May 28, 2019
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I am in need to work at a site for my provisional hours. A local counseling center takes people on but as “independent contractors” and requires a 70/30 fee split (30 to them). This is all fine until i realized there are social workers who get a lower client pay and hence pay less to the owner than i would. Im wondering if this is fair as technically we get use of the same office and equipment and business cards etc but they will
pay less per month. Also is the owner allowed to tell me what the charge?
 

WisNeuro

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It's jus the way these types of jobs work. The owner is allowed to tell you, but they do not have to, and likely will not.
 

PSYDR

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Heck, even MDs have trouble understanding percentages. One of the reasons I do not include percentiles in my reports anymore.
There’s that article entitled “perfidy of percentiles” by like rank or someone that shows we shouldn’t use percentiles.

I’m just weirded out that someone doesn’t understand a 70/30 split still means different amounts of money.
 
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WisNeuro

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There’s that article entitled “perfidy of percentiles” by like rank or someone that shows we shouldn’t use percentiles.

I’m just weirded out that someone doesn’t understand a 70/30 split still means different amounts of money.
Math and critical thought, concepts going by the wayside in this country
 
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PSYDR

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Math and critical thought, concepts going by the wayside in this country
Is it fair that I pay more in taxes than a post doc? I mean, we both use the roads about the same.
 

foreverbull

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I am in need to work at a site for my provisional hours. A local counseling center takes people on but as “independent contractors” and requires a 70/30 fee split (30 to them). This is all fine until i realized there are social workers who get a lower client pay and hence pay less to the owner than i would. Im wondering if this is fair as technically we get use of the same office and equipment and business cards etc but they will
pay less per month. Also is the owner allowed to tell me what the charge?
You may not have been in the job market long enough to know what’s typical, but A 70/30 split is a REALLY good deal for a postdoc/provisional position. I’ve seen licensed psychologists offered 60/40. When I was looking into postdoc positions, one private practice was offering a 50/50 split for a postdoc, so perhaps that gives you some perspective.

Are you saying you wish that people who make less money paid just as much in a flat fee to the owner and thus pay a higher percentage of their income to the owner than you do? That would be like everyone paying a flat fee for taxes, regardless of income, which places extreme financial burden on lower income folks who would pay a very high percentage of their income to taxes. It sounds very reasonable to pay the same percentage rather than flat fee specifically in a group practice.

Yes, the owner can tell you what to charge, depending on the contract. In a postdoc position I saw (same one that offered 50/50), the supervisor/owner set the postdoc’s fee at a certain rate and it was non-negotiable.
 
OP
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May 28, 2019
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You may not have been in the job market long enough to know what’s typical, but A 70/30 split is a REALLY good deal for a postdoc/provisional position. I’ve seen licensed psychologists offered 60/40. When I was looking into postdoc positions, one private practice was offering a 50/50 split for a postdoc, so perhaps that gives you some perspective.

Are you saying you wish that people who make less money paid just as much in a flat fee to the owner and thus pay a higher percentage of their income to the owner than you do? That would be like everyone paying a flat fee for taxes, regardless of income, which places extreme financial burden on lower income folks who would pay a very high percentage of their income to taxes. It sounds very reasonable to pay the same percentage rather than flat fee specifically in a group practice.

Yes, the owner can tell you what to charge, depending on the contract. In a postdoc position I saw (same one that offered 50/50), the supervisor/owner set the postdoc’s fee at a certain rate and it was non-negotiable.
yes i am very green to all
of this and never did a fee split situation before. The internet is an abundance of misinformation as well as contradictory information. I even read some sites that said it’s unethical to fee split. I guess my question goes back to if two people rent side by side offices and due to fee splitting I pay much more than the next person, but we get the same services from the company (yes i am aware i would make more per hour, but also would provide different services that they could not offer).

On another note, this was literally my first time
posting and how some people have responded to me
makes me not even want to post again. Why write rude comments when they aren’t needed? I had a legitimate question and was just looking for some advice. We all have to start somewhere.
 

foreverbull

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yes i am very green to all
of this and never did a fee split situation before. The internet is an abundance of misinformation as well as contradictory information. I even read some sites that said it’s unethical to fee split. I guess my question goes back to if two people rent side by side offices and due to fee splitting I pay much more than the next person, but we get the same services from the company (yes i am aware i would make more per hour, but also would provide different services that they could not offer).

On another note, this was literally my first time
posting and how some people have responded to me
makes me not even want to post again. Why write rude comments when they aren’t needed? I had a legitimate question and was just looking for some advice. We all have to start somewhere.
In group practices with different types of licenses/services, it can get tricky to figure out who pays what, but the percentage makes it more fair across the board if your non-doctoral-level colleague can’t charge the same rate you can. Fee splitting is an accepted part of group practice and is not unethical; it’s pretty standard for a group practice.

