joining private group practice

[scentofpapaya]

I'm in my final year of training and in middle of job search, was wondering if anyone can give me advice.
I'm looking into different jobs (academic hospital, community clinic, VA, state facility etc)
I mostly want to do outpatient but given that I have to stay in suburb of NYC due to other situations, options seem pretty limited.
One of the places i'm considering is joining a private group practice.
I can't imagine myself just opening my solo private practice right after residency as I know nothing about running my own business, and I'm kind of tired of big hospital setting and dealing with politics and administration so I figured joining a private practice group that is already established is not a bad idea.
I've heard different opinions about this option. Some have told me that they would never work for someone else, others have told me that it's really hard to just go solo right after residency given I would have nobody to help me out to cover for me if I have to leave the practice for day or two.
Anyways, I'm going to meet the person who started/owns the practice, what are some important things that I should ask about in terms of joining a group?
I know that W2 vs 1099 would be a starting point in negotiating. I don't really need any health insurance benefits as I can get them through my spouse. Main thing I would need is some time off for maternity leave... I know this would be an awkward issue for joining a private practice because there is no set policy as opposed to a hospital setting that they would have an established policy regarding maternity leave, sick days, family medical leave and etc.
Any advice would be of great help!

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[TexasPhysician]

Most important thing in a small group practice is getting along with everyone. If you don’t like everyone, you can’t fire them in someone else’s practice. You just have to put up with it. If you work with good people, every day is a joy.

Have them throw out numbers, benefits, etc first. You can always try to negotiate better. If you throw out a low number first, you may short-change yourself. Too high and they may think you aren’t worth wasting time to negotiate lower.

 

[scentofpapaya]

does anyone have any advice on hourly rate or yearly salary for a psychiatrist in NYC suburbs in a private outpatient setting??

 

[dl2dp2]

does anyone have any advice on hourly rate or yearly salary for a psychiatrist in NYC suburbs in a private outpatient setting??

Outpatient group practices are relatively rare in NYC and surrounding areas. Reason being there's very little economy of scale to exploit--there's often no major advantage, say, in renting a room vs. a suite (vs. in rural areas, where it's unusual for part time subleases, etc). Cash also has a very high penetrance--if you are an American grad who went to a reputable residency program, generally you wouldn't take any insurance. If you take a few insurances, you will generally fill extremely quickly and given the low expense ratio, very few people join groups. Purely based on insurance, the current Medicare rate is about $175-$200 for 99213+90833 (this is public information, you can find it on Medicare website). Private insurances have variable reimbursements, but usually comparable to Medicare. So hourly gross revenue will be in the $300-$400 range. Overhead would be about 40-60% if you join a group practice. If you do solo, overhead should be less ~10-15%.

Cash only has lower overhead, often <10%, esp. with low non-reimbursement rates. Cash rates are highly variable depending on your credential, experience, specialty demand, etc, and can go between insurance rates and $1000+ an hour for a specialized consultation.

If you insist on joining a practice, you can do a quick Google search and you will find that almost all the private groups have available positions, and you can call around and compare. It's more common for people to start a facility job and do part time private practice, and once the private ramps up drop the facility job, rather than go in completely into a private group.

 

[TexasPhysician]

Overhead would be about 40-60% if you join a group practice. If you do solo, overhead should be less ~10-15%.

Cash only has lower overhead, often <10%, esp. with low non-reimbursement rates. Cash rates are highly variable depending on your credential, experience, specialty demand, etc, and can go between insurance rates and $1000+ an hour.

While there is likely regional variability, 10% overhead is very difficult to achieve even with cash only. Say I generate $1 million in revenue cash only. I’ll need 2-3 staff to handle call volume, paperwork, faxes, Intake’s, vitals, etc. 2 FT staff is about $70k. Rent even in Texas is $40k/year for decent waiting room, staff area, and a few offices. My rent includes water/waste. Even with a hypothetical $1 million revenue, I’m over 10% overhead already. Credit card fees are about 2%, supplies, internet, electricity, computers, advertising, furniture, cleaning staff, accountant, attorney, business taxes, etc add up.

Group practices in my area generally keep about 30-40%. 30-40% includes added overhead and some profit in exchange for 0 administrative headaches.

