Private Practice Musings

[splik]

I recently drank the private practice Kool aid and while I'm no expert being new to the game, wanted to share my thoughts and advice on starting a practice (these are just my opinions and I'm sure others will disagree):

1. I recommend keeping costs low. Very low. Even if your goal is providing TMS etc (which I'm exploring for the future), start simple.
2. See if you can sublet an office to begin with, or even just start with telehealth and go from there (though I do anticipate many people will be wanting in person services and it is ideal to offer both). Don't start out with some expensive office especially if you are in a high CoL area.
3. If you have any thought of doing PP at some point in the future, get disability insurance now. One of my main expenses is disability insurance now. If I had gotten it when I was younger and a resident it would have been 1/3-1/2 what I'm paying now. I've calculated even if only became disabled in the last 4 yrs of my career, it would pay for itself vs putting that money in VTSAX etc even if you had to sue them to cover you. Which is to say it is absolutely worth it to get own occupation disability insurance for most psychiatrists. You can always cancel later if you think you have enough money and willing to take the risk.
4. Health insurance is v expensive if you can't get on your partner's plan.
5. Don't spend lots of money on a website. I've paid about $10/month and made it myself with a website builder and it looks pretty good. I've rarely seen someone with a professional made website that looked like it was worth it (usually they look worse than mine lol)
6. If your goal is a cash practice DO NOT start off accepting insurance under any circumstances. It much more efficient, economical, and sanity preserving not to deal with insurance if you are starting a solo practice. It is also MUCH EASIER to go from cash practice to insurance than the other way around. If you have a cash practice, insurance companies may offer you to join their network at much better rates than they would pay if you tried to join on your own. Also even if you have a cash practice you can still grow to do TMS by either spinning off neuromodulation into an insurance based practice OR doing single case agreements for TMS. I have also had good success at getting insurance companies to reimburse my pts for my full cash amount (it's called a network gap exception or "non-participating provider" authorization). Also difficult for insurance pts to transition to cash only. It will be a nightmare to get off panels once you are on them. You will be dead before they remove you!!! They call them ghost networks for a reason - most of the psychiatrists are literally ghosts.
7. DO accept credit cards etc. Round where I am I have been surprised how many pts have HSA cards in particular. These patients have high deductibles so they often have to pay $5000k+ before their insurance would cover in network care! Make sure to set your fees to account for CC fees.
8. Take advantage of offers from credit card processing companies. I got $20k free in processing fees with Stripe. Stripe doesn't negotiate but others will if you can show them a lower offer.
9. Encourage patients to pay by ACH payments especially if you have a therapy practice. It avoids credit card fees.
10. Get payment in advance of the appointment. I am very disorganized and would never get paid otherwise. If pts don't pay at least 48hrs before, appointment is canceled.
11. Consider offering discounts to patients with regular sessions who pay in advance. I offer 10% discount for twice weekly or more pts who pay for the whole month ahead of time (only ACH or wire transfers).
12. Don't set up a SEP-IRA. Set up a solo 401k so you can contribute to your back door Roth. Consider setting up a defined benefit plan.
13. Find a good accountant. This is one area where it's okay to spend money but don't get fleeced.
14. You probably don't need an attorney. A good accountant can help and your malpractice carrier will help with much of the rest.
15. Don't skimp on malpractice insurance either. That said, I recommend only getting the part time plan to begin with, and then upgrading once you actually work more that 20hrs pp.
16. Inform patients ahead of time that if they dispute credit card charges you will defend yourself with the minimum necessary information disclosed to the credit card company.
17. I recommend stating on your website etc that you don't prescribe controlled drugs. You can still prescribe controlled drugs but this *might* help avoid a flurry of drug seekers. Though somehow almost all pts coming to me on controlled drugs often multiple lol
18. Don't just accept any patients because you are scared of not filling. Be selective. Will save a lot of headaches in the long run. Not worth it to take on unsuitable or red flag patients.
19. Consider including a personality disorder screener such as the IPDE screener or SCID-5-SPQ in your intake paperwork. I like working with many types of PD but it helps to head off issues and screen out certain pts early.
20. Offer to do some talks on psych topics for other physicians.
21. Remember to let your psychiatry colleagues know you are accepting pts.
23. PCPs and specialist physicians are likely a better source of referral than therapists.
24. Email is a good way of contacting people to let them know you are available. I felt really weird and awkward about this but was surprised to find some people were excited to receive my info. I already had the info for the physicians I wanted to contact, and found the info for psychologists on the ABPP and state psychological association directory.
25. I wouldn't spend money on things like advertising on SEO management to begin with. That can come later if needed. The lower you can keep your costs, the more breathing room you have for your practice to grow.
26. Avoid using Alma, Headway, SonderMind, Grow Therapy or any of these other companies if you can avoid them. They will be the death knell of the profession.
27. Try to diversify your offerings beyond seeing patients for ongoing care. I also offer second opinion chart reviews nationally and internationally, provide one time consults, extended evals for complex cases (6-8hrs), consultation to therapists and other physicians, supervision, talks/lectures, consulting regarding documentation and coding/billing, and do forensic work. This diversity keeps me feeling invigorated and provides good revenue streams beyond direct patient care.
28. Consider providing some pro bono or low fee/sliding scale appointments in your practice. Still figuring out the best way to do this as was very annoyed when one pt who I said I would see for a pro bono consult canceled less than 24hrs before. May start asking for a small deposit.
29. Take the down time to work on admin tasks, building your website, building your brand, networking, reading, and doing courses. Am doing several therapy trainings which has been great.

Have not lost any money in the months I have left my job. It does help that I already had an established reputation, inbuilt referral source from my last job, some patients following me into pp, diversified revenue streams and most of all kept my expenses low.

BTW, I was most always set on academic type practice, private practice was never on the horizon for me but it's going well thus far (brought in an average of 10k/month after expenses for first 3 months and have mostly not been working). I'm still in the honeymoon phase but I feel like I have my dream job (mostly). My physical and mental health are much better as is my work-life balance. Am worried about how impending recession and wide scale layoffs will impact fledgling practice. That said, I think you have to have some business savvy though many people seem to get by with little sense of it. I also took some free online courses in accounting and marketing in my down time. If you just want to focus on seeing pts and switching off at the end of the day, having your own private practice may not be for you.