As far as the sarcasm and patronizing, feel free to listen to folks who don’t patronize you in here and ignore those who do (or call it out as you have here). Unfortunately it can be part of the culture in here sometimes, but not everyone does it and some of us call it out from time to time.
 

Doctor Eliza

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Just wanted to echo that 70-30 is a great split. I get 60-40 and I am licensed and have been with the practice 10 years. Also remember that you aren’t just paying for overhead. You are also likely getting referrals because you are associated with the practice.
 

Sanman

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As others have said, 70/30 is a good split.

As far as what is fair, welcome to business 101. What is in it for your employer to be more "fair"? Your future employer has established a practice (with all the details that entails), referral sources, and has a license that you that you need in order to gain your supervision (and ultimately a license). What are you bringing to the negotiation compared to other post-docs that makes the business owner want to take less money from you than others? Saying that it is not fair is a poor negotiating tactic. With a percentage split, the more you make, the more they make. This ensures they work towards your success because it makes them more money as well. If you offer to only pay a flat fee or reduce their percentage, why would they take an interest in you or ensure your success?

Can the owner tell you what to charge? Short answer, yes. It is their license and their practice. Longer answer: what are you concerned about? If you charge higher fees, you may make more. However, you may price yourself out of the market and be stuck accruing hours for years (I know people that did this at private practices). Charge too little and you will have lots of clients and get your license quickly, but little to no profit. Again, with your percentage split, your employer has incentive to find that balance for you to maximize their profit and get you licensed and making more money for them.
 

WisNeuro

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Fee splitting is not unethical, I think the websites you read may have been talking more about kickbacks, which is still technically fee splitting in a monetary sense, but with an entirely different motive.

As to the paying more of a split and providing higher reimbursed services, better get used to that. Imagine how specialist physicians feel in terms of how much they give to a hospital or other care systems compared to you. You can circumvent this by going PP, but then you are responsible for all of the overhead.
 

AcronymAllergy

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I appreciate folks returning to the topic at hand, and will just provide a reminder to please try and remain professional and helpful.

To the OP, as others have said, 70/30 is a good split, particularly for someone seeking provisional hours.

If you're offering services that are more highly reimbursed and/or you're seeing more clients in general, those are areas that can represent negotiating leverage. However, at the end of the day, your options (after negotiating) are to take what the employer is offering or look elsewhere.

Also, RE: paying more for the same services--if you're seeing more clients and/or billing at a higher rate, there's technically the chance that you're requiring more resources (e.g., scheduling, administrative, and billing support) than the person next door. If the business is also providing a referral stream, it may be more difficult for them to find folks who are able to pay your rates and participate in your services.
 
OP
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May 28, 2019
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Psychology Student
As others have said, 70/30 is a good split.

As far as what is fair, welcome to business 101. What is in it for your employer to be more "fair"? Your future employer has established a practice (with all the details that entails), referral sources, and has a license that you that you need in order to gain your supervision (and ultimately a license). What are you bringing to the negotiation compared to other post-docs that makes the business owner want to take less money from you than others? Saying that it is not fair is a poor negotiating tactic. With a percentage split, the more you make, the more they make. This ensures they work towards your success because it makes them more money as well. If you offer to only pay a flat fee or reduce their percentage, why would they take an interest in you or ensure your success?

Can the owner tell you what to charge? Short answer, yes. It is their license and their practice. Longer answer: what are you concerned about? If you charge higher fees, you may make more. However, you may price yourself out of the market and be stuck accruing hours for years (I know people that did this at private practices). Charge too little and you will have lots of clients and get your license quickly, but little to no profit. Again, with your percentage split, your employer has incentive to find that balance for you to maximize their profit and get you licensed and making more money for them.
Yes from what i can tell the clients go through them to get the 20+ counsellors referrals but many there also advertise themselves. The person who owns the business is a medical doctor so wont be involved in supervision as i have been told i can get an outside supervisor. The majority of the others there are social workers so i would be the only doctoral level practitioner there. This is why im hoping they let me charge a higher rate but I guess it’s up to them. (even though they say everyone is an independent contractor which seems to have its own issues as it is).
 
OP
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Just wanted to echo that 70-30 is a great split. I get 60-40 and I am licensed and have been with the practice 10 years. Also remember that you aren’t just paying for overhead. You are also likely getting referrals because you are associated with the practice.
it sounds like a person can make a ton of money just having others working at their office with those splits. The place im thinking of has 20+ counsellors.
 

