Private practice earnings

[Attending1985]

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Can anyone give me a ballpark earnings if I started my own practice in Minnesota. Would see 6 patients a day three days per week for one hour doing Medication plus therapy. I am totally clueless on billing and insurance reimbursement.

 

[TexasPhysician]

Too many variables. You could actually lose money doing this.

 

[Attending1985]

Too many variables. You could actually lose money doing this.

That sucks

 

[liquidshadow22]

Yes it's hard to find cash paying patients that want to pay for an hour visit. Also most patients don't need an hour for each visit, you will struggle to fill up the time with 20 min followup visits with some patients let alone 60 min. Flexibility in the services you provide is better for you and the patients satisfaction IMHO

 

[Attending1985]

Yes it's hard to find cash paying patients that want to pay for an hour visit. Also most patients don't need an hour for each visit, you will struggle to fill up the time with 20 min followup visits with some patients let alone 60 min. Flexibility in the services you provide is better for you and the patients satisfaction IMHO

Sounds like it’s a pipe dream. So most psychiatrists is private practice are doing high volume? I thought they were a good amount practicing psychotherapy.

 

[liquidshadow22]

Sounds like it’s a pipe dream. So most psychiatrists is private practice are doing high volume? I thought they were a good amount practicing psychotherapy.

No you can certainly find hourly psychotherapy patients, I just don't think it's realistic to expect your Entire panel to do 1 hours visits

 

[WisNeuro]

Minnesota is pretty saturated with therapists, both midlevel and doctoral. So, might be hard to find a lot of cash clients for the therapy end of things at a high price point. Also, every healthcare system here just had mid to high triple digit layoffs,with some announced hospital closures, so we're waiting to see how that shakes out in the MH landscape.

 

[TexasPhysician]

No you can certainly find hourly psychotherapy patients, I just don't think it's realistic to expect your Entire panel to do 1 hours visits

I know a MD requiring psychotherapy of all patients +/- meds. This is cash only to work. I believe he charges $225/hr or so. He subleases a small office and he schedules everyone himself. Low overhead. It took awhile to build a population base and referral pool, but it is possible without insurance.

 

[liquidshadow22]

I prefer cha

I know a MD requiring psychotherapy of all patients +/- meds. This is cash only to work. I believe he charges $225/hr or so. He subleases a small office and he schedules everyone himself. Low overhead. It took awhile to build a population base and referral pool, but it is possible without insurance.

I prefer charging $150 for a 15 min followup

 

[Attending1985]

I know a MD requiring psychotherapy of all patients +/- meds. This is cash only to work. I believe he charges $225/hr or so. He subleases a small office and he schedules everyone himself. Low overhead. It took awhile to build a population base and referral pool, but it is possible without insurance.

That sounds ideal but I’m sure very slow going for startup.

 

[Bartelby]

Unfortunately insurance companies make it illegal to share how much they pay you. If I take one insurance in PP and I share their rates with you it is considered anti-competitive price fixing behavior which is grounds for terminating the contract and possibly criminal charges. Never mind that the insurance company knows the rates literally everyone gets and can use that information asymmetry to squeeze you as hard as possible. In short the law is broken, so unless you have someone willing to take a risk you will not learn insurance rates.

You can look up Medicare rates and estimate what insurance might pay from there. Probably it will be a least a bit higher.

Others are free to share cash rates with you, so if you are considering that route you can try to get a feel for the area by asking around through your network.

But basically six patients per day 3 days a week is 18 billed hours. I think gross income (as a guess) might range from:

Low - $130 x 18 = 2340 per week
Mid - $200 x 18 = 3600 per week
High - $400 x 18 = 7200 per week

Those numbers x 46 weeks worked per year (counting out holidays) give gross:

$107.6k
$165.6k
$331.2k

This is before overhead and presumes 100 percent filled time + 100 percent showing up + 100 percent collections, so obviously an overestimate. I would love to see what some PP people think about these variables and what is realistic to achieve at various price points.

Adding in time for administrative details you are talking about three full days of work I think, so potentially not bad for part time though again dependent on many variables.

I also like the above thought that not every patient needs or wants weekly hour long psychotherapy. I think more flexibility (fitting the treatment plan to the patient rather than vice versa) may help boost income and better meet patient needs.

 

[nrmp]

I prefer cha


I prefer charging $150 for a 15 min followup

Sounds little unrealistic to fill that kind of practice except higher end locations I guess

 

[liquidshadow22]

Not sure. Plenty of NPs charge this in cash practices.