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[ksharp33]

Great information.

Which EMR did you go with?
What are your rates?

 

[dl2dp2]

Great information.

Which EMR did you go with?
What are your rates?

The best place to find location-specific out of network reimbursement/fee is from Welcome to FAIR Health

The best place to find insurance-driven reimbursement rate is Medicare's website. If you base your calculation on that number you might be pleasantly surprised.

EMR is a small piece of the puzzle. They typically cost around $100 a month. Any number of vendors with EPCS would work well.

 

[allantois]

Very true about therapists not referring much to psych. They will have a full-on manic patient in-front of them and most will still fail to refer

 

[Psychresy]

The best place to find location-specific out of network reimbursement/fee is from Welcome to FAIR Health

The best place to find insurance-driven reimbursement rate is Medicare's website. If you base your calculation on that number you might be pleasantly surprised.

EMR is a small piece of the puzzle. They typically cost around $100 a month. Any number of vendors with EPCS would work well.

Are you saying one should base their cash rates somewhere between Medicare and fair health?

 

[Psychresy]

I recently drank the private practice Kool aid and while I'm no expert being new to the game, wanted to share my thoughts and advice on starting a practice (these are just my opinions and I'm sure others will disagree):

1. I recommend keeping costs low. Very low. I think Sushi shot himself in the foot by spending extravagantly too early. Even if your goal is providing TMS etc (which I'm exploring for the future), start simple.
2. See if you can sublet an office to begin with, or even just start with telehealth and go from there (though I do anticipate many people will be wanting in person services and it is ideal to offer both). Don't start out with some expensive office especially if you are in a high CoL area.
3. If you have any thought of doing PP at some point in the future, get disability insurance now. One of my main expenses is disability insurance now. If I had gotten it when I was younger and a resident it would have been 1/3-1/2 what I'm paying now. I've calculated even if only became disabled in the last 4 yrs of my career, it would pay for itself vs putting that money in VTSAX etc even if you had to sue them to cover you. Which is to say it is absolutely worth it to get own occupation disability insurance for most psychiatrists. You can always cancel later if you think you have enough money and willing to take the risk.
4. Health insurance is v expensive if you can't get on your partner's plan.
5. Don't spend lots of money on a website. I've paid about $10/month and made it myself with a website builder and it looks pretty good. I've rarely seen someone with a professional made website that looked like it was worth it (usually they look worse than mine lol)
6. If your goal is a cash practice DO NOT start off accepting insurance under any circumstances. It much more efficient, economical, and sanity preserving not to deal with insurance if you are starting a solo practice. It is also MUCH EASIER to go from cash practice to insurance than the other way around. If you have a cash practice, insurance companies may offer you to join their network at much better rates than they would pay if you tried to join on your own. Also even if you have a cash practice you can still grow to do TMS by either spinning off neuromodulation into an insurance based practice OR doing single case agreements for TMS. I have also had good success at getting insurance companies to reimburse my pts for my full cash amount (it's called a network gap exception or "non-participating provider" authorization). Also difficult for insurance pts to transition to cash only. It will be a nightmare to get off panels once you are on them. You will be dead before they remove you!!! They call them ghost networks for a reason - most of the psychiatrists are literally ghosts.
7. DO accept credit cards etc. Round where I am I have been surprised how many pts have HSA cards in particular. These patients have high deductibles so they often have to pay $5000k+ before their insurance would cover in network care! Make sure to set your fees to account for CC fees.
8. Take advantage of offers from credit card processing companies. I got $20k free in processing fees with Stripe. Stripe doesn't negotiate but others will if you can show them a lower offer.
9. Encourage patients to pay by ACH payments especially if you have a therapy practice. It avoids credit card fees.
10. Get payment in advance of the appointment. I am very disorganized and would never get paid otherwise. If pts don't pay at least 48hrs before, appointment is canceled.
11. Consider offering discounts to patients with regular sessions who pay in advance. I offer 10% discount for twice weekly or more pts who pay for the whole month ahead of time (only ACH or wire transfers).
12. Don't set up a SEP-IRA. Set up a solo 401k so you can contribute to your back door Roth. Consider setting up a defined benefit plan.
13. Find a good accountant. This is one area where it's okay to spend money but don't get fleeced.
14. You probably don't need an attorney. A good accountant can help and your malpractice carrier will help with much of the rest.
15. Don't skimp on malpractice insurance either. That said, I recommend only getting the part time plan to begin with, and then upgrading once you actually work more that 20hrs pp.
16. Inform patients ahead of time that if they dispute credit card charges you will defend yourself with the minimum necessary information disclosed to the credit card company.
17. I recommend stating on your website etc that you don't prescribe controlled drugs. You can still prescribe controlled drugs but this *might* help avoid a flurry of drug seekers. Though somehow almost all pts coming to me on controlled drugs often multiple lol
18. Don't just accept any patients because you are scared of not filling. Be selective. Will save a lot of headaches in the long run. Not worth it to take on unsuitable or red flag patients.
19. Consider including a personality disorder screener such as the IPDE screener or SCID-5-SPQ in your intake paperwork. I like working with many types of PD but it helps to head off issues and screen out certain pts early.
20. Offer to do some talks on psych topics for other physicians.
21. Remember to let your psychiatry colleagues know you are accepting pts.
23. PCPs and specialist physicians are likely a better source of referral than therapists.
24. Email is a good way of contacting people to let them know you are available. I felt really weird and awkward about this but was surprised to find some people were excited to receive my info. I already had the info for the physicians I wanted to contact, and found the info for psychologists on the ABPP and state psychological association directory.
25. I wouldn't spend money on things like advertising on SEO management to begin with. That can come later if needed. The lower you can keep your costs, the more breathing room you have for your practice to grow.
26. Avoid using Alma, Headway, SonderMind, Grow Therapy or any of these other companies if you can avoid them. They will be the death knell of the profession.
27. Try to diversify your offerings beyond seeing patients for ongoing care. I also offer second opinion chart reviews nationally and internationally, provide one time consults, extended evals for complex cases (6-8hrs), consultation to therapists and other physicians, supervision, talks/lectures, consulting regarding documentation and coding/billing, and do forensic work. This diversity keeps me feeling invigorated and provides good revenue streams beyond direct patient care.
28. Consider providing some pro bono or low fee/sliding scale appointments in your practice. Still figuring out the best way to do this as was very annoyed when one pt who I said I would see for a pro bono consult canceled less than 24hrs before. May start asking for a small deposit.
29. Take the down time to work on admin tasks, building your website, building your brand, networking, reading, and doing courses. Am doing several therapy trainings which has been great.