 

[Yellow mellow]

I’m in a similar situation only I’ve been working for the VA and state for a few years post grad. I’ve had so much problems dealing with the bureaucracies of an institution that I left. I’ve gotten a few invites to joining private practices. But here are the issues. Assuming that pslf will still be available in five years, both my spouse and I have a combined student debts that is hefty enough to benefit from this government loan forgiveness program. California also pays decent for state employees along with benefits like health insurance,401k, pensions, etc.
I have no clue about private practice and the only thing is is driving me towards it is the Independence. So at this point, I wonder if I should stick with government work five more years or longer even to acquire loan forgiveness and future benefits or take a chance with a private practice.
Also, I have an interview with a practice owner this Friday, any suggestions on what I should ask . Thanks

 

[TexasPhysician]

I’m in a similar situation only I’ve been working for the VA and state for a few years post grad. I’ve had so much problems dealing with the bureaucracies of an institution that I left. I’ve gotten a few invites to joining private practices. But here are the issues. Assuming that pslf will still be available in five years, both my spouse and I have a combined student debts that is hefty enough to benefit from this government loan forgiveness program. California also pays decent for state employees along with benefits like health insurance,401k, pensions, etc.
I have no clue about private practice and the only thing is is driving me towards it is the Independence. So at this point, I wonder if I should stick with government work five more years or longer even to acquire loan forgiveness and future benefits or take a chance with a private practice.
Also, I have an interview with a practice owner this Friday, any suggestions on what I should ask . Thanks

With substantial loans and only 5 years out, I’d stay and hope for forgiveness. After, the money is better in private work.

 

[Mad Jack]

Make sure you either remove a noncompete from the agreement or have one with very generous terms so they don't have you by the balls because of your geographic limitations

 

[scentofpapaya]

thanks everyone for your advice. The main reason why I am looking into joining a private practice is because 1) I do not need to stay with an institution that offers PSLF because I have no loans, 2) I do not like dealing with bureaucracy and administrative stuff (who does, really...) 3) I really like outpatient, 4) I have no education or background in running my own business, 5) I would like to work with some other doctors so that I have coverage in case I need to take a sick day, vacations, etc. Thank you for the note on the noncompete agreement, I was not aware of that until I read about it here. Also, what are the main pros and cons when you compare W2 vs 1099? If I do work for a group, what should I ask for? is 7:3 a standard split or more like 5:5?

 

[Thruster]

in terms of the split I've seen 30-40% overhead plus profit, negotiation is expected. I was in a similar position, ended up taking a safe government job instead and am now regretting working within a dysfunctional and inefficient system.

I would also ask them about:
Insurance Payor mix and their reimbursements for our E&M codes and how the patients are distributed
IC vs Employee, how RVUs factor in if at all, is there partnership, is malpractice covered as an IC
%collections for billing, and are you paid based on what's collected or on what's billed
turn over rate
meet with the other psychiatrists there and speak with them about their experience
Coverage for after hours, time off, sick, vacation, etc.
How are patients screened and do they see a sw or therapist prior to seeing you
ancillary support for prior auths, paperwork, faxes, care coordination, vitals, etc.
as a psychiatrist is it primarily psychopharm or combination
how much notice they require prior to resignation and vice versa
how will your performance be measured
how much time is allotted per new eval and for follow ups

That should get you started.

 

[scentofpapaya]

in terms of the split I've seen 30-40% overhead plus profit, negotiation is expected. I was in a similar position, ended up taking a safe government job instead and am now regretting working within a dysfunctional and inefficient system.

Appreciate your frank input. I've rotated through academic hospital, state hospital, and VA through residency and really disliked working with all the policies and administrative stuff. I noticed that I was getting more burnt out from dealing with bureaucracy than from interacting with patients. I have no desire to climb up the administrative ladder and 0 interest in research, I'm happy to see patients, discuss cases with colleagues, and go home with a paycheck that I would feel that I've earned fairly from the work that I've put in. It's not that I need to make half a million dollars per year, I just want to make sure that I'm not taken advantage of by an already existing group practice and know that I'm fairly compensated. Otherwise, I feel that I would end up bitter and resentful, feel burnt out, which would eventually be detrimental to both me and other people at the group.

 

[scentofpapaya]

Honestly, get a 4 day week job and open your own clinic 1 day or even half day a week. Rent is not much for 1 day a week and you may even get some time share type of set up. The area you are talking about esp if outside NYC will fill pretty quick. I dont know how much of the practice model that the group practice will be willing to share with you. I think you can learn most of what you need to know if your only running a 1 day a week clinic. Use a billing company which you pay 7 % collections or get an EMR that lets u self bill. Once you are credentialed with the various insurance companies in the area that is really the limiting factor and then your practice will grow with time and marketing. Several of my friends out of residency started right out with PP 1 day a week and figured it out as they went along with some type of w2 or 1099 work already in place and all of them are doing GREAT. The fastest way to learn is to do it yourself and reach out to some colleagues for advice as you go along. Your chance of failure is quite low if you keep your initial costs down and let yourself be known in the area. the group model you may be stuck in a few years and you'll wish retroactively that you had started your 1 day PP from the get go not to mention non competes which may not let you be in the ideal location. If there is need for a group to expand that should answer your question about how much there is a need there. The blueprint really is having some type of "employed" position even part time as you start your PP. Keep it lean on expenses from the start and it will be one of the best decisions you ever made.

thanks for your advice. I've been searching around for those part time opportunities that would allow private practice on the side.... maybe it's because i'm geographically locked (bought a house and family is all here) that those employed positions have been kind of difficult to find will keep searching. Just nervous going out to the real world after being in this bubble of a residency!