 

[Attending1985]

Unfortunately insurance companies make it illegal to share how much they pay you. If I take one insurance in PP and I share their rates with you it is considered anti-competitive price fixing behavior which is grounds for terminating the contract and possibly criminal charges. Never mind that the insurance company knows the rates literally everyone gets and can use that information asymmetry to squeeze you as hard as possible. In short the law is broken, so unless you have someone willing to take a risk you will not learn insurance rates.

You can look up Medicare rates and estimate what insurance might pay from there. Probably it will be a least a bit higher.

Others are free to share cash rates with you, so if you are considering that route you can try to get a feel for the area by asking around through your network.

But basically six patients per day 3 days a week is 18 billed hours. I think gross income (as a guess) might range from:

Low - $130 x 18 = 2340 per week
Mid - $200 x 18 = 3600 per week
High - $400 x 18 = 7200 per week

Those numbers x 46 weeks worked per year (counting out holidays) give gross:

$107.6k
$165.6k
$331.2k

This is before overhead and presumes 100 percent filled time + 100 percent showing up + 100 percent collections, so obviously an overestimate. I would love to see what some PP people think about these variables and what is realistic to achieve at various price points.

Adding in time for administrative details you are talking about three full days of work I think, so potentially not bad for part time though again dependent on many variables.

I also like the above thought that not every patient needs or wants weekly hour long psychotherapy. I think more flexibility (fitting the treatment plan to the patient rather than vice versa) may help boost income and better meet patient needs.

Are you making these estimates based on insurance or cash practice?

 

[clausewitz2]

Unfortunately insurance companies make it illegal to share how much they pay you. If I take one insurance in PP and I share their rates with you it is considered anti-competitive price fixing behavior which is grounds for terminating the contract and possibly criminal charges. Never mind that the insurance company knows the rates literally everyone gets and can use that information asymmetry to squeeze you as hard as possible. In short the law is broken, so unless you have someone willing to take a risk you will not learn insurance rates.

You can look up Medicare rates and estimate what insurance might pay from there. Probably it will be a least a bit higher.

Others are free to share cash rates with you, so if you are considering that route you can try to get a feel for the area by asking around through your network.

But basically six patients per day 3 days a week is 18 billed hours. I think gross income (as a guess) might range from:

Low - $130 x 18 = 2340 per week
Mid - $200 x 18 = 3600 per week
High - $400 x 18 = 7200 per week

Those numbers x 46 weeks worked per year (counting out holidays) give gross:

$107.6k
$165.6k
$331.2k

This is before overhead and presumes 100 percent filled time + 100 percent showing up + 100 percent collections, so obviously an overestimate. I would love to see what some PP people think about these variables and what is realistic to achieve at various price points.

Adding in time for administrative details you are talking about three full days of work I think, so potentially not bad for part time though again dependent on many variables.

I also like the above thought that not every patient needs or wants weekly hour long psychotherapy. I think more flexibility (fitting the treatment plan to the patient rather than vice versa) may help boost income and better meet patient needs.

Based on the 15 hour-long encounters I had last month with commercial insurance paying folks, in my metro at least the mid range estimate is a slight lowball but not orders of magnitude off.

 

[Bartelby]

Based on the 15 hour-long encounters I had last month with commercial insurance paying folks, in my metro at least the mid range estimate is a slight lowball but not orders of magnitude off.

That's good to know!

Re: whether my guesses were insurance v cash, I think the low estimate is probably too low (maybe medicare or medicaid rates in some places). The mid estimate is probably (as clausewitz suggests) close to or just slightly low for insurance in many markets. The $400/hour is not achievable with insurance, that would just be found in a relatively high-end cash practice. This all presumes you bill an E&M + psychotherapy code, a psychotherapy only code would reimburse in relatively low ranges I suspect.

For those in PP do you find yourself able to fill your schedule back to back with near full collection? I would imagine filling and collecting for 3/4 of your slots would be doing quite well. If you take my mid-range estimate of $165.6k and multiply by 0.75 you get $124.2k. If you subtract out 15% for overhead, you get down to $105.6k. Again keep in mind this is all back-of-the-napkin math from someone who is not in PP, but I suspect this kind of practice would be relatively low-paid as a part time job unless you pull off higher cash rates.

 

[Bartelby]

Also my saying $400/hr for hour-long visits is not achievable is again coming from someone with no PP experience. If others have different experiences I'd love to know!

 

[Sushirolls]

If you want numbers, cruise this thread:

Private Practice in Progress

Building a private practice, N of 1. Enjoy. Month zero: Grand plan was to use money from inpatient gig where independent contractor doing own billings to expedite insurance paneling, so all I had to do was switch over the practice address once opened. Long story short, not a quality place I...

forums.studentdoctor.net

In a few weeks I'll be posting for Q3.
Insurance based. Some good commercial rates, some poor. Slow growth rate, mixed reasons but heavy ARNP saturation isn't helping.