Have not lost any money in the months I have left my job. It does help that I already had an established reputation, inbuilt referral source from my last job, some patients following me into pp, diversified revenue streams and most of all kept my expenses low.

BTW, I was most always set on academic type practice, private practice was never on the horizon for me but it's going well thus far (brought in an average of 10k/month after expenses for first 3 months and have mostly not been working). I'm still in the honeymoon phase but I feel like I have my dream job (mostly). My physical and mental health are much better as is my work-life balance. Am worried about how impending recession and wide scale layoffs will impact fledgling practice. That said, I think you have to have some business savvy though many people seem to get by with little sense of it. I also took some free online courses in accounting and marketing in my down time. If you just want to focus on seeing pts and switching off at the end of the day, having your own private practice may not be for you.

Great post. I'm also of the "lean start up" mind. How much do you realistically think you could get away with spending in overhead if mostly tele with a one day a week office rental?

Also I see people throw out numbers like 20% of revenue going to overhead. That never made much sense to me. Your overhead doesn't necessarily scale linearly. Not sure how overhead jumps from 40k at 200k revenue to 120k at 600k. Wheres that extra 80k going?

 

[mistafab]

Always so impressed with the thoughtfulness and usefulness of your posts. Thanks @splik

 

[dl2dp2]

Are you saying one should base their cash rates somewhere between Medicare and fair health?

Not necessarily. FairHealth is just surveyed on average. If you think you are better than average you can set a higher rate. It just gives you a sense of what's reasonable in your area.

People need to call you to consider your rates. I think that's the main barrier. That's a marketing problem not a pricing problem. There are many many ways to get people to call you and it's very location specific.

Some overheads do scale with the size of the practice. For example, you need to pay full-time med mal, which is about 50-80% more than half-time m med mal. If you have a full-time therapy-oriented cash practice, you should probably rent a more presentable office, etc. Insurance-based practices have other expenses that scale, such as billing, admin support, therapist hours, etc. All of that being said, you are not wrong in that cash-based psychotherapy-heavy, specialized practice in a major city is one of the sweet gigs in all of medicine because a lot of the expenses don't scale. You can rent a fancy office suite full-time that faces Central Park or on Wilshire Boulevard and it'll cost at MOST $5000 a month. In fact, commercial rents are dropping in price. And depending on your experience, etc., you *will* get fancy patients who can afford your fees. So this is one of the very very few gigs where you could reasonably be making 1M+ per year without running a substantial team as a solopreneur. Is this common? No. Nevertheless, it is technically *possible* and something you can aim for. 500k working <30 clinical hours a week is common (several posters on this forum). The reported average is around 350k, which makes me think that a "typical" (mode) outpatient cash PP psychiatrist works like 10-15 hours a week, lol. It's fair. It's a nice #LyingFlat specialty if you want that. Someone was talking about if it's possible to PP and chill and retire early and surf all day. And I was like well if you don't work maybe you should see your kid more, and he got all triggered. LOL.

#PrivatePracticeMusings

 

[theduderino]

Great post. I'm also of the "lean start up" mind. How much do you realistically think you could get away with spending in overhead if mostly tele with a one day a week office rental?

Also I see people throw out numbers like 20% of revenue going to overhead. That never made much sense to me. Your overhead doesn't necessarily scale linearly. Not sure how overhead jumps from 40k at 200k revenue to 120k at 600k. Wheres that extra 80k going?

I have an insurance based practice. My overhead is around 10% in my first 6 months of work, including a bunch of start up related purchases (e.g furniture). I rent a room from a therapist for around $800/month. I probably do 60/40 telehealth/in-person. I do all the billing/scheduling myself. EMR is around $100. various other monthly odds and ends (e.g google workspace, website, srfax etc) are around $100.

Some variable costs will go up with increased revenue - e.g credit card fees. Your fixed costs do not necessarily go up with more revenue, but you may want to hire more admin help the busier you get. At some point it makes sense to do this as you can see an additional patient/do side-work instead of some annoying admin task. In the beginning you will likely have blocks of free time to do all of this stuff and it also helps you learn the ins and outs of the business side of things. When you actually get busy, then you can be more surgical in terms of what you actually want to spend money on in terms of outside help. In my case I'm starting to pay someone an hourly rate, a few hours biweekly, to help input co-pays and chase down insurance issues.

 

[FlowRate]

I recommend stating on your website etc that you don't prescribe controlled drugs.

If you feel comfortable, how directly (vs euphemistically) do you state this on your website? I've never actually seen that phrase on any psychiatrist's website, even ones who I suspect have relatively strict CS standards (e.g. primarily psychodynamic therapy oriented and underemphasizing medications on their site)

SonderMind

Just curious what your (apparently negative) experience has been with them? They've been a nice network extension for therapy for us--a lot of my patients seem to have actually found good therapists through them and been able to see those therapists between twice a week and once every two weeks.

 

[ArdorAyurveda]

Are you doing solo private practice? Do you have any office staff?

 

[splik]

Which EMR did you go with?
What are your rates?

As I mentioned in my post, I used Charm which is basically free for <50 encounters a month and seems to do the trick. The EPCS is $450 for 24months.
You can message me for my fee schedule but basically it's $1500-2000 for an initial consultation, $3000-4000 for an extended consultation, and $500/hr for follow ups. Rates will go up by 3% in Jan. My rates are lower than average for my subspecialty and location.

If you feel comfortable, how directly (vs euphemistically) do you state this on your website? I've never actually seen that phrase on any psychiatrist's website, even ones who I suspect have relatively strict CS standards (e.g. primarily psychodynamic therapy oriented and underemphasizing medications on their site)

Just curious what your (apparently negative) experience has been with them? They've been a nice network extension for therapy for us--a lot of my patients seem to have actually found good therapists through them and been able to see those therapists between twice a week and once every two weeks.