 

[dl2dp2]

thanks for your advice. I've been searching around for those part time opportunities that would allow private practice on the side.... maybe it's because i'm geographically locked (bought a house and family is all here) that those employed positions have been kind of difficult to find will keep searching. Just nervous going out to the real world after being in this bubble of a residency!

If u have no loans I would frankly start a full time practice immediately. Maybe work locum a few days a week. The only other consideration is health insurance. If you have someone else's insurance or are okay with temporary Obamacare plans, this removes this issue as well.

From what you wrote down, I can pretty much guarantee you that you'll make more money and enjoy your job more within the first 6-12 months in a solo practice. In any kind of facility driven job (including group practice), the paperwork burden is typically HIGHER not lower compared to a solo practice, for very obvious reasons: you won't generate any unnecessary internal paperwork for yourself.

You have everything you need here:
Starting a Practice | psychiatry.org

There will be a rather modest initial investment of about 10-15k. Also, I would say this not having colleagues to work with a non-issue in this particular geographical area, which has a high density of outpatient private practice psychiatrists. There is also a lot of professional organizational activity, like the NYSPA. It's very easy to get plugged in.

 

[dl2dp2]

While there is likely regional variability, 10% overhead is very difficult to achieve even with cash only. Say I generate $1 million in revenue cash only. I’ll need 2-3 staff to handle call volume, paperwork, faxes, Intake’s, vitals, etc. 2 FT staff is about $70k. Rent even in Texas is $40k/year for decent waiting room, staff area, and a few offices. My rent includes water/waste. Even with a hypothetical $1 million revenue, I’m over 10% overhead already. Credit card fees are about 2%, supplies, internet, electricity, computers, advertising, furniture, cleaning staff, accountant, attorney, business taxes, etc add up.

Group practices in my area generally keep about 30-40%. 30-40% includes added overhead and some profit in exchange for 0 administrative headaches.

You are much more generous with staffing IMHO. Let's say you have 400*8*5*48 ~ 750k revenue. Let's say they are mostly monthly f/u patients, the constant total case load should be less than 200. Do you really need 2 staff members to handle a 200 patient practice? I think a part time virtual secretary to take calls completely suffice. Furthermore, why would you need a suite of multiple offices? I guess if you have two full time churning at the same time...

Do you mean two psychiatrists each generating 500k revenue? I think I would only need one full time staff...even then...

Overhead math for cash solo that I'm aware of looks something like this: 500k total revenue (this would be more like a 35 clinical week, 40-45 total work hours), insurance/licensure etc 10k, rent 20-30k, service (accountant/lawyer etc) 5k, misc (marketing, part time secretary etc) 10-20k. This ends up around 50k, somewhat less if you are lucky. But you are right it's hard to keep it any lower than the high single digits, and hiring out some admin vs. not gives you a yield of a few percentage points, but this might free up your clinical hours to generate more revenue.

 

[MedMan80]

Go with PP like people are saying, toughest thing would be to find someone to help cover you when you're on vacay, but im sure you'll be able to find a willing colleague to share coverage with if your training program is in proximity to where you want to setup shop.

 

[TexasPhysician]

You are much more generous with staffing IMHO. Let's say you have 400*8*5*48 ~ 750k revenue. Let's say they are mostly monthly f/u patients, the constant total case load should be less than 200. Do you really need 2 staff members to handle a 200 patient practice? I think a part time virtual secretary to take calls completely suffice. Furthermore, why would you need a suite of multiple offices? I guess if you have two full time churning at the same time...

Do you mean two psychiatrists each generating 500k revenue? I think I would only need one full time staff...even then...

Overhead math for cash solo that I'm aware of looks something like this: 500k total revenue (this would be more like a 35 clinical week, 40-45 total work hours), insurance/licensure etc 10k, rent 20-30k, service (accountant/lawyer etc) 5k, misc (marketing, part time secretary etc) 10-20k. This ends up around 50k, somewhat less if you are lucky. But you are right it's hard to keep it any lower than the high single digits, and hiring out some admin vs. not gives you a yield of a few percentage points, but this might free up your clinical hours to generate more revenue.

If you are working 8-5 5 days/week x 4 weeks/month of mostly 30 min follow-ups, you have a monthly case load of around 300. Once you are “mostly follow-ups”, most patients will be q3 months which is closer to 900 active patients. Closer to 1k as old patients return. They stack up.

