talked about it relating to her psych illness.

You can see how MDM is much more variable and difficult to prove. It's possible, but it falls apart on some patient who truly only have 1 diagnosis or something.

Using the other method, you can easily reach level 4 criteria by interviewing, examining, and documenting appropriately, and it doesn't have to add extra time.

Disclaimer: I'm just a resident you know. I know this stuff from working in a crap ton of private practice offices as a med student (DO) where I HAD to know this stuff for my charting while there. I also want my own (profitable) office one day so I'm learning all I can about it now. Also, AMAZING resources on website, as above.

 

[PistolPete]

Thank you so much for that! Very helpful. I've been confused for some time now, since most articles on coding are basic IM/FP typs of exams which don't apply to psychiatry. Very helpful for a typical patient that a psychiatrist will see.

So the majority of my pt's I should bill as 99214, by that logic, if I do a thorough, 30 minute psychiatric exam? With a few 99213's (15 minute basic visit) and few 99215's (new pt, lot of medical decisions, starting new meds etc)??

 

[digitlnoize]

Thank you so much for that! Very helpful. I've been confused for some time now, since most articles on coding are basic IM/FP typs of exams which don't apply to psychiatry. Very helpful for a typical patient that a psychiatrist will see.

So the majority of my pt's I should bill as 99214, by that logic, if I do a thorough, 30 minute psychiatric exam? With a few 99213's (15 minute basic visit) and few 99215's (new pt, lot of medical decisions, starting new meds etc)??

I'd lose the time idea though. The billing criteria are all about what you document. You can easily hit all the criteria for a level 4 visit in a very short appointment. From what I've heard though, it's hard to bill all 4's because then insurers accuse you of "up coding", i.e. documenting to bill...although if you're documenting what you're doing, I don't see the problem. But, they refuse to pay if you're too far above the average.

So, a healthy mix of level 3 and 4 follow ups is appropriate. Maybe 60/40, or 70/30...

 

[michaelrack]

Basically, you need 2/3 components. For a 99214 (established patient), your billers are trying to get you a level four using "medical decision making" as one of your 2 components. Forget this. It's much easier to document appropriately for the other 2 domains, HPI and ROS.


.

Not quite right. The 3 components are History, Examination, and Medical Decision Making. (HPI and ROS are both a component of history; I see later in your post you kind of correct things.)

Also, medical decision making trumps all. Most consider it fraud to bill a level 4 if MDM does not justify it- if you want to bill a level 4 visit, you need level 4 MDM. Your choice is whether to document a level 4 history or a level 4 exam.

 

[digitlnoize]

Not quite right. The 3 components are History, Examination, and Medical Decision Making. (HPI and ROS are both a component of history; I see later in your post you kind of correct things.)

Also, medical decision making trumps all. Most consider it fraud to bill a level 4 if MDM does not justify it- if you want to bill a level 4 visit, you need level 4 MDM. Your choice is whether to document a level 4 history or a level 4 exam.

Yes, sorry. That's what I meant. Just an oversight.

I hadn't heard the MDM rule. It's not mentioned that I saw on the materials provided. The PCPs certainly aren't following it out in the community near me.

 

[honsano]

I've heard MDM trumps from my PD too. She showed me a source talking about it but I forgot where.

There are also recommended time stipulations for 99211-15. I think 99213 is like 10 to 15 minutes and 214 is like 16 to 20 or something. Essentially coding up reduces your ability to document an additional therapy code (90833 which is like 16 min to whatever the number) for a 30 minute session. So you lose out on that end. Ignoring the timing all together can put you at risk for fraud.

PCPs probably get away with coding up because they are not putting add on therapy codes.

 

[michaelrack]

There are also recommended time stipulations for 99211-15. I think 99213 is like 10 to 15 minutes and 214 is like 16 to 20 or something. Essentially coding up reduces your ability to document an additional therapy code (90833 which is like 16 min to whatever the number) for a 30 minute session. So you lose out on that end. Ignoring the timing all together can put you at risk for fraud.

.

I know nothing about billing psychotherapy add-on codes. However, I have a lot of experience billing the 99212, 99213, and 99214 codes in my sleep practice. Timing is irrelevant for non-psychiatrists except in the rare circumstance in which more than half of the visit is spent on counseling (for example, a PCP counseling about Sexually transmitted diseases). In this case the PCP would document (for example) that he spent 29 minutes with the patient, 19 minutes of which was counseling time and briefly document what was counseled. I was told years ago that it is helpful to document the exact clock times for all of this.

 

[beezley]

I'm newly an attending and doing all OP (except when on call). I bill almost entirely 99214 for my follow-ups and do largely 30 minute follow-ups. If there are 2 dx+side effect+managing meds=99214. 3 dx+managing meds=99214. I feel like most everyone I have seen has a mood dx, an anxiety dx and everyone has flipping insomnia AND/OR a substance use disorder so most of my patients meet the level 4 criteria. I do add the 90833 (psychotherapy add-on) when I really feel I provide this service and document as such. Recently met with our coder/biller and she had no concerns about my notes or billing.

Maybe as my patients stabilize I would go to 25 or 20 minute follow-ups but I feel like that would be rough.

The time guidelines as far as my understanding are 15 min for 99213, 25 for 99214 and 40 for 99215. With my more profoundly ill following hospitalization I often spend 40+ minutes with them discussing their dx, med options, etc and bill 99215s based on time. 99215 based on elements is tough.