I have an FAQ section and the answer to "Do you rx controlled drugs?" is "No." Who knows if it makes a difference.
I dont have anything against SonderMind in terms of them providing services, but these sorts of companies are basically taking over the mental health sphere, limiting the means of production that we traditionally have. If these companies take over, will be very hard for people to have their own insurance based practices.

Great post. I'm also of the "lean start up" mind. How much do you realistically think you could get away with spending in overhead if mostly tele with a one day a week office rental?

Also I see people throw out numbers like 20% of revenue going to overhead. That never made much sense to me. Your overhead doesn't necessarily scale linearly. Not sure how overhead jumps from 40k at 200k revenue to 120k at 600k. Wheres that extra 80k going?

My main practice costs were malpractice, DEA, and EPCS. My main other expenses are health insurance and disability insurance. I think you can keep things pretty bare bones to begin with though once you are more established I think it will make sense for certain costs to increase. I pay for Zoom (had a good deal) but you could even use free version of doxy.me.

Are you saying one should base their cash rates somewhere between Medicare and fair health?

Fair Health is not really relevant to private practice as the numbers are based on what insurances pay big box shops. The numbers are also not specialty specific (except for things like 90792 or therapy add on codes). The cash rate for big box shops in my area is half of what insurance pays (and thus half the fair health rates). It's nice to see the numbers, but I would base your cash rates on 1) how much you want to earn 2) how many hours you want to work 3) how many weeks a yr you want to work 4) what your expenses are. Then map your rate on the usual and customary rates in your area (look on PT, practice websites, and ask colleagues what they charge) to adjust accordingly. Specialists (e.g. CAP, addictions) can charge more than general psychiatrists.

Are you doing solo private practice? Do you have any office staff?

Hopefully it is evident from my post that I am currently doing solo cash based private practice. I do not have any office staff. I did try to hire a virtual assistant to do 4hrs a week (with plan to increase hours as I go) but it didn't work out. If you value your time, it does make sense to have an assistant. I'm quite disorganized so I think it will be helpful for me but it's not been a big deal. If you have a smaller therapy oriented practice then you could do without. I do respond to initial inquiries myself and will continue to do so once I get an assistant. I do think this an area not to skimp on either - if you pay peanuts, you get monkeys.

 

[dl2dp2]

Fair Health is not really relevant to private practice as the numbers are based on what insurances pay big box shops. The numbers are also not specialty specific (except for things like 90792 or therapy add on codes). The cash rate for big box shops in my area is half of what insurance pays (and thus half the fair health rates). It's nice to see the numbers, but I would base your cash rates on 1) how much you want to earn 2) how many hours you want to work 3) how many weeks a yr you want to work 4) what your expenses are. Then map your rate on the usual and customary rates in your area (look on PT, practice websites, and ask colleagues what they charge) to adjust accordingly. Specialists (e.g. CAP, addictions) can charge more than general psychiatrists.

I agree with everything else you say except this point. Have you checked the FAIRHealth number for yourself? To me it's actually reasonably fair. I.e. it's higher than the number you are listing and it specifies if it's in or out of network.

 

[forchinet121]

Not necessarily. FairHealth is just surveyed on average. If you think you are better than average you can set a higher rate. It just gives you a sense of what's reasonable in your area.

People need to call you to consider your rates. I think that's the main barrier. That's a marketing problem not a pricing problem. There are many many ways to get people to call you and it's very location specific.

Some overheads do scale with the size of the practice. For example, you need to pay full-time med mal, which is about 50-80% more than half-time m med mal. If you have a full-time therapy-oriented cash practice, you should probably rent a more presentable office, etc. Insurance-based practices have other expenses that scale, such as billing, admin support, therapist hours, etc. All of that being said, you are not wrong in that cash-based psychotherapy-heavy, specialized practice in a major city is one of the sweet gigs in all of medicine because a lot of the expenses don't scale. You can rent a fancy office suite full-time that faces Central Park or on Wilshire Boulevard and it'll cost at MOST $5000 a month. In fact, commercial rents are dropping in price. And depending on your experience, etc., you *will* get fancy patients who can afford your fees. So this is one of the very very few gigs where you could reasonably be making 1M+ per year without running a substantial team as a solopreneur. Is this common? No. Nevertheless, it is technically *possible* and something you can aim for. 500k working <30 clinical hours a week is common (several posters on this forum). The reported average is around 350k, which makes me think that a "typical" (mode) outpatient cash PP psychiatrist works like 10-15 hours a week, lol. It's fair. It's a nice #LyingFlat specialty if you want that. Someone was talking about if it's possible to PP and chill and retire early and surf all day. And I was like well if you don't work maybe you should see your kid more, and he got all triggered. LOL.

#PrivatePracticeMusings

If someone works 1099 two telehealth outpatient positions, how much would malpractice insurance be for the year approximately?

 

[dl2dp2]

If someone works 1099 two telehealth outpatient positions, how much would malpractice insurance be for the year approximately?

I can tell you PRMS part-time is only $2500. I think full-time is ~$10000. So, if you go over 20 hours a week on two telepsych assignments you need $10000. call them and ask: (800) 245-3333

 

[hippopotamusoath]

Great post. Are you able to talk at all about your internal emotional/professional progression towards wanting to do this? I suspect many of us are at different stages of grappling with the unsavory behemoth that is corporate medicine, and weighing our distaste for the system vs. our obligations to our family and our uncertainty about whether we can be successful in private practice. And then at some point, some people pull the trigger. I am always curious about how that process works. Hopefully that is not too abstract of a questions...

 

[FlowRate]

I dont have anything against SonderMind in terms of them providing services, but these sorts of companies are basically taking over the mental health sphere, limiting the means of production that we traditionally have. If these companies take over, will be very hard for people to have their own insurance based practices.

The incentives to monopolize/aggregate are certainly ruining a lot of healthcare at the moment. AMC's turning into regional oligopolies and increasing costs of care, CMG's (anesthesia and emergency most impacted) ruining traditional single specialty practice, etc.