 

[TexasPhysician]

That's good to know!

Re: whether my guesses were insurance v cash, I think the low estimate is probably too low (maybe medicare or medicaid rates in some places). The mid estimate is probably (as clausewitz suggests) close to or just slightly low for insurance in many markets. The $400/hour is not achievable with insurance, that would just be found in a relatively high-end cash practice. This all presumes you bill an E&M + psychotherapy code, a psychotherapy only code would reimburse in relatively low ranges I suspect.

For those in PP do you find yourself able to fill your schedule back to back with near full collection? I would imagine filling and collecting for 3/4 of your slots would be doing quite well. If you take my mid-range estimate of $165.6k and multiply by 0.75 you get $124.2k. If you subtract out 15% for overhead, you get down to $105.6k. Again keep in mind this is all back-of-the-napkin math from someone who is not in PP, but I suspect this kind of practice would be relatively low-paid as a part time job unless you pull off higher cash rates.

The low estimate is not too low depending on geography. Insurance reimbursement rates can literally vary by side of the street.

Additionally overhead isn’t a flat percent regardless of hours worked. To stay full in an insurance pp, you’ll want to double book some slots, and have staff available to book patients at least 30 hours/week. The average insurance patient wants to call a clinic and have the phone answered. If not, good chance they call elsewhere. If you only want 6 patients/day, 1 no show or cancellation that you can’t fill will drop your revenue by 17% rounded. If you use a billing service, they take 6% of gross or more for a small practice. If you do it yourself, you will spend hours each week chasing declines. 6% for billing and the patients that you collect something in office will get you hit by an additional 3% credit card service charge. Billing companies get their cut of cc charges too.

A staff working 30 hours per week to minimize gaps + rent + EMR fees + office supplies adds up quick. I would not be surprised to see a PT insurance practice having 50% overhead. It is not ideal. For this few of hours, your own pp isn’t worth it with insurance. I’d latch on to an existing pp that will allow your hours, go cash, or find a related field that would let me sublease space and use their staff in exchange for them having in-house psych.

 

[ArdorAyurveda]

What are the advantages of accepting insurance if you're running a PP? Why not just start a part-time, cash only PP on the side while you keep your day job? It may take longer, but I don't see the point of dealing with insurance in PP, I thought the whole point of PP was to cut out the middle man.

 

[Attending1985]

The low estimate is not too low depending on geography. Insurance reimbursement rates can literally vary by side of the street.

Additionally overhead isn’t a flat percent regardless of hours worked. To stay full in an insurance pp, you’ll want to double book some slots, and have staff available to book patients at least 30 hours/week. The average insurance patient wants to call a clinic and have the phone answered. If not, good chance they call elsewhere. If you only want 6 patients/day, 1 no show or cancellation that you can’t fill will drop your revenue by 17% rounded. If you use a billing service, they take 6% of gross or more for a small practice. If you do it yourself, you will spend hours each week chasing declines. 6% for billing and the patients that you collect something in office will get you hit by an additional 3% credit card service charge. Billing companies get their cut of cc charges too.

A staff working 30 hours per week to minimize gaps + rent + EMR fees + office supplies adds up quick. I would not be surprised to see a PT insurance practice having 50% overhead. It is not ideal. For this few of hours, your own pp isn’t worth it with insurance. I’d latch on to an existing pp that will allow your hours, go cash, or find a related field that would let me sublease space and use their staff in exchange for them having in-house psych.

Thanks for the advice. I think I'm looking at cash only where I do everything or joining a small group. In private practice, on average what percent of your earnings will they take?

 

[TexasPhysician]

Thanks for the advice. I think I'm looking at cash only where I do everything or joining a small group. In private practice, on average what percent of your earnings will they take?

20-40%

 

[zolof]

Dont forget Im seeing decline in my colleagues with private practice pts, insurance AND cash, due to COVID> I have a friend was doing cash only full time for years, and part time hospital work for benefits. he went back to full time hours at the hospital once the pandemic started.

 

[brosa]

... If you do it yourself, you will spend hours each week chasing declines. 6% for billing and the patients that you collect something in office will get you hit by an additional 3% credit card service charge. Billing companies get their cut of cc charges too.

...

Just asking based on curiosity, do you hire a billing company? Or based on your experience it is worthed to lose hours each week? I wonder which one people do in their practice.

 

[TexasPhysician]

Just asking based on curiosity, do you hire a billing company? Or based on your experience it is worthed to lose hours each week? I wonder which one people do in their practice.