My staff has got plenty of new patients blowing up the phone lines, prior auths, vitals, refill requests, reminder calls, patient problems, rescheduling, urgent appt requests, med shortage issues, pharmacy problems, billing, record requests, pulling charts, helping with intakes, restocking forms, etc. I have 2 FT staff and at times I think I need 3 for enough efficiency.

Extra rooms are vital to staff other psychiatrists, counselors, etc to keep overhead lower. My clinic is 1 counselor and 2 PT CAP.

 

[Achillees]

in terms of the split I've seen 30-40% overhead plus profit, negotiation is expected. I was in a similar position, ended up taking a safe government job instead and am now regretting working within a dysfunctional and inefficient system.

I would also ask them about:
Insurance Payor mix and their reimbursements for our E&M codes and how the patients are distributed
IC vs Employee, how RVUs factor in if at all, is there partnership, is malpractice covered as an IC
%collections for billing, and are you paid based on what's collected or on what's billed
turn over rate
meet with the other psychiatrists there and speak with them about their experience
Coverage for after hours, time off, sick, vacation, etc.
How are patients screened and do they see a sw or therapist prior to seeing you
ancillary support for prior auths, paperwork, faxes, care coordination, vitals, etc.
as a psychiatrist is it primarily psychopharm or combination
how much notice they require prior to resignation and vice versa
how will your performance be measured
how much time is allotted per new eval and for follow ups

That should get you started.

I'm interested to hear about your regrets taking a 'safe' government job.

 

[scentofpapaya]

thanks everyone for your advice. Now I feel like starting my own private practice might be worth it, even if I don't start it right out of residency... I was kind of scared because one of my seniors from residency started PP right out of residency and then he got totally burnt out in 3 years and then ended up selling the practice. He said filling up the practice was not an issue but he went completely solo after residency without anyone helping him, was handling all the billing, scheduling, etc by himself, could not go on vacations and even on days that he had to take off for sick days, he was answering phone messages and stuff. I thought joining an established group practice might allow me to avoid all that since the system is already in place, but the group would take chunk of what I generate and I don't know which ratio of splitting what I bring in would satisfy both sides.... It looks like if I do end up opening my own, the overhead would be around 10% but I would have to deal with the headaches of everything that comes with running my own business. I'm willing to give up more than 10% of what I bring in to avoid all that, but if they ask for up to 50% of what I make them i think it's unfair. Maybe the compromise should be range from 20%-40% depending on the the hours and everything. Now I'm even considering taking a government job even though I really dislike all the administrative stuff just because it would allow me to have a potential of opening a PP in the future instead of being bound by restrictive covenant, which is part of the contract for this group practice. Any suggestions?

 

[Sushirolls]

Lease 30150
Triplenet part of lease 9222.84
EMR 1000
Credit Card Processing 156
Phone/internet 1200
After hours phone 36
electronic Fax 120
Billing company minimum 5940
Liability Insurance 5000
Business License 29
Website maintenance 720
online accounting program 260.12
Accountant ~700
Medical license 500
CLIA lab License 80
Building Insurance 637
website ownership 15
UPS mailbox 230
Board fee 175
Board fee 225
med society 395
med society
med society 560

 

[Sushirolls]

Don't ever sign a non-compete. Laugh, and walk away.

 

[TexasPhysician]

Don't ever sign a non-compete. Laugh, and walk away.

Disagree. The best practices will require it, but they should be limited in scope. In other words, cut it down to outpatient only and 5-10 mile radius. That’s reasonable. Good practices don’t want to build you an outpatient practice on their dime for you to open up shop next door as soon as you are becoming full. Alternative is to have a reasonable non-compete buy-out. Either way it should be reasonable on both ends.

 

[Sushirolls]

Jobs should strive for employee happiness so people don't want to leave. I could understand in psych a non-compete for an ECT/TMS practice but therapy, med management, I see no utility and contest the premise 'the best practices will require it.'

Non-competes serve to be a form of oppression to tip the scales so people don't want to leave and put up with more BS. I have no desire to work for any place that feels that's an acceptable tool to keep physicians. Recipe for worsening the physician burn out plaguing our country.

 

[TexasPhysician]

Jobs should strive for employee happiness so people don't want to leave. I could understand in psych a non-compete for an ECT/TMS practice but therapy, med management, I see no utility and contest the premise 'the best practices will require it.'

Non-competes serve to be a form of oppression to tip the scales so people don't want to leave and put up with more BS. I have no desire to work for any place that feels that's an acceptable tool to keep physicians. Recipe for worsening the physician burn out plaguing our country.

2 extremes to demonstrate
Insurance based with Medicare and Medicaid: I would never accept a non-compete. It is oppressive with no benefit. Anyone can take the job and there will be no shortage of patients for the business to profit.

Well known cash practice: The practice will likely spend $$ advertising/marketing you. You will get a higher hourly rate with fewer patients seen per hour. The practice will likely see a short-term loss while investing in your quality. They won’t risk building your cash practice to steal very desirable patients. If you want a desirable job like this, expect a non-compete. Just make sure it’s reasonable.

 

[psyguru]

I think the overhead for a forensic expert witness practice seems less than a clinical practice. It has less administrative hassles and you can bill attorneys for everything including phone calls, record review, etc. I can send one invoice for 20k and not have to worry too much about reimbursement vs having to send close to a 100 invoices. You can pick and choose cases. It is very interesting work and with high hourly rates and 90% of the work can be done from anywhere and anytime including down time at your day job at the clinic.

Sent from my SM-G965U using Tapatalk

 

[scentofpapaya]

2 extremes to demonstrate
Insurance based with Medicare and Medicaid: I would never accept a non-compete. It is oppressive with no benefit. Anyone can take the job and there will be no shortage of patients for the business to profit.

Well known cash practice: The practice will likely spend $$ advertising/marketing you. You will get a higher hourly rate with fewer patients seen per hour. The practice will likely see a short-term loss while investing in your quality. They won’t risk building your cash practice to steal very desirable patients. If you want a desirable job like this, expect a non-compete. Just make sure it’s reasonable.

thanks for the input.

following up after my meeting..
Pros: well known and well established cash practice, they have a good reputation and a good amount of waiting list. Based on W2 model, starting salary was reasonable and he provided "incentive" which was very tempting. "Incentive" was this "bonus," that I would take a portion of what I generated for the practice at the end of every year. I would just have to put my faith in that he will be transparent with what I generate for the practice. He also mentioned 1099 contract and something that sounded like "buying in" but I couldn't fully understand (the elaborate accounting terms and financing and refinancing and no-interest rate and all that), I will have to talk to my accountant and really educate myself on this.
Cons: there was non-compete clause (although not completely unreasonable, it was still there..). He wanted me to work every Saturdays and few evening of the week... he said this is only until I "build it up" but only God knows for how long I would be asked to work every weekend and evenings... which means I might get burnt out and would not be able to spend time with my family which is very important to me, and might put a hold on starting a family....

And i've realized that the only places that don't ask for non-compete are VA and state facility jobs in the area that I live in. All the big hospitals (academic and non-academic facilities) have non-compete clause in the contract in this area.... which really sucks. Plus, hospitals are hiring more NPs and less MDs....

 

[Candidate2017]

Pros: well known and well established cash practice, they have a good reputation and a good amount of waiting list. Based on W2 model, starting salary was reasonable and he provided "incentive" which was very tempting. "Incentive" was this "bonus," that I would take a portion of what I generated for the practice at the end of every year. I would just have to put my faith in that he will be transparent with what I generate for the practice. He also mentioned 1099 contract and something that sounded like "buying in" but I couldn't fully understand (the elaborate accounting terms and financing and refinancing and no-interest rate and all that), I will have to talk to my accountant and really educate myself on this.
Cons: there was non-compete clause (although not completely unreasonable, it was still there..). He wanted me to work every Saturdays and few evening of the week... he said this is only until I "build it up" but only God knows for how long I would be asked to work every weekend and evenings... which means I might get burnt out and would not be able to spend time with my family which is very important to me, and might put a hold on starting a family....

And i've realized that the only places that don't ask for non-compete are VA and state facility jobs in the area that I live in. All the big hospitals (academic and non-academic facilities) have non-compete clause in the contract in this area.... which really sucks. Plus, hospitals are hiring more NPs and less MDs....

LOL there's a full cash pay waitlist ready for appointments yet he will work you every Saturday and 3 nights/week to "build it up"??? Build his bank account? The vague "faith"-based bonus and teaser buy in is a nice touch. It sounds like a churn and burn operation where you will be geographically shut out by a non-compete once you get burnt out. No thanks.

You have no loans, a spouse who provides health coverage and live in a large metropolis that embraces cash-pay psychiatry. Perfect situation for building your own practice except for your fear.

 

[TexasPhysician]

thanks for the input.

following up after my meeting..
Pros: well known and well established cash practice, they have a good reputation and a good amount of waiting list. Based on W2 model, starting salary was reasonable and he provided "incentive" which was very tempting. "Incentive" was this "bonus," that I would take a portion of what I generated for the practice at the end of every year. I would just have to put my faith in that he will be transparent with what I generate for the practice. He also mentioned 1099 contract and something that sounded like "buying in" but I couldn't fully understand (the elaborate accounting terms and financing and refinancing and no-interest rate and all that), I will have to talk to my accountant and really educate myself on this.
Cons: there was non-compete clause (although not completely unreasonable, it was still there..). He wanted me to work every Saturdays and few evening of the week... he said this is only until I "build it up" but only God knows for how long I would be asked to work every weekend and evenings... which means I might get burnt out and would not be able to spend time with my family which is very important to me, and might put a hold on starting a family....

And i've realized that the only places that don't ask for non-compete are VA and state facility jobs in the area that I live in. All the big hospitals (academic and non-academic facilities) have non-compete clause in the contract in this area.... which really sucks. Plus, hospitals are hiring more NPs and less MDs....

Keep in mind that everything is negotiable. Get the non-compete minimized, work Saturdays for 2 months to build volume (then 0 Saturday’s), and agree to no more than 2 evenings/week ongoing as part of normal hours.

 

[scentofpapaya]

LOL there's a full cash pay waitlist ready for appointments yet he will work you every Saturday and 3 nights/week to "build it up"??? Build his bank account? The vague "faith"-based bonus and teaser buy in is a nice touch. It sounds like a churn and burn operation where you will be geographically shut out by a non-compete once you get burnt out. No thanks.

You have no loans, a spouse who provides health coverage and live in a large metropolis that embraces cash-pay psychiatry. Perfect situation for building your own practice except for your fear.

Thank you, it's really helpful to get some outsider's perspective....It's important that I get more opinions from people so it could educate me about what is a good job vs what is not. I'm going to talk to people who started private practice and see what their experience was like. I know 2 who got burnt out then closed their practice (which really freaked me out because I thought opening PP was relatively easy compared to other specialties in medicine), and also know few who seem happy and not burnt out running a regular 9-5 Monday-Friday practice.

 

[Ironspy]

LOL there's a full cash pay waitlist ready for appointments yet he will work you every Saturday and 3 nights/week to "build it up"??? Build his bank account? The vague "faith"-based bonus and teaser buy in is a nice touch. It sounds like a churn and burn operation where you will be geographically shut out by a non-compete once you get burnt out. No thanks.

You have no loans, a spouse who provides health coverage and live in a large metropolis that embraces cash-pay psychiatry. Perfect situation for building your own practice except for your fear.

You didn't ask but you should not wait to start a family for this job (or any job imo) if you feel otherwise ready given no loans and employed spouse. Lots of cushier jobs in the area

 

[Ironspy]

Also consider that non competes are different in NYC than other places. A 5 mile radius could block you out of Manhattan.

 

[Yellow mellow]

So here are some information I had gotten from the pp :
1) 1099
2) The first 450,000 gross collection is payable to physician at 60%
The next 300,000 gross collection gross collections payable to physician @ 65%
Gross collection exceeding 750,000 are payable to physician @ 70%
3) 90% insurance +2 cash Med check daily
4) No benefits
5) total NET daily rate =1186 /8 -> $148/hr @ 100% attendance =284,640
+75,000 for 3 TMS patients daily=359,0640

I do have loans and it would probably be wise to work with government but I’m so traumatized that I really want to give pp a shot. The employer wants to offer partnership after 2-3 years.

I know NOTHING about pp so any advice would be greatly appreciated. I’m meeting him again tomorrow so any questions I should ask ? Thanks for all the inputs

 

[TexasPhysician]

$148/hr for 1099 is too low, especially if assuming 100% show/collections.

 

[Yellow mellow]

$148/hr for 1099 is too low, especially if assuming 100% show/collections.

What figure would be reasonable? He did mention that with TMS, I can make more.
He says he brought in 400,000 past year but his office had to turn away so many potential patients. Tells me I can make 400 depending on how hard I want to work. Doesn’t make that sense to me if I’m looking to work 40 hours a week.
Am I being duped ?

 

[MedMan80]

What figure would be reasonable? He did mention that with TMS, I can make more.
He says he brought in 400,000 past year but his office had to turn away so many potential patients. Tells me I can make 400 depending on how hard I want to work. Doesn’t make that sense to me if I’m looking to work 40 hours a week.
Am I being duped ?

Keep in mind at 1099 you will pay both ends of payroll tax, but losing out on the benny's is atleast 20K worth of insurance, CME days/reimbursement/licensure coverage etc..

 

[TexasPhysician]

What figure would be reasonable? He did mention that with TMS, I can make more.
He says he brought in 400,000 past year but his office had to turn away so many potential patients. Tells me I can make 400 depending on how hard I want to work. Doesn’t make that sense to me if I’m looking to work 40 hours a week.
Am I being duped ?

$150+/hr guaranteed with 1099 or pass on it. $148 assuming perfection won’t ever happen. You will have no-shows and potential billing problems. If they can’t show you how they collect no-show fees at full rate and 100% collections, your $148 will probably be closer to $130. I personally won’t consider anything under $170/hr unless you are paying me to do nothing.

 

[michaelrack]

Anything under 65% of gross collections is a rip off

 

[Doctor Eliza]

Granted I live in a different part of the country, but just for a point of comparison: I am a psychologist 1099 contractor who gets 60% of what I bring in. For various reasons, I work evenings and weekends. Now psychologists are nowhere near as in demand as psychiatrists. I would think you could get a much better gig. And let me tell you evenings and weekends in PP get old fast. I really don’t see any reason a psychiatrist would need to keep those hours. I do get the security of working for a group, though. Hey, it’s why I do it. Good luck in your decision-making, but I think something better is probably out there.

 

[Yellow mellow]

$150+/hr guaranteed with 1099 or pass on it. $148 assuming perfection won’t ever happen. You will have no-shows and potential billing problems. If they can’t show you how they collect no-show fees at full rate and 100% collections, your $148 will probably be closer to $130. I personally won’t consider anything under $170/hr unless you are paying me to do nothing.

So even if no show, request 150 guaranteed? That is usually the case in the pass when I did IC @ correction facilities but I guess at pp, a no show means less than what is offered.

 

[Yellow mellow]

Also, the owner claims he cannot share insurance reimbursement dollar amount with me stating it is illegal, is that true ?

 

[TexasPhysician]

Also, the owner claims he cannot share insurance reimbursement dollar amount with me stating it is illegal, is that true ?

Yes. This is part of why I recommend joining a cash only group . Insurance companies keep rates down by having doctors agree to a NDA about rates. They can’t tell you until you join the practice.

 

[Yellow mellow]

Got it ! Thanks TexasPhysician.
The guy seemed really genuinely nice and super eager for me to sign on with what he was offering. Says he would have me work somewhere else for 6 months while he gets me signed up for insurance and eventually teach me TMS for better money.

After getting advise on this forum, I’m relieved to have a better understanding of this going forward but I feel rather dopey.

 

[TexasPhysician]

Got it ! Thanks TexasPhysician.
The guy seemed really genuinely nice and super eager for me to sign on with what he was offering. Says he would have me work somewhere else for 6 months while he gets me signed up for insurance and eventually teach me TMS for better money.

After getting advise on this forum, I’m relieved to have a better understanding of this going forward but I feel rather dopey.

It shouldn’t take 6 months to credential someone at an established psych practice.

 

[Sushirolls]

It shouldn’t take 6 months to credential someone at an established psych practice.

Yes, it can. Most will be 3-4 months, but it can take 6, and that is a good conservative number to not disappoint anyone.

 

[scentofpapaya]

Hi guys, so I'm back with after another PP interview...
This other PP wanted me to join, 9-5 Monday-Friday place (no weekends and no evenings, yay!) they accept some insurance.
I asked for 4 week vacation, potential maternity leave, coverage, office space, support from staff etc.
The owner was asking me first for what I have in mind for salary with W2.
I'm not sure what to ask.... I'm thinking... hmm do I ask for W2 with incentive?? but incentive would not be a "guarantee." I did mention that I don't need any health insurance.
She did mention that I may switch to 1099 later on.
What do you guys think? (btw I'm also talking to people about opening my own PP trying to obtain more information about this...)

 

[Sushirolls]

Last I heard for psych in ~2017 it was 256k median. There is an anchor point for you to reflect on. Then you must realize those median numbers also are typically attached to benefits. Which with health care and the various life/LTD/STD insurances can be 15-30K easily. So even though you aren't in need of health insurance, that money should go in your pocket. Will this 9-5 be solid? or will it be rife with cancellations? How staff heavy is this practice? That can lower your pay for the privilege of that support, the more you do, the more should be in your pocket potentially. So many variables.

 

[scentofpapaya]

Last I heard for psych in ~2017 it was 256k median. There is an anchor point for you to reflect on. Then you must realize those median numbers also are typically attached to benefits. Which with health care and the various life/LTD/STD insurances can be 15-30K easily. So even though you aren't in need of health insurance, that money should go in your pocket. Will this 9-5 be solid? or will it be rife with cancellations? How staff heavy is this practice? That can lower your pay for the privilege of that support, the more you do, the more should be in your pocket potentially. So many variables.

Yea exactly, I thought 1099 was simpler because it would be a "split" from what I understand. I do live in NE with a hospital outpatient job usually offering around anywhere between 190-220K for a starting salary, but those would come with benefits and a full support of hospital staff. I've heard that VA offers 210-250K range. All those jobs come with full benefits and staff support. The other PP that I interviewed at offered W2 with guaranteed base salary of 200-240K plus "incentive" based on the total amount I would generate for the practice: if I generate 200K/year then I take 50%, if 400K+/year then 60%, and if 600K+/year then 70%. The deal breaker was weekends and evenings... I'm just feeling very unsure about what I should ask because I can't come up with a single number for a W2 salary....

I do have loans and it would probably be wise to work with government but I’m so traumatized that I really want to give pp a shot. The employer wants to offer partnership after 2-3 years.

Hi, I'm also looking into government job because it would be a lot simpler to join than negotiating with PP or setting up my own PP. Could you please share what got you traumatized from the government job, if you don't mind sharing?

 

[TexasPhysician]

Yes, it can. Most will be 3-4 months, but it can take 6, and that is a good conservative number to not disappoint anyone.

I get that full credentialing can take months, but you don’t need that to start seeing patients in my experience. I’ve worked in practices in which I sign a contract and see patients that week. The money comes in. How or what that entails, I can’t say. I’ve never waited more than 2 weeks to start anywhere.

 

[TexasPhysician]

Hi guys, so I'm back with after another PP interview...
This other PP wanted me to join, 9-5 Monday-Friday place (no weekends and no evenings, yay!) they accept some insurance.
I asked for 4 week vacation, potential maternity leave, coverage, office space, support from staff etc.
The owner was asking me first for what I have in mind for salary with W2.
I'm not sure what to ask.... I'm thinking... hmm do I ask for W2 with incentive?? but incentive would not be a "guarantee." I did mention that I don't need any health insurance.
She did mention that I may switch to 1099 later on.
What do you guys think? (btw I'm also talking to people about opening my own PP trying to obtain more information about this...)

There won’t be exact things to ask for because we all desire different things. More vacation will cut into salary. Fewer benefits should increase salary. Volume effects salary, etc.

 

[scentofpapaya]

There won’t be exact things to ask for because we all desire different things. More vacation will cut into salary. Fewer benefits should increase salary. Volume effects salary, etc.

Yea... which is why i'm completely lost.... If i knew how much I generated for the hospital during my outpatient year, it would be much easier because I would have a general idea of what is a fair compensation. So lost now.....

I did a quick calculation:
If I spend 34 clinical hours per week (assuming lunch break and no-shows), worked 48 weeks per year,
1) $200/hr x 34 x 48 = $326,400
2) $250/hr x 34 x 48 = $408,000
3) $300/hr x 34 x 48 = $489,600
4) $350/hr x 34 x 48 = $571,200

I don't know how much this practice charges for each patient hour visit, so I just picked those different scenarios. I guess you can always generate more revenue from TMS and ketamine patients.
Asked for 4 week vacation because that was the standard at my residency program. I assume maternity leave is a no-pay 12 week leave.
Now I don't know how much the overhead is in this PP. I assume rent for 1 office room might cost ~$10,000/year. I don't know about the patient waiting area and reception room and stuff. I also have no idea how much the staff support would cost. I asked for malpractice insurance but I don't know how much that would cost (I've heard few thousand per year...?), I don't know how much they pay for EMR. I also assume that the owner would want some profit from hiring me, but I don't know how much is a fair share. Any feedback would help!

 

[TexasPhysician]

Yea... which is why i'm completely lost.... If i knew how much I generated for the hospital during my outpatient year, it would be much easier because I would have a general idea of what is a fair compensation. So lost now.....

I did a quick calculation:
If I spend 34 clinical hours per week (assuming lunch break and no-shows), worked 48 weeks per year,
1) $200/hr x 34 x 48 = $326,400
2) $250/hr x 34 x 48 = $408,000
3) $300/hr x 34 x 48 = $489,600
4) $350/hr x 34 x 48 = $571,200

I don't know how much this practice charges for each patient hour visit, so I just picked those different scenarios. I guess you can always generate more revenue from TMS and ketamine patients.
Asked for 4 week vacation because that was the standard at my residency program. I assume maternity leave is a no-pay 12 week leave.
Now I don't know how much the overhead is in this PP. I assume rent for 1 office room might cost ~$10,000/year. I don't know about the patient waiting area and reception room and stuff. I also have no idea how much the staff support would cost. I asked for malpractice insurance but I don't know how much that would cost (I've heard few thousand per year...?), I don't know how much they pay for EMR. I also assume that the owner would want some profit from hiring me, but I don't know how much is a fair share. Any feedback would help!

In my neck of the woods without any benefits (1099 situation), below $150/hr is low, $150-160/hr is borderline low, $160-$175 is average, $175-$190 is good, and above $190/hr is great. This is a generalization by me though. If I’m offered $120/hr for 12 hours to take call in-house at a place that averages 1 encounter/12 hours, I may do it because I could be paid to read a good book. If I’m offered $200/hr to see 5 follow-ups/hr at a high-acuity outpatient center, I’ll pass that job right on by. The better the quality of life, the less I’m willing to accept.