I wonder if the modal controlled-meds pt knows what "controlled medications" means. Do you have a sense from the people who've come through your door so far?

Impressive fee range. Along the lines of Hippo's question, I'd be very interested, if you feel comfortable, to hear more about how you worked out the amount you charge patients on that more interpersonal/emotional level e.g. feeling "worth" $500/hr for patients who may have limited means but be seeking an expert in whatever issue they have.

 

[Merovinge]

Disability insurance has had some changes recently. Apparently most places have stopped providing gender neutral rates which is a big hit for female physicians (and in psychiatry this is 1/2 or more of us). When my wife and I went shopping, her risk class was somehow identical to mine despite being a surgeon, so I am flying without insurance while she is heavily insured (there is 0% chance the actuarial data actually supports us having equal disability rates, I will never believe the market priced this right). For most doctors that are the primary income earners in their family, definitely get disability insurance (unless you are already independently wealthy). Make sure it's own occupation and does not have limits on mental/psychiatric disability (which are common these days), we all know how often psychiatric disorders can cause disability.

I have heard that getting DI in residency is some big boon compared to being a young attending but I don't believe that's the case. Just do it early in your career, sooner is probably better than later in almost every case but don't feel bad if you are a few years in, that's a completely fine time to get things.

 

[calvnandhobbs68]

If someone works 1099 two telehealth outpatient positions, how much would malpractice insurance be for the year approximately?

Dependent on a lot of stuff, including your state, occurence vs claims made. It also ramps up over the course of several years as you become more "risky" as time goes on while you accumulate more patient encounters that could turn into lawsuits.

I was quoted (full time) anywhere from $1400-2300 first year claims made maxing out at $6700-11000 by year 5 and $3900-5400 year 1 occurrence to $6700-10800 year 5 occurrence. You can talk to a malpractice insurance broker and they'll give you printout of 6-8 different companies in like a day.

 

[Atreides]

As I mentioned in my post, I used Charm which is basically free for <50 encounters a month and seems to do the trick.

Did they let you sign a BAA to make it HIPAA compliant? When I set up my practice, they wouldn't do that for the free plan.

 

[TexasPhysician]

Great post. I'm also of the "lean start up" mind. How much do you realistically think you could get away with spending in overhead if mostly tele with a one day a week office rental?

Also I see people throw out numbers like 20% of revenue going to overhead. That never made much sense to me. Your overhead doesn't necessarily scale linearly. Not sure how overhead jumps from 40k at 200k revenue to 120k at 600k. Wheres that extra 80k going?

It depends on how quickly you want to build. It is MUCH easier to convert a potential patient if there is someone to answer the phone live. Also it helps to have a FT staff ensure patients complete paperwork, obtain payment, deal with other requests, etc. Anyone seriously wanting to build a practice should hire a FT staff in my opinion. At even $3k/month that’s $36k overhead with 1 staff. Add advertising costs, rent, cc fees, etc and that $40k estimate is closer to $70k+ year 1. That’s a much higher % of revenue, but the practice will grow much faster. That’ll help you get to your designated hours and expand to continue lowering that % overhead.

1 day/week rent, no office staff, etc has you building slowly and spending many uncompensated hours returning calls, chasing paperwork, handling billing, etc. I could work somewhere else for a cheap $150/hr or more and pay for a staff member for over 1 day. That’s much more efficient use of my time.

 

[forchinet121]

Dependent on a lot of stuff, including your state, occurence vs claims made. It also ramps up over the course of several years as you become more "risky" as time goes on while you accumulate more patient encounters that could turn into lawsuits.

I was quoted (full time) anywhere from $1400-2300 first year claims made maxing out at $6700-11000 by year 5 and $3900-5400 year 1 occurrence to $6700-10800 year 5 occurrence. You can talk to a malpractice insurance broker and they'll give you printout of 6-8 different companies in like a day.

Do you recommend claims made versus occurrence? I don’t really even know the difference between the two but wondering if there’s one clearly better

 

[Psychresy]

It depends on how quickly you want to build. It is MUCH easier to convert a potential patient if there is someone to answer the phone live. Also it helps to have a FT staff ensure patients complete paperwork, obtain payment, deal with other requests, etc. Anyone seriously wanting to build a practice should hire a FT staff in my opinion. At even $3k/month that’s $36k overhead with 1 staff. Add advertising costs, rent, cc fees, etc and that $40k estimate is closer to $70k+ year 1. That’s a much higher % of revenue, but the practice will grow much faster. That’ll help you get to your designated hours and expand to continue lowering that % overhead.

1 day/week rent, no office staff, etc has you building slowly and spending many uncompensated hours returning calls, chasing paperwork, handling billing, etc. I could work somewhere else for a cheap $150/hr or more and pay for a staff member for over 1 day. That’s much more efficient use of my time.

The thought is to bill 1-2 insurances, gross 420/hr, rent an office 1 day a week and off load billing for 6%. Will do this without staff until I'm closer to 12 hours a week.

 

[splik]

Disability insurance has had some changes recently. Apparently most places have stopped providing gender neutral rates which is a big hit for female physicians (and in psychiatry this is 1/2 or more of us). When my wife and I went shopping, her risk class was somehow identical to mine despite being a surgeon, so I am flying without insurance while she is heavily insured (there is 0% chance the actuarial data actually supports us having equal disability rates, I will never believe the market priced this right). For most doctors that are the primary income earners in their family, definitely get disability insurance (unless you are already independently wealthy). Make sure it's own occupation and does not have limits on mental/psychiatric disability (which are common these days), we all know how often psychiatric disorders can cause disability.

I have heard that getting DI in residency is some big boon compared to being a young attending but I don't believe that's the case. Just do it early in your career, sooner is probably better than later in almost every case but don't feel bad if you are a few years in, that's a completely fine time to get things.

All of the true own occupation DI companies (there are only 5 right now) place a 24 month limit on psychiatric/SUD disability (one is 24 months per episode of illness, the rest are lifetime). you have to pay substantially more to get unlimited psychiatric disability included. I can also tell you on the forensic end you have to fight tooth and nail to get lifetime psychiatric disability covered so even if your policy covers it, you'll need to get a lawyer probably and have forensic evals etc. The companies will hire private investigators to follow you etc The good news is psychiatric disability doesn't include TBI or dementia, and you may also get covered for the functional somatic syndromes.