In my current practice, I’m cash only. I’ve worked in an insurance practice that hired 3 staff to manage billing because it was cheaper than outsourcing. It was a 2 psych practice. Insurances will find worthless reasons to withhold payments, they’ll request chart reviews, and they’ll require different codes just to hope we give up. A friend of mine struggled with Covid as some insurances required a GT modifier, some an 02 modifier, and some didn’t want a modifier for telepsych visits.

 

[Sushirolls]

Currently I have ~10 clinical hours per week for my practice. I have a 0.5FTE assistant. With our current EMR she spends about ~25% of her time on the myriad of billing issues. So you could say, 1 hour per day. And of that hour more than half is mostly maintenance and following up with reminders and other fluff aspects as opposed to more involved tasks for what billing can be.

GT was dropped by all my insurance networks, 100% modifier 95 now. Only one company, that I'm not even in network with, wants 02 for place of service.

Covid ground my growth rate to minimal, but things are almost back to pre-covid related growth.

 

[Shufflin]

Also my saying $400/hr for hour-long visits is not achievable is again coming from someone with no PP experience. If others have different experiences I'd love to know!

I charge $400/hr in a city where other charge $500/hr for initial eval. Now, filling up a practice at this hourly rate is another story. I'm happy with a small cohort of private patients.

 

[kopftonmd]

What are the advantages of accepting insurance if you're running a PP? Why not just start a part-time, cash only PP on the side while you keep your day job? It may take longer, but I don't see the point of dealing with insurance in PP, I thought the whole point of PP was to cut out the middle man.

I'm interested in learning more about this, too.

 

[calvnandhobbs68]

I'm interested in learning more about this, too.

Because you’re gonna have to dance around noncompetes with whatever job you’re at. If you’re at a completely inpatient job it’s less of an issue but very few jobs with any outpatient component are gonna be cool with you setting up shop on the side in the same city (so essentially diverting patients that you could be seeing through them instead).

 

[splik]

Also my saying $400/hr for hour-long visits is not achievable is again coming from someone with no PP experience. If others have different experiences I'd love to know!

In my area, Medicare pays over $210 for a 99214+90833 so that works out at $420/hr for two patients. Not bad at all.
It would be unusual to get $400 from an insurance company for hour long visits (which is usually 45mins or 50mins depending on geography, its unusual for people to do true 60min visits)
That said, in some locales the best insurances pay $350-400 for a new patient 60 minute 99205 visit.

What are the advantages of accepting insurance if you're running a PP? Why not just start a part-time, cash only PP on the side while you keep your day job? It may take longer, but I don't see the point of dealing with insurance in PP, I thought the whole point of PP was to cut out the middle man.

If you have a part-time private practice, or a psychotherapy (particularly if dynamic or analytically oriented) focused practice, or want to have a small practice focused on providing boutique care to a limited number of patients you should not accept insurance. If you are in an area where there is only one commercial insurance provider it is also probably not a good idea to take insurance as a solo practitioner (there are many counties with only one insurance provider and because there is no competition compensation is significantly depressed).

However there are many reasons to consider taking insurance:
- you want to fill up quickly
- you want to have a medication focused practice
- you want to have a high volume practice
- you want to offer your services to a larger range of the population
- you want patients to be able to use their insurance to see you
- you live in an area where patients expect to be able to use their insurance
- you are focused on or want to offer TMS (you can also be cash only for everything else and accept insurance for TMS only)
- you want to have a large practice with multiple psychiatrists or NPs, or have a large number of therapists etc.

If you are going to take insurance it is better to do as part of a group than on your own. You can still have a solo practice but share contracts with insurance companies with other physicians in order to get a better rate.

 

[splik]

I charge $400/hr in a city where other charge $500/hr for initial eval. Now, filling up a practice at this hourly rate is another story. I'm happy with a small cohort of private patients.

Our former NP is charging $450/hr for an intake in their cash pp...

 

[jbomba]

@splik how difficult (or how long) would it be to fill with insurance patients such that you can generate 420/hr x 40 hours a week?

 

[splik]

@splik how difficult (or how long) would it be to fill with insurance patients such that you can generate 420/hr x 40 hours a week?

That rate is based on having an established practice (i.e. seeing follow ups, it will be less for news and most practices will see at least some news and to begin with you will mainly be seeing new patients). It would also be unlikely that all patients would be a level 4 epseically if you had a lot of stable straightforward patients. It is also based on medicare rates in the most expensive locale in the country. There is a geographic price conversion taking CoL into account so the rate will be less elsewhre (for example about $350 in most other parts of the country outside of major metro areas where it will be between 380-400). Also it would be unusual for someone to be doing 40 clinical hours a week (which would be like working 50+ hours per week). 32 clinical hours is considered full time.

Geography also makes a big difference to how fast you will fill, and insurance reimbursement. In many areas insurances pay below medicare rates to private practitioners. Meanwhile big hospital systems charge commercial insurance 3x medicare rate as standard and the PPO plans pay it.

Finally, you need to factor in no shows and non-payment. Just because you bill, does not mean you will collect. However I have to say I have never had medicare deny me payment in the outpatient setting whereas it is quite common to be denied payment for some of less standard codes. In some cases commercial plans say the services are covered (I always check that the anticipated CPT codes are covered prior to initial visit) and then they refuse to pay!

 

[TexasPhysician]

@splik how difficult (or how long) would it be to fill with insurance patients such that you can generate 420/hr x 40 hours a week?

With 2 patients/hr, never in my geography. I’d love to know where in the Midwest or South Central US gets such a rate because I’ve never seen it.

 

[jbomba]

With 2 patients/hr, never in my geography. I’d love to know where in the Midwest or South Central US gets such a rate because I’ve never seen it.

What would be standard rate in your area for two an hour?

 

[himomitsme]

I charge $400/hr in a city where other charge $500/hr for initial eval. Now, filling up a practice at this hourly rate is another story. I'm happy with a small cohort of private patients.

This seems ideal, if anything you can schedule your PP patients on a couple days and work part time elsewhere until your practice grows.

Is this the norm in a lot of affluent areas in the metro or suburbs?

I plan on practicing in San Diego eventually, just been trying to look up all the psychs in the area and see how they charge, whether it’s insurance or cash.

Charging cash to avoid the insurance headaches seems the best route, even if it takes a while to build a practice full time.

 

[dl2dp2]

@splik how difficult (or how long) would it be to fill with insurance patients such that you can generate 420/hr x 40 hours a week?

With 2 patients/hr, never in my geography. I’d love to know where in the Midwest or South Central US gets such a rate because I’ve never seen it.

Pretty accurate. You won't be able to get $420/hr as a gross revenue doing 2 patients per hour taking insurance in most markets, as there will be no shows, non-collections, etc. Insurance practices are reimbursed in a way that really incentivizes outsourcing to midlevels for therapy and even med mgmt with NPs. It's hard to get to an EBITA > 350k with only insurance as a solo practitioner work 40 hours a week. A single MD as a source of referral can probably fill about 2-3 FTE of NP, or 2-3 FTE of PhD. If you take a 20% profit margin off their billing plus you do 20 hours admin with 20hrs clinical for more challenging case, you can reasonably get to an EBITA > 500k. Seems more trouble than it's worth tho...I know people who are doing this and I personally am not envious of this type of arrangement.

Many cash solo practices have EBITA of >500k--which after paying a typical psychiatrist salary ~ 300k with fringe, end up with a net owners margin around 100-200k per psychiatrist, which is roughly the correct math. Many threads have been posted on this topic. IMO, most cash solo practices can have an EBITA ~ 250-350k at year 5, but I don't have data to back it up. A lot of solo cash people like variety so take side gigs.

Lets say you have two practices one takes insurance and has 1000 patients and a final owners profit of 100k, and the other is a solo practice that gets you the same numbers with 100 patients, the first practice will be much more attractive to private equity if you want to sell. Still, typical valuation in this industry is 2-3x revenue at most. So we are talking 500k net value at exit for building a practice with 5-10 employees, which takes about 5 years. You'd have to franchise to hope that this gets you to retirement. This is why this is not very ideal for most psychiatrists out there. If the differential is much larger (i.e. in surgical specialties), solo/small group would be very uncommon. This is also why even large hospitals mostly don't care about psychiatrists and have small psychiatry depts, and sometimes just 1099 psychiatry altogether. A single neurosurgeon can generate maybe 1M of profit margin all considered whereas a single psychiatrist can only generate 200k. Psychiatric services are a very tiny percent of a hospital system's overall budgetary consideration.

This is not true though for mental health as a part of total healthcare consumption, which is actually very substantial (something like 10%). Most of it is just scattered not in big systems. People have been trying to grow this (insurance-based mental health) more exponentially rather than linearly in other ways (i.e. telemedicine, etc) to capture value even before COVID--so far this seems to be a dud. This is also why at some frequency a solo psychiatrist can generate EBITA > one neurosurgeon--the money is outside of "the system". My conjecture is there's a big difference in quality in terms of customer service between the treatment models (NP vs. MD, etc), and the math just doesn't work out because of how low insurance is reimbursing. We are desperately in need of practice model innovation in this field, IMO.