Sanman

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Yes from what i can tell the clients go through them to get the 20+ counsellors referrals but many there also advertise themselves. The person who owns the business is a medical doctor so wont be involved in supervision as i have been told i can get an outside supervisor. The majority of the others there are social workers so i would be the only doctoral level practitioner there. This is why im hoping they let me charge a higher rate but I guess it’s up to them. (even though they say everyone is an independent contractor which seems to have its own issues as it is).

Whoa, hold up. Redflag there. Now the percentage split is starting to make more sense. Have you checked with the board to ensure that off-site supervision is acceptable to get your provisional hours? Do you have this already arranged? As a post-doc, you usually will not be able to bill insurance. Can this practice bring in enough cash business to keep you busy and has the owner ever done this before or only hired licensed practitioners?
 
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foreverbull

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it sounds like a person can make a ton of money just having others working at their office with those splits. The place im thinking of has 20+ counsellors.
If the group business owner pays for the office building, electricity, internet, AC/heat, water, phone lines, and has a business license and hires billing people, and buys general liability insurance, the expenses can quickly add up. Same with private practice—expenses and overhead are much higher than many people realize.
 

psych.meout

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Yes from what i can tell the clients go through them to get the 20+ counsellors referrals but many there also advertise themselves. The person who owns the business is a medical doctor so wont be involved in supervision as i have been told i can get an outside supervisor. The majority of the others there are social workers so i would be the only doctoral level practitioner there. This is why im hoping they let me charge a higher rate but I guess it’s up to them. (even though they say everyone is an independent contractor which seems to have its own issues as it is).
What? You don't have a supervisor lined up and you won't have one on-site?

As Sanman noted, you should focus more on the supervision and if the arrangement you are talking about is permissible to get your hours. The acceptability of the fee split should come way after that.
 
OP
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Whoa, hold up. Redflag there. Now the percentage split is starting to make more sense. Have you checked with the board to ensure that off-site supervision is acceptable to get your provisional hours? Do you have this already arranged? As a post-doc, you usually will not be able to bill insurance. Can this practice bring in enough cash business to keep you busy and has the owner ever done this before or only hired licensed practitioners?
yes the board newly approved off site in private practice as they found out people were doing off site in rural areas anyway (which they seemed to have not known about). The cost per hour for supervision is $150-180 an hour where i live, on top of the split. A friend of mine is in a 50-50 split and has to pay $160 an hour plus 5% of her pay goes to her supervisor. The owner has 3 other provisional psychologists there now.
 
OP
H
May 28, 2019
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Psychology Student
What? You don't have a supervisor lined up and you won't have one on-site?

As Sanman noted, you should focus more on the supervision and if the arrangement you are talking about is permissible to get your hours. The acceptability of the fee split should come way after that.
i have someone who agreed to supervise me. They work at a local hospital and apparently this is now ok, which before the supervisor had to be onsite. So essentially i need to find a site before i can get my supervision plan started.
 

foreverbull

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Still sounds like a decent deal for the 70/30 plus pay your supervisor pay if you have enough clients. Having to pay for supervision out of pocket, you might want to limit the number of hours per week for supervision since that’s a big fee because you realistically can’t see 40 clients/week anyway (20-25 at most is the sweet spot usually for individual therapy) so if you plan to count 20 hours/week for licensure, 2 supervision hours would suffice (should be 10% of total postdoc time including direct & indirect hours). If you want to be licensed faster, you’ll have to pay for 3-4 hours/week which will get pricey.

Hopefully you’ll be getting referrals right away if you have to pay for supervision out-of-pocket from the start.
 

Sanman

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Still sounds like a decent deal for the 70/30 plus pay your supervisor pay if you have enough clients. Having to pay for supervision out of pocket, you might want to limit the number of hours per week for supervision since that’s a big fee because you realistically can’t see 40 clients/week anyway (20-25 at most is the sweet spot usually for individual therapy) so if you plan to count 20 hours/week for licensure, 2 supervision hours would suffice (should be 10% of total postdoc time including direct & indirect hours). If you want to be licensed faster, you’ll have to pay for 3-4 hours/week which will get pricey.

Hopefully you’ll be getting referrals right away if you have to pay for supervision out-of-pocket from the start.
I have always seen more than that. I think the real question is how consistently can the OP get at least 20-25 clients per week at this clinic.
 

PSYDR

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@hera kitty I come down hard on things that have the potential to be negative for the field or the person. It's much better for you to think of me as a jerk, than for you to get fired from your job. It's also much better for everyone, if the field shows they understand basic business stuff.

