Independent Contractor Practice...

[MedZeppelin]

Advertisement - Members don't see this ad

Any thoughts, or experience, with an independent contractor model of practice within a hospital system? I've been offered a position within a hospital to set up a pain program using their space, staff and equipment, but I remain private practice and I only bill professional fees.
Overhead would be malpractice, health insurance, and my own biller. Seems like a fairly low overhead way of developing a practice, vs. totally solo-office based?
Any experiences, pros, cons?
Thank you!

 

[bedrock]

Con is you don't get the facility fee which is where you make all your money beyond a PCP salary. The hospital will make 5 times as much as you in this scenario.

 

[MedZeppelin]

That's a good point, but i would assume the professional fee for doing my RF's, stim trials, etc. would still bring in pretty good revenue? Especially with minimal overhead...?

 

[Taus]

Pro fee only on those is still not much. For the additional time it takes to do stim/rf, you make approx same amount as if doing several esi during that same time.


Sent from my iPhone using SDN mobile app

 

[MedZeppelin]

Thank you for the info! Any idea where I could see those professional fees to do some pro forma calculations? Asipp fee schedules perhaps?

 

[bedrock]

Thank you for the info! Any idea where I could see those professional fees to do some pro forma calculations? Asipp fee schedules perhaps?

check ASIPP, that is good information.

Personally, I'd consider working for that hospital on an RVU system as many guys here do very well financially that way.

If want to be completely independent, the hospital should pay for everything else including your biller. Obviously they pay for all supplies office and medical. Your rent should be quite low, not silly low like $5 a month which is illegal, but low.

If are independent contractor they can't pay your health insurance or malpractice, however they could use their leverage with whoever they contract with for you to get both those items at bargain rates.

Remember that you and they both know they will make a killing on the facility fees (also listed at ASIPP), so they should bend over backwards to eliminate or reduce your costs if you go the independent route.

 

[hyperalgesia]

That's a good point, but i would assume the professional fee for doing my RF's, stim trials, etc. would still bring in pretty good revenue? Especially with minimal overhead...?

Hmm I actually like this arrangement... I prefer my own biller. My staff will need access to the hospital EMR. I would like an administrative office and a director stipend please and thank you.

I like this arrangement because you retain the most important thing - autonomy, you get referrals and a committed partner, you indirectly get to participate in the SOS differential benefit, your profit is dependent on your work, a lot of good points. I would just try to offset the profit disparity between you and the hospital with a director stipend. If that's legal - which I'm not sure about.

 

[BobBarker]

I like it too. You can set up a few ancillaries probably too which employed docs don't usually get to do. You can also do a self employed 401k (easy to do) for you and your office manager (aka spouse) and a profit sharing plan (complicated, but I understand is lucrative). Deduct your company automobile, computer, iPad, projector, etc as business expenses. Could be awesome.

 

[pastafan]

Very state dependent regarding pro fees from commercial insurers. Can be a multiple of Medicare or a small percentage above Medicare rates. Payor mix also is important.

 

[Ducttape]

agree, but i think payor mix is most important, as is the primary insurance that is from the main referral base.

find out to the best of your ability what percentage of the current hospital system is medicaid, and whether you have some control in determining the mix of medicaid with other insurances.

medicaid is dead weight financially, and one of the reasons the hospital with high percentage medicaid wants you to be an independent contractor is that the reimbursement from medicaid is so poor.

 

[DOctorJay]

Agree with ducttape. If you're going to be seeing caid and can't limit the amount you see then it'll be better to go wRVU.


Sent from my iPhone using SDN mobile

 

[drpainfree]

agree, but i think payor mix is most important, as is the primary insurance that is from the main referral base.

find out to the best of your ability what percentage of the current hospital system is medicaid, and whether you have some control in determining the mix of medicaid with other insurances.

medicaid is dead weight financially, and one of the reasons the hospital with high percentage medicaid wants you to be an independent contractor is that the reimbursement from medicaid is so poor.

very good point! would be a deal breaker for me

 

[drusso]

Staying independent would be preferred as long as you get to choose your patients.

 

[MedZeppelin]

Thank you all for the input! Very appreciated! Yes, being independent is the #1 reason to be an IC. I've been employed and I've been solo, and this seems like a reasonable hybrid model of the two. I feel that pain, more than any other specialty, necessitates being in control of your patient selection and volume.
I would definitely limit Medicaid to a certain quota, and make that clear upfront. It can seem to be a little tricky with Stark laws, but can be a legitimate relationship.
Thanks again!...

 

[hyperalgesia]

I don't know if you run into Stark here. When it comes to "office" space, isn't the hospital supposed to charge fair market value for that - unless you are employed? And they're supposed to charge you for staff too. Doing otherwise, providing free facilities and staff, how is that not inducement?

 

[AKMD_1984]

i tried running the numbers with that and it did not seem sustainable to be completely solo in the beginning...too much financial risk...i felt that a better strategy would be hospital employment with a farket market value compensation, and then "option to go independent" when the contract expires. this allows you to be independent, avoid the non compete and take a full census of patients to your pp where you can do procedures in clinic. for procedures requring IV sedation (or US if not in clinic), etc...take to hospital.

 

[MedZeppelin]

The hospital would rent space at fair market value, but that could possibly be just your personal office space and an exam room, for example.
I agree that revenue may be "tight" in the beginning, but isn't that the way it goes with any private practice venture?
I would think the financial risk would be less so than a complete solo practice, since your overhead is significantly reduced (no equipment, staff, facility)?
Thanks.

 

[AKMD_1984]

The hospital would rent space at fair market value, but that could possibly be just your personal office space and an exam room, for example.
I agree that revenue may be "tight" in the beginning, but isn't that the way it goes with any private practice venture?
I would think the financial risk would be less so than a complete solo practice, since your overhead is significantly reduced (no equipment, staff, facility)?
Thanks.

the revenue will not be tight once you transition from employment to pp with a full census of patients, compared to seeing 0-10 patients daily first few months in pp and also having to pay rent, staff salaries, ehr cost, malpractice etc. its not just the volume, rather QUALITY of patients you want to see which you can control while employed.
Of course you can advertise yourself as a pain doc and you will have 100 patients line up first week if you are liberal with rx. But to start a good multidisciplinary and interventional practice and find patients who will agree with your plan of minimal narcotics, will be hard or almost impossible to do on your own, esp. if there is a lot of competition. So hospital is still where you get volume.
I also find that its much harder to practice as a solo PP physician because it takes a long time to get medical records, review data and get an overall impression about the patient if the EHR is not linked.
Besides the upfront cost of starting a PP, if you are doing procedures at the hospital, you cannot see patients in clinic in between...its not an efficient model vs.an independent clinic practice. the hospital will still generate facility fee from your work, you will get your professional fee - which isnt that much. By doig procedures at the hospital you will have to be away from clinic when you can be seeing patients and increasing volume for your own revenue.

Another interesting contract that i came across is with this solo GI doctor...he does his scopes at the hospital (30-60 a week). he has his own S Corp with 15 staff, and 3 PAs - that he pays for. because he does his procedures at the hospital vs. privately held ASC (which is also available to him), to compensate, the hospital gives him a lot of money to be on call everyday ($2000/ 24h)...this essentially appropriately compensates for his service and procedures at the hospital while avoiding kickback to him directly. Hospital is OK with it, since its a major source of revenue for the hospital. He of course takes the professional fees, compensation from all consults in clinic etc also.

 

[MedZeppelin]

Thank you for the input! Just a little background about me, I've been practicing in the area of this practice model for several years and appear to have a fairly large following of good patients that would follow me, thankfully. So that may help build up the practice rather quickly. And yes, agreed, I have a reputation for multidisciplinary interventional pain, so those patients and future ones would know what that entails.
Thanks!

 

[drusso]

Another interesting contract that i came across is with this solo GI doctor...he does his scopes at the hospital (30-60 a week). he has his own S Corp with 15 staff, and 3 PAs - that he pays for. because he does his procedures at the hospital vs. privately held ASC (which is also available to him), to compensate, the hospital gives him a lot of money to be on call everyday ($2000/ 24h)...this essentially appropriately compensates for his service and procedures at the hospital while avoiding kickback to him directly. Hospital is OK with it, since its a major source of revenue for the hospital. He of course takes the professional fees, compensation from all consults in clinic etc also.

Yeah, paying doctors over-market for on-call duties is not legal either...but I know that it happens and it is a shame. Large physician employers are shady.

 

[AKMD_1984]

Yeah, paying doctors over-market for on-call duties is not legal either...but I know that it happens and it is a shame. Large physician employers are shady.

Not necessarily, because a private entity can negotiate any rate they please, esp. if there is a demand and if its an undeserved area.
$1500-$2500/ 24h for call coverage is not uncommon in my area - which is what he is doing. 24 hour call service IS provided.
Similarly, I am friends with neurologist near Scranton, PA, and he does locums coverage for Giesinger at a rate not too far from that for weekend coverage.
I was seeing if this can be applied to pain, but I do not think any hospital will pay that much unless the hospital requires a lot of inpatient coverage, like GI and neurology.