This seems ideal, if anything you can schedule your PP patients on a couple days and work part time elsewhere until your practice grows.

Is this the norm in a lot of affluent areas in the metro or suburbs?

This is the norm. Eventually, people exit facility jobs once their practice fills up. This HAS been the norm for at least 20 years, and I don't see how it will change. This is why most facility attendings are very young, and even in large systems it's hard to retain psychiatrists. Full-time facility jobs are usually unattractive--they can tag on a non-compete, but that just makes people want to leave faster. It seems that more recently the development has been facilities adding on cash-only components as a form of consolidation rather than the other way around. So if you successfully run a practice on your own, you end up more marketable later on if you want a facility job.

 

[himomitsme]

Pretty accurate. You won't be able to get $420/hr as a gross revenue doing 2 patients per hour taking insurance in most markets, as there will be no shows, non-collections, etc. Insurance practices are reimbursed in a way that really incentivizes outsourcing to midlevels for therapy and even med mgmt with NPs. It's hard to get to an EBITA > 350k with only insurance as a solo practitioner work 40 hours a week. A single MD as a source of referral can probably fill about 2-3 FTE of NP, or 2-3 FTE of PhD. If you take a 20% profit margin off their billing plus you do 20 hours admin with 20hrs clinical for more challenging case, you can reasonably get to an EBITA > 500k. Seems more trouble than it's worth tho...I know people who are doing this and I personally am not envious of this type of arrangement.

Many cash solo practices have EBITA of >500k--which after paying a typical psychiatrist salary ~ 300k with fringe, end up with a net owners margin around 100-200k per psychiatrist, which is roughly the correct math. Many threads have been posted on this topic. IMO, most cash solo practices can have an EBITA ~ 250-350k at year 5, but I don't have data to back it up. A lot of solo cash people like variety so take side gigs.

Lets say you have two practices one takes insurance and has 1000 patients and a final owners profit of 100k, and the other is a solo practice that gets you the same numbers with 100 patients, the first practice will be much more attractive to private equity if you want to sell. Still, typical valuation in this industry is 2-3x revenue at most. So we are talking 500k net value at exit for building a practice with 5-10 employees, which takes about 5 years. You'd have to franchise to hope that this gets you to retirement. This is why this is not very ideal for most psychiatrists out there. If the differential is much larger (i.e. in surgical specialties), solo/small group would be very uncommon. This is also why even large hospitals mostly don't care about psychiatrists and have small psychiatry depts, and sometimes just 1099 psychiatry altogether. A single neurosurgeon can generate maybe 1M of profit margin all considered whereas a single psychiatrist can only generate 200k. Psychiatric services are a very tiny percent of a hospital system's overall budgetary consideration.

This is not true though for mental health as a part of total healthcare consumption, which is actually very substantial (something like 10%). Most of it is just scattered not in big systems. People have been trying to grow this (insurance-based mental health) more exponentially rather than linearly in other ways (i.e. telemedicine, etc) to capture value even before COVID--so far this seems to be a dud. This is also why at some frequency a solo psychiatrist can generate EBITA > one neurosurgeon--the money is outside of "the system". My conjecture is there's a big difference in quality in terms of customer service between the treatment models (NP vs. MD, etc), and the math just doesn't work out because of how low insurance is reimbursing. We are desperately in need of practice model innovation in this field, IMO.



This is the norm. Eventually, people exit facility jobs once their practice fills up. This HAS been the norm for at least 20 years, and I don't see how it will change. This is why most facility attendings are very young, and even in large systems it's hard to retain psychiatrists. Full-time facility jobs are usually unattractive--they can tag on a non-compete, but that just makes people want to leave faster. It seems that more recently the development has been facilities adding on cash-only components as a form of consolidation rather than the other way around. So if you successfully run a practice on your own, you end up more marketable later on if you want a facility job.

Is it common to get full time facility jobs at about 30 hours a week with benefits/pto? Even if pay is like 200?

At least in Southern Cal, seems like most facilities will pay 250k+ with benefits/PTO but require 40 hour work weeks.

Ideally I would be able to run my own practice, limit myself to 30-35 hours a week practicing how I want, but seems like the hassles of running your own practice seem significant (although less so than other specialties).

Because 30-35 patient hours is one thing, but if you own your own PP, seems like at the end of the day you are dedicating a ton of time outside patient hours to grow or maintain your practice.

Whereas employed jobs seems like when the clock strikes that magic number you’re done for the day, but you are at the mercy of your employer on how to practice.

Just trying to figure out the best model for myself in the future. Ideally I would work 30 hours a week, salary of 200k with benefits PTO is fine, as I ideally would spend the rest of my free time with my family, and managing real-estate rental properties. Psych seems like the obvious best specialty to have the flexibility for the over other specialties

 

[sloh]

Is it common to get full time facility jobs at about 30 hours a week with benefits/pto? Even if pay is like 200?

At least in Southern Cal, seems like most facilities will pay 250k+ with benefits/PTO but require 40 hour work weeks.

Ideally I would be able to run my own practice, limit myself to 30-35 hours a week practicing how I want, but seems like the hassles of running your own practice seem significant (although less so than other specialties).

Because 30-35 patient hours is one thing, but if you own your own PP, seems like at the end of the day you are dedicating a ton of time outside patient hours to grow or maintain your practice.

Whereas employed jobs seems like when the clock strikes that magic number you’re done for the day, but you are at the mercy of your employer on how to practice.

Just trying to figure out the best model for myself in the future. Ideally I would work 30 hours a week, salary of 200k with benefits PTO is fine, as I ideally would spend the rest of my free time with my family, and managing real-estate rental properties. Psych seems like the obvious best specialty to have the flexibility for the over other specialties

I wouldn’t take an employed position in SoCal for 250k given your options as a psychiatrist. I’m PM&R, live in LA, and previously worked a W2 with Kaiser. It’s not enough money IMO to live in a nice neighborhood with good schools and raise a family with kids.

 

[nrmp]

In my area, Medicare pays over $210 for a 99214+90833 so that works out at $420/hr for two patients. Not bad at all.
It would be unusual to get $400 from an insurance company for hour long visits (which is usually 45mins or 50mins depending on geography, its unusual for people to do true 60min visits)
That said, in some locales the best insurances pay $350-400 for a new patient 60 minute 99205 visit.


If you have a part-time private practice, or a psychotherapy (particularly if dynamic or analytically oriented) focused practice, or want to have a small practice focused on providing boutique care to a limited number of patients you should not accept insurance. If you are in an area where there is only one commercial insurance provider it is also probably not a good idea to take insurance as a solo practitioner (there are many counties with only one insurance provider and because there is no competition compensation is significantly depressed).

However there are many reasons to consider taking insurance:
- you want to fill up quickly
- you want to have a medication focused practice
- you want to have a high volume practice
- you want to offer your services to a larger range of the population
- you want patients to be able to use their insurance to see you
- you live in an area where patients expect to be able to use their insurance
- you are focused on or want to offer TMS (you can also be cash only for everything else and accept insurance for TMS only)
- you want to have a large practice with multiple psychiatrists or NPs, or have a large number of therapists etc.

If you are going to take insurance it is better to do as part of a group than on your own. You can still have a solo practice but share contracts with insurance companies with other physicians in order to get a better rate.

How often that you could actually do 99214+90833? Is there a possibility of more audits from insurances?

 

[AD04]

Pretty accurate. You won't be able to get $420/hr as a gross revenue doing 2 patients per hour taking insurance in most markets, as there will be no shows, non-collections, etc. Insurance practices are reimbursed in a way that really incentivizes outsourcing to midlevels for therapy and even med mgmt with NPs. It's hard to get to an EBITA > 350k with only insurance as a solo practitioner work 40 hours a week. A single MD as a source of referral can probably fill about 2-3 FTE of NP, or 2-3 FTE of PhD. If you take a 20% profit margin off their billing plus you do 20 hours admin with 20hrs clinical for more challenging case, you can reasonably get to an EBITA > 500k. Seems more trouble than it's worth tho...I know people who are doing this and I personally am not envious of this type of arrangement.

Many cash solo practices have EBITA of >500k--which after paying a typical psychiatrist salary ~ 300k with fringe, end up with a net owners margin around 100-200k per psychiatrist, which is roughly the correct math. Many threads have been posted on this topic. IMO, most cash solo practices can have an EBITA ~ 250-350k at year 5, but I don't have data to back it up. A lot of solo cash people like variety so take side gigs.

Lets say you have two practices one takes insurance and has 1000 patients and a final owners profit of 100k, and the other is a solo practice that gets you the same numbers with 100 patients, the first practice will be much more attractive to private equity if you want to sell. Still, typical valuation in this industry is 2-3x revenue at most. So we are talking 500k net value at exit for building a practice with 5-10 employees, which takes about 5 years. You'd have to franchise to hope that this gets you to retirement. This is why this is not very ideal for most psychiatrists out there. If the differential is much larger (i.e. in surgical specialties), solo/small group would be very uncommon. This is also why even large hospitals mostly don't care about psychiatrists and have small psychiatry depts, and sometimes just 1099 psychiatry altogether. A single neurosurgeon can generate maybe 1M of profit margin all considered whereas a single psychiatrist can only generate 200k. Psychiatric services are a very tiny percent of a hospital system's overall budgetary consideration.

This is not true though for mental health as a part of total healthcare consumption, which is actually very substantial (something like 10%). Most of it is just scattered not in big systems. People have been trying to grow this (insurance-based mental health) more exponentially rather than linearly in other ways (i.e. telemedicine, etc) to capture value even before COVID--so far this seems to be a dud. This is also why at some frequency a solo psychiatrist can generate EBITA > one neurosurgeon--the money is outside of "the system". My conjecture is there's a big difference in quality in terms of customer service between the treatment models (NP vs. MD, etc), and the math just doesn't work out because of how low insurance is reimbursing. We are desperately in need of practice model innovation in this field, IMO.

Revenue, EBITA, throwing around big numbers as if they're play things. I love this naughty business talk.

 

[himomitsme]

I wouldn’t take an employed position in SoCal for 250k given your options as a psychiatrist. I’m PM&R, live in LA, and previously worked a W2 with Kaiser. It’s not enough money IMO to live in a nice neighborhood with good schools and raise a family with kids.

What do you think the minimum would be?

My concern is 40 hours wouldn’t leave a lot if time for side hustles/hobbies.

But if 40 hours is more or less the only way to get paid what you gotta get paid then that’s what I gotta do

 

[Shufflin]

This seems ideal, if anything you can schedule your PP patients on a couple days and work part time elsewhere until your practice grows.

Is this the norm in a lot of affluent areas in the metro or suburbs?

I plan on practicing in San Diego eventually, just been trying to look up all the psychs in the area and see how they charge, whether it’s insurance or cash.

Charging cash to avoid the insurance headaches seems the best route, even if it takes a while to build a practice full time.

I'd say the line isn't so much metro vs suburb. I hate to say it, but look for the cities that are well-known for being really affluent. Its a cliché but that's where you'll have the best chance to succeed.

After you start rolling in the dough be sure to include some pro-bono work for those with no funding.

 

[clausewitz2]

How often that you could actually do 99214+90833? Is there a possibility of more audits from insurances?

Probably a majority of my private practice follow-ups are 99214+90833. I do 30 minute follow-up appointments, though.

 

[liquidshadow22]

Do insurance companies ever do reviews of notes for determining out of network reimbursement for superbills submitted by pts in a cash practice?

 

[sloh]

What do you think the minimum would be?

My concern is 40 hours wouldn’t leave a lot if time for side hustles/hobbies.

But if 40 hours is more or less the only way to get paid what you gotta get paid then that’s what I gotta do

I think 350k is a nice threshold to shoot for. It is not cheap to live in the nicer parts of SoCal. And if you have kids, you definitely want them to go to one of the better public schools in good neighorhoods. The difference in quality and more importantly peers between schools is quite significant depending on where you live.

 

[Attending1985]

Probably a majority of my private practice follow-ups are 99214+90833. I do 30 minute follow-up appointments, though.

All my follow ups are 30 minutes, mostly 99214 without any add on codes and I just get a letter from some company bcbs hired saying I bill more complexity than my peers and they will be continuing to follow me and possible ask for chart review

 

[clausewitz2]

All my follow ups are 30 minutes, mostly 99214 without any add on codes and I just get a letter from some company bcbs hired saying I bill more complexity than my peers and they will be continuing to follow me and possible ask for chart review

Sheesh, that stinks. As far as my situation as concerned, in a couple months I will not be billing BCBS in any way, shape or form and based on informal surveys in my area 99214+90833 is close to the modal outpatient follow-up code(s) among private practice folks here. I am also extremely persnickety about hitting required elements and providing timed documentation of add-on psychotherapy. But again, if you ask detailed questions about sleep and substance use, it's really not hard to have a whole bunch of folks with at least three legitimate problems that you can address repeatedly over time.


I am also finding myself increasingly asking about headaches which is another opportunity to uncover something to address but that is a whole other story.

 

[romanticscience]

All my follow ups are 30 minutes, mostly 99214 without any add on codes and I just get a letter from some company bcbs hired saying I bill more complexity than my peers and they will be continuing to follow me and possible ask for chart review

I got one too but in regard to new office visit coding (9920x). Apparently I should be coding some new patients as a 99203, ~10% of the time, which I never do.

 

[Attending1985]

I got one too but in regard to new office visit coding (9920x). Apparently I should be coding some new patients as a 99203, ~10% of the time, which I never do.

I have never billed a 99203, mostly 99204 and some 99205. I despise insurance companies. The letter was a threat to downcode or Ill make trouble for you.