1) The term "fee splitting", in general, has a very specific legal meaning which refers to payments made to a referral sources from monies earned from those referrals. It's usually a federal crime. For example, if I owned a law firm, and sent all of my car wreck cases to you, but required you to send me 10% of the insurance collections for those patients care; that would be fee splitting. Owning a practice, hiring contractors to see patients, and paying them a percent of what they collect is completely legal, and is not fee splitting. Now imagine you're a business owner, and an new employee immediately accuses you of a federal crime. Wouldn't you think that the easiest way to fix that is to terminate their contract? I would.

2) Fairness matters little in business. You are free to enter into almost any contract you want.

3) You are being paid 70% because that is what the practice owner thinks is manageable. That 30% may cover overhead, but it also cover his/her profit margins. As an employer, he/she is entitled to earn profits. Because you are an employee, and not a partner, you are not in a position to question the owner's moves, and it would likley be a bad idea to do so.
 
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psych.meout

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@hera kitty I come down hard on things that have the potential to be negative for the field or the person. It's much better for you to think of me as a jerk, than for you to get fired from your job. It's also much better for everyone, if the field shows they understand basic business stuff.

1) The term "fee splitting", in general, has a very specific legal meaning which refers to payments made to a referral sources from monies earned from those referrals. It's usually a federal crime. For example, if I owned a law firm, and sent all of my car wreck cases to you, but required you to send me 10% of the insurance collections for those patients care; that would be fee splitting. Owning a practice, hiring contractors to see patients, and paying them a percent of what they collect is completely legal, and is not fee splitting. Now imagine you're a business owner, and an new employee immediately accuses you of a federal crime. Wouldn't you think that the easiest way to fix that is to terminate their contract? I would.

2) Fairness matters little in business. You are free to enter into almost any contract you want.

3) You are being paid 70% because that is what the practice owner thinks is manageable. That 30% may cover overhead, but it also cover his/her profit margins. As an employer, he/she is entitled to earn profits. Because you are an employee, and not a partner, you are not in a position to question the owner's moves, and it would likley be a bad idea to do so.
I feel like the larger issue is not the use of the term "fee splitting (about which OP just seems honestly mistaken)," but more about the other aspects of the arrangement, particularly supervision. What would this supervisor actually be doing? They aren't there to directly observe any patient interactions and likely don't have any access to patient records, so is this supervision basically OP bringing up any concerns they may have from the counseling center in the one or two hours they meet per week? That still leaves open any issues where OP doesn't know that they need assistance or could be doing things better. You don't know what you don't know. We all have blind spots, so it doesn't really make sense to have supervision be so detached from the actual context where patient care is occurring.

Maybe I'm just completely mistaken due to being earlier in training than this, but it's definitely outside of what I'd be comfortable doing.
 

PSYDR

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@psych.meout I've never heard of off site supervision. Or a state that allows that. But I don’t know every states laws.
 

foreverbull

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@psych.meout I've never heard of off site supervision. Or a state that allows that. But I don’t know every states laws.
I worked at a postdoc site in which my supervisor was “employed” by the agency, but only for supervision purposes for one day per week. This was allowed by the state board. Some states differ in their requirements for how much time onsite (percentage-wise) you have to spend, and it sounds like some states allow offsite supervision as well.

@psych.meout
What is it actually called when owners of a group practice take a percentage for overhead if not “fee splitting?” I am new to this terminology and didn’t realize it was incorrectly used on this thread.
 

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30% is standard overhead costs for private practice, especially if they bill insurance. Provisional license doesn't mean anything because someone still has to sign off on your work. Until you can practice independently, there is no reason you should make any more. In fact, I would argue an independently licensed master's level clinician should make more, especially if they can supervise.

Its a tough reality, trust me. I'm right there with you. But it is what it is and when you look at other health care professions, psychologista are actually in a pretty good position because we have options. We are not one trick ponies, and there is money to be made if you are smart. If you want to feel depressed, just check out the pharmacy forum.
 
OP
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May 28, 2019
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Psychology Student
@hera kitty I come down hard on things that have the potential to be negative for the field or the person. It's much better for you to think of me as a jerk, than for you to get fired from your job. It's also much better for everyone, if the field shows they understand basic business stuff.

1) The term "fee splitting", in general, has a very specific legal meaning which refers to payments made to a referral sources from monies earned from those referrals. It's usually a federal crime. For example, if I owned a law firm, and sent all of my car wreck cases to you, but required you to send me 10% of the insurance collections for those patients care; that would be fee splitting. Owning a practice, hiring contractors to see patients, and paying them a percent of what they collect is completely legal, and is not fee splitting. Now imagine you're a business owner, and an new employee immediately accuses you of a federal crime. Wouldn't you think that the easiest way to fix that is to terminate their contract? I would.

2) Fairness matters little in business. You are free to enter into almost any contