Negotiations

[Sneezing]

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Medium sized group practice of psychologists is looking for a psychiatrist. They have their own biller and take insurance. How would you negotiate a contract?

 

[vistaril]

Medium sized group practice of psychologists is looking for a psychiatrist. They have their own biller and take insurance. How would you negotiate a contract?

I don't think it's rocket science......first, find out what their expectations for you are. Obviously, there expectations are to generate revenue FOR THEM.

There are only so many likely arrangements possible in a case like this:
1) they pay you a flat per hour wage and schedule patients for you.
2) their only role is to funnel patients to you(and you to them) and they simply charge you so much per month(or a percentage of your gross billings) for overhead/use of their employees. In this case you would have more control over who you see and how you practice
3) they refer you their patients for med mgt and give you a percentage of each code you bill/collect. This would be in between #1 and 2.
4) They give you some guaranteed salary and also give you some revenue sharing per pt collection, but obviously with some portion of guaranteed salary the % of revenue sharing on each pt encounter you see is much less

All in all, I'm not sure it makes that much of a difference. The reality is that you are going to be doing med mgt for this group that owns the practice, and you're going to get some % of your collections either way(whether you see your money in terms of pure salary or purely based on collections). They aren't going to pay you 200,000 if your total collections are only 240,000 for example. I guess I would shoot for a payment model where you get paid ~70% or close to it of your collections.

 

[billypilgrim37]

They aren't going to pay you 200,000 if your total collections are only 240,000 for example. I guess I would shoot for a payment model where you get paid ~70% or close to it of your collections.

A lot of the psychology groups around here try to go 50/50, and wonder why they can find no takers. Of friends who have done this, many have said it's not worth it to take it unless you get an 80/20 split.

 

[whopper]

Wow, there are so many things I could bring up but right now I'm working on a presentation on a guy I had that was psychotic IMHO due to lupus anticoagulant that I don't want to get into a very very long post. Maybe later.

 

[vistaril]

A lot of the psychology groups around here try to go 50/50, and wonder why they can find no takers. Of friends who have done this, many have said it's not worth it to take it unless you get an 80/20 split.

My guess is that those psychology groups are running horrendous overhead practices.....I've actually heard of some psychiatry/lcsw groups who are running 55/45ish, so this may not be as uncommon as I thought. In my mind I always think of 68/32 as sort of the norm. I think 80/20 is not realistic if you're in a traditional pp. I mean you've got rent(the building), some staff, billing, collections, etc...also, are the credit card fees coming out of that(another couple percent on the self pay and copays).....

I don't think the psychology/psychiatry/lcsw/lpc distinction in terms of who is the owner is that important. psychiatrists probably have some leverage however, just because of the rx thing. I had an offer a while back(from three LCWS opening an agency) for an 85/15 split....they were obviously going to use residents to bring in medicare/Medicaid clients for high volume medmgt in a loss leader sense(at least on that 85/15 split as there is no way they break even on that) and then make their money on the referral services which they would also bill.....I didn't do it because it wasn't hourly and Im not sure it ever got off the ground.

Basically, it all comes down to following the money. who is billing and for what are they billing. And through who are they billing.......

 

[SeniorWrangler]

Look closely at how they can change the deal and at the non-compete. For the practice, the best business model is probably hiring young hungry docs out of residency and booting them after a few years before they get demanding. It that happens, you might have to move if you've got a big non compete.

 

[whopper]

Aside from the above, have a discussion on what type of patient you'll be expecting. Reason why I brought this up was because I did work in a PP with nonpsychiatrists (counselors and a psychologist). In short, many of them weren't prepared to deal with very sick people coming into the office, being used to the type of patient that just wants someone to listen to them.

This can turn into the dung hitting the fan at the office with staff members not knowing how to deal with dangerous patients, boundary issues between staff members and patients (e.g. they thought it was alright to e-mail patients. No that is a HIPAA violation unless the patient signs a waiver allowing this), among several other problems.

Another problem was some of the providers made recommendations that were completely inappropriate but they didn't know it was because they don't have a medical background. E.g. the guy running the office, a counselor, wanted me to see patients in just about 5-10 minutes and I flat out told him no. Then I go to work and saw a bunch of people scheduled for 10 minutes despite what I told him. I threatened to leave to practice but had to go through two weeks of badly scheduled patient because they were already told to show up and IMHO it did translate into worse care.

An advantage with the model is the other providers acted as a a screen. If I was referred their patients, their patients usually weren't bad though one particular counseling didn't know WTF she was doing and often times misdiagnosed patients. I didn't want the patient to be told they had two conflicting disorders from the same office so every single time I called her up about this issue, so we could resolve this before it looked liked a split-personality office, she never called me back, making the office look like a bunch of schmucks. The problem with possibly dangerous patients was in getting brand new people whose severity of illness was highly variable.

 

[vistaril]

E.g. the guy running the office, a counselor, wanted me to see patients in just about 5-10 minutes and I flat out told him no. Then I go to work and saw a bunch of people scheduled for 10 minutes despite what I told him. .

So how were you being paid in that setup? By the hour, or as a percentage of per pt collections? If it's the former(and it's a decent wage), of course they are going to expect you to move patients.

Just from talking to people, it seems like a lot of outpt psychs in these setups(owned by a psychologist or lcsw) want to be paid a nice per hour guaranteed salary and not have anything to do with revenue sharing, but they don't want to see the volume. I don't see how these two things are compatible....in situations where you are working for a group of psychologists or social workers or whatever and they are billing insurances and medicare, it is the volume that drives that nice per hour salary.

I think psychs who go to work for psychologists and social workers would be more able to spend a lot of time with each patient if they agreed to a fee split. Because of course if they are being paid a flat hourly fee the pressure is always going to come from others to move more patients...because the volume in such a setup is what generates the guaranteed hourly wage.

 

[countryboy75]

Ok, I am rather naive to this so please just explain: Wouldn't a set up like this be counterintuitive to the Stark laws...constant referral within the practice or is that just for durable medical equipment?

 

[whopper]

By the hour, or as a percentage of per pt collections?

Percentage. Reason why the ofice was going in that direction was because the guy running the office got the not so bright notion that we could get so many more patients if we saw as many people as we could and pack in them like sardines.

What happened in PP was I filled up to the degree where that's all I wanted. The office guy felt we could further compress it without considering the loss of quality or the risks involved, and despite being a mental health professional, he didn't IMHO fully understand the risks because he was a counselor, not a psychiatrist.

There's a difference between handling a guy who just wants someone to listen to them vs a guy who's attempted suicide 3x and has treatment resistant depression.