It is true that getting DI in residency (OR as a brand new attending) is usually discounted, not just accounting for age. So I would advise anyone who thinks they might want to do PP in the future to get disability insurance as a resident (or now if not a resident). It is one of the big 3 personal finance mistakes I made (the others were cashing out my retirement plan from residency and not setting up a Roth IRA and then waiting too long to set up backdoor Roth).

 

[splik]

The thought is to bill 1-2 insurances, gross 420/hr, rent an office 1 day a week and off load billing for 6%. Will do this without staff until I'm closer to 12 hours a week.

Not sure where this 420/hr number comes from but it does not seem realistic with insurance unless you happen to have high paying insurance. you could probably get 420/hr with reasonable insurance doing 2 99214+90833 an hr, but you aren't going to be doing that. You are going to have to do 64 new evals (either 90792 or 99205) to fill 8 hours of 30 min q monthly follow up visits, more if you you're trying more (96 for 12 hours). New pt visits are going to pay in the range of $225-300 depending on the insurance and your area (possibly less). So you need to account for initial evals when calculating your gross hourly rate and you'll see it will be much less. If it were that straightforward, more people would accept insurance. This is not even accounting for no shows, non-payment, denials, pts not paying their copays or deductibles, disputes and chargebacks etc.

 

[forchinet121]

All of the true own occupation DI companies (there are only 5 right now) place a 24 month limit on psychiatric/SUD disability (one is 24 months per episode of illness, the rest are lifetime). you have to pay substantially more to get unlimited psychiatric disability included. I can also tell you on the forensic end you have to fight tooth and nail to get lifetime psychiatric disability covered so even if your policy covers it, you'll need to get a lawyer probably and have forensic evals etc. The companies will hire private investigators to follow you etc The good news is psychiatric disability doesn't include TBI or dementia, and you may also get covered for the functional somatic syndromes.

It is true that getting DI in residency (OR as a brand new attending) is usually discounted, not just accounting for age. So I would advise anyone who thinks they might want to do PP in the future to get disability insurance as a resident (or now if not a resident). It is one of the big 3 personal finance mistakes I made (the others were cashing out my retirement plan from residency and not setting up a Roth IRA and then waiting too long to set up backdoor Roth).

How much is disability insurance per year as a resident versus now for you?

 

[splik]

I wonder if the modal controlled-meds pt knows what "controlled medications" means. Do you have a sense from the people who've come through your door so far?

Impressive fee range. Along the lines of Hippo's question, I'd be very interested, if you feel comfortable, to hear more about how you worked out the amount you charge patients on that more interpersonal/emotional level e.g. feeling "worth" $500/hr for patients who may have limited means but be seeking an expert in whatever issue they have.

Not sure about the modal patient, but I do think my patients know what controlled drugs are. I have quite a few physician patients and other healthcare backgrounds who came to me on controlled drugs. But this is good feedback, I think I'll update to specifically state no opiates, stims, benzos and z-drugs (though I have no problem rx'ing them when indicated).

In terms of setting fees, as I posted above, I basically worked out how many clinical hours I wanted to work per week (20), how many weeks a yr I wanted to work (40), anticipated expenses (factored in generous 20% so didn't undershoot) and what I wanted to earn and that's how I got my number. I also considered what people were charging in my area for my specialty (though I'm actually the only person w/ said specialty in my immediate area), and I actually charge quite a bit lower than what some others do. Some of my patients rely on family members to help pay their bills. It does help that I see a lot of pts with somatoform disorders as they usually see value in paying for healthcare.

I've actually been quite surprised that many patients seem to expect to have to pay out of pocket in this area, understand the challenges of insurance, see value in paying for their care. It also helps when pts have HSA cards, good OON benefits (some of the companies have really good benefits for employees), and

I have referral lists for psychiatrists, therapists etc who charge less, do sliding scale, or accept insurance that I provide for those inquiring who can't afford my rates. I also provide one time consults and chart reviews so that is a way that some people are more affordably getting my input. I also partner with a company to provide expert chart reviews so some pts get that covered completely if their employer/partner's employer offers that benefit.

I do provide some pro bono services, as well as teaching students, residents, physicians, therapists, and am happy to provide curbsides to physicians etc so I do feel like I am providing my expertise in a way that helps patients who can't see me. I don't feel guilty about being private pay, but I do feel sad about that I'm not able to see as wide a range of patients as I did before. It was especially heartbreaking for me not to be able to take some of my long-term therapy pts with me into private practice due to financial and licensing reasons.

 

[rjs2131]

Not sure where this 420/hr number comes from but it does not seem realistic with insurance unless you happen to have high paying insurance. you could probably get 420/hr with reasonable insurance doing 2 99214+90833 an hr, but you aren't going to be doing that. You are going to have to do 64 new evals (either 90792 or 99205) to fill 8 hours of 30 min q monthly follow up visits, more if you you're trying more (96 for 12 hours). New pt visits are going to pay in the range of $225-300 depending on the insurance and your area (possibly less). So you need to account for initial evals when calculating your gross hourly rate and you'll see it will be much less. If it were that straightforward, more people would accept insurance. This is not even accounting for no shows, non-payment, denials, pts not paying their copays or deductibles, disputes and chargebacks etc.

Also for new evals - do your best to get 99417 add-on codes reimbursed. Will allow you to spend more time with new patients + get reimbursed for all the time you spend in/out of the visit on the day of the encounter. Can add anywhere from $100-200 per new eval depending on how much insurance is reimbursing for it.

 

[WisNeuro]

Do you recommend claims made versus occurrence? I don’t really even know the difference between the two but wondering if there’s one clearly better

In a nutshell, occurrence covers you for when the alleged incident happened, so you are protected by that policy down the road (generally) if you switch policies, retire, whatever. Claims made policy covers claims made while you have that active policy, so you'd theoretically need a tail if you retire, leave, whatever. Some nuances in there, but that is a 10k foot view.

 

[splik]

Also for new evals - do your best to get 99417 add-on codes reimbursed. Will allow you to spend more time with new patients + get reimbursed for all the time you spend in/out of the visit on the day of the encounter. Can add anywhere from $100-200 per new eval depending on how much insurance is reimbursing for it.

I think it is best to assume you won't get this paid for but it's very much dependent on plan and locality. United only pays for 99417 for esketamine. Anthem only pays for 99417 for specific diagnoses. Usually doesn't pay much ($35-45 per unit). Some insurances consider psychiatry an exclusion for 99417 which seems to be a violation of parity law.

 

[yoloswagpoop42069]

Absolutely FIRE details and what is an absolute must read.

What is your sub speciality that you charge 2k for initials? Forensics I’m assuming?

Thank you.

 

[calvnandhobbs68]

Also for new evals - do your best to get 99417 add-on codes reimbursed. Will allow you to spend more time with new patients + get reimbursed for all the time you spend in/out of the visit on the day of the encounter. Can add anywhere from $100-200 per new eval depending on how much insurance is reimbursing for it.

I have never seen insurance pay that much for 99417…it’s like 30-40 bucks in my area and yeah like splik said only half my insurers even pay for it.

 

[Psychresy]

Not sure where this 420/hr number comes from but it does not seem realistic with insurance unless you happen to have high paying insurance. you could probably get 420/hr with reasonable insurance doing 2 99214+90833 an hr, but you aren't going to be doing that. You are going to have to do 64 new evals (either 90792 or 99205) to fill 8 hours of 30 min q monthly follow up visits, more if you you're trying more (96 for 12 hours). New pt visits are going to pay in the range of $225-300 depending on the insurance and your area (possibly less). So you need to account for initial evals when calculating your gross hourly rate and you'll see it will be much less. If it were that straightforward, more people would accept insurance. This is not even accounting for no shows, non-payment, denials, pts not paying their copays or deductibles, disputes and chargebacks etc.

I guess I'm basing this off work I'm currently doing as a moonlighter. Based on my current billings, I am generating about 2 99214 + 90833. It appears in the area I will be practicing, 210 per encounter with those codes seems reasonable. I should probably temper than in that it seems something like 10-15% are 99213. Of course these aren't numbers right out of the gate. I should have mentioned I'm assuming after 6-12 month build up.

But no shows, non-payment shouldn't be an issue if you are running the card prior to the appointment and/or charging for no shows. This is what is happening at the current clinic and appears to be working fine. Regarding denials, I've got a biller who was recommended who has shown ability to collect at a rate of 96% - so I suppose that 4% non collection rate would also need to be accounted for. I think high 300s is probably a more accurate hourly number once the practice is full.

 

[Merovinge]

All of the true own occupation DI companies (there are only 5 right now) place a 24 month limit on psychiatric/SUD disability (one is 24 months per episode of illness, the rest are lifetime). you have to pay substantially more to get unlimited psychiatric disability included. I can also tell you on the forensic end you have to fight tooth and nail to get lifetime psychiatric disability covered so even if your policy covers it, you'll need to get a lawyer probably and have forensic evals etc. The companies will hire private investigators to follow you etc The good news is psychiatric disability doesn't include TBI or dementia, and you may also get covered for the functional somatic syndromes.

It is true that getting DI in residency (OR as a brand new attending) is usually discounted, not just accounting for age. So I would advise anyone who thinks they might want to do PP in the future to get disability insurance as a resident (or now if not a resident). It is one of the big 3 personal finance mistakes I made (the others were cashing out my retirement plan from residency and not setting up a Roth IRA and then waiting too long to set up backdoor Roth).

That's wild how much this has changed in the past 6 years since I went through the process. There were at least 2 companies of the big 5 offering unlimited psychiatric disability and my wife's policy is very close in price to another company that had the 24 month period.

I also personally compared my rates in fellowship vs as a first year attending and saw miniscule differences, I am not sure if this changed since that time. It always felt a bit propaganda-like to get people to pull the trigger quicker, although never a bad time to get DI as a physician.

And yes backdoor roth for every high income earner, every year, no exceptions. Pretty frustrated I didn't do this in residency/fellowship as well, it's such a good deal the government has looked into getting rid of it (if you need any more incentive to do it).

 

[dl2dp2]

Absolutely FIRE details and what is an absolute must read.

What is your sub speciality that you charge 2k for initials? Forensics I’m assuming?

Thank you.

2k initial is not rare now in GENERAL psychiatry. 5k is not unheard of, especially for child/forensic.

 

[splik]

What is your sub speciality that you charge 2k for initials? Forensics I’m assuming?

You can find the answer elsewhere in my posts. I do forensics as well but the above is for clinical work. For forensics my rate is varies depending on the type of case. For criminal cases, I charge less than my clinical rate, and for civil cases I charge more. When patients or their lawyers try to involve me in forensic issues, I try my best to stay out of it given the ethical issues, but if they insist then I charge more than double my clinical rate as a deterrent. It doesn't seem to be an effective deterrent so perhaps I could charge more for forensic work, not sure.

 

[Stagg737]

For forensics my rate is varies depending on the type of case. For criminal cases, I charge less than my clinical rate, and for civil cases I charge more.

This seems counter to what I would expect. Is this because in criminal cases you're being hired by the court system vs private lawyers in civil cases?

 

[splik]

This seems counter to what I would expect. Is this because in criminal cases you're being hired by the court system vs private lawyers in civil cases?

Think about it this way. Who makes more: public defenders or white show law firm associates?
The criminal justice system is woefully underfunded. For criminal cases I'm usually working for a defense attorney (you could also do court appointed cases but they pay like minimum wage round here lol) so there's not much money. For federal cases (I mainly do federal cases) each circuit sets a scale for expert pay which is lower than most people's fees. If it's an important case or a death penalty case you can ask for more and they can approve above the scale rates.

For civil cases, it depends, but if we're talking about malpractice and personal injury cases, there's often huge money at stake and so its seen as worth it and necessary to pay full fee for experts. For example one case did the defendant was Bank of America. They literally have bottomless pits of money and won't bat an eyelid at your billing. For criminal cases, it's a slog getting hours approved.

There's also a difference between working as a plaintiff expert and a defense expert. Plaintiff's attorneys are usually solo practitioners or small firms and work on contingency. They only win 20% of the time, and it's their own money they are spending so they are more careful (though they sometimes have the most terrible cases). If they have a very good case and a defendant with deep pockets, you're probably okay, but much higher chance of being screwed over. Defense firms are usually large, and if the client is some fortune 500 company (of course they may not be), the attorneys are already billing a ton of hours so your fees might be chump change in the grand scheme of things especially when your opinion or testimony can save them millions of dollars.

 

[romanticscience]

Even if your goal is providing TMS etc (which I'm exploring for the future)

What are your thoughts regarding adding the service to your practice? How would you justify the cost of the machine, necessary advertising, staff (TMS tech and admin for pre-auth/billing), extra space, etc.

Can a solo/micro-practice offer TMS? Or would this require evolving into a clinic first?

 

[WisNeuro]

This seems counter to what I would expect. Is this because in criminal cases you're being hired by the court system vs private lawyers in civil cases?

Both. I mostly do civil work, but in a recent federal criminal case, I was a defense expert hired by that law firm. My fees are the same for criminal and civil, no matter who is doing the hiring.

 

[yoloswagpoop42069]

2k initial is not rare now in GENERAL psychiatry. 5k is not unheard of, especially for child/forensic.

I understand there are those who charge pure 2k cash for an intial adult eval.

But I would say this is not common, even for CA. But as explained before, he does a lot of ancillary stuff I’ll read more on his prior posts.

I just can’t imagine too many straight forward MDD med management adult cases willing to shell out 2k cash for an intial eval, unless they are very rich and money is no issue for them.

I’ve looked at plenty of private practice websites and their rates, and depending on location average I have seen is from 300-600.

^ for general adults and not for forensics obviously.

I’ll do more reading of his post and prior posts, but please let’s not pretend 2k cash intial evals are common for fully booked PPs. Unless they do some “integrative” practice, concierge (which would be higher), or have in person clout that can for whatever reason command that price.

 

[allantois]

2k is what analysts around here charge for weekly sessions per month lol

 

[Atreides]

I have also had good success at getting insurance companies to reimburse my pts for my full cash amount (it's called a network gap exception or "non-participating provider" authorization).

Pretty sure we're in the same region. You may already know this but just fyi, the resident/fellows' health insurance at the big name private academic program in the region reimburses patients for 100% OON costs for outpatient psychiatry visits. There might be some amount they cap at but whatever it is, it's more than what my cash rate was ($500/hour). They also reimbursed 100% for psychological testing. Not sure how actively you're looking for patients but any trainee at that institution would be able to afford your rates most likely (since they'll get it reimbursed without an issue);

 

[yoloswagpoop42069]

2k is what analysts around here charge for weekly sessions per month lol

Bro that’s exactly my point. For true psychodynamic analysis they’ll pay.

It was on the discussion of general adult med management rates.

 

[romanticscience]

I understand there are those who charge pure 2k cash for an intial adult eval.

But I would say this is not common, even for CA. But as explained before, he does a lot of ancillary stuff I’ll read more on his prior posts.

I just can’t imagine too many straight forward MDD med management adult cases willing to shell out 2k cash for an intial eval, unless they are very rich and money is no issue for them.

I’ve looked at plenty of private practice websites and their rates, and depending on location average I have seen is from 300-600.

^ for general adults and not for forensics obviously.

I’ll do more reading of his post and prior posts, but please let’s not pretend 2k cash intial evals are common for fully booked PPs. Unless they do some “integrative” practice, concierge (which would be higher), or have in person clout that can for whatever reason command that price.

The charge, given how much time is spent on the evaluation, is not terribly high. If your evaluation is 4 hours, that's $500/hour.

This is not customary, though I've heard of it being done in clinical situations where you need a lot of testing and/or collateral (e.g., child or eating disorders). Also, these cases are stressful given the bio-psycho-social complexity. Splik can have them!

I do things the opposite way. I charge $300 for the initial consultation; however, that's for 45 minutes ($400/hour) and after the review of a new patient questionnaire. My intake system is based primarily on their completion of intake forms and is fit to the clinical demand. For some people, the "intake" is essentially 2-3 "sessions," and for others, it's the "first." I do this because I take insurance and keep my cash rates sort of close to network reimbursement. I also do a lot of therapy and my schedule allows the person to schedule "another consultation session" as early as the same week.

 

[PsyDr]

This seems counter to what I would expect. Is this because in criminal cases you're being hired by the court system vs private lawyers in civil cases?

If he's who I think he is, he's attempting to get into high profile criminal work.

 

[MD Financial Services Scott]

Disability insurance has had some changes recently. Apparently most places have stopped providing gender neutral rates which is a big hit for female physicians (and in psychiatry this is 1/2 or more of us). When my wife and I went shopping, her risk class was somehow identical to mine despite being a surgeon, so I am flying without insurance while she is heavily insured (there is 0% chance the actuarial data actually supports us having equal disability rates, I will never believe the market priced this right). For most doctors that are the primary income earners in their family, definitely get disability insurance (unless you are already independently wealthy). Make sure it's own occupation and does not have limits on mental/psychiatric disability (which are common these days), we all know how often psychiatric disorders can cause disability.

I have heard that getting DI in residency is some big boon compared to being a young attending but I don't believe that's the case. Just do it early in your career, sooner is probably better than later in almost every case but don't feel bad if you are a few years in, that's a completely fine time to get things.

Getting coverage as a resident/fellow or within 180 days of finishing typically allows for an extra 10% discount on the premium.

 

[MD Financial Services Scott]

How much is disability insurance per year as a resident versus now for you?

Most resident/fellowship plans cost about $20-$25 for males and $25-$30 for females per month per $1k of benefit for a level premium contracts.

 

[forchinet121]

Most resident/fellowship plans cost about $20-$25 for males and $25-$30 for females per month per $1k of benefit for a level premium contracts.

What does that mean I’m paying 25 per month?

 

[MD Financial Services Scott]

Reply

What does that mean I’m paying 25 per month?

That means if one is a resident (age 27-32 apx and male) then you can probably buy $5k per month at $100-$125 so about $20-$25 per month per $1,000 of benefit. If one only wants $1k of benefit, then the cost is usually about $20-$25 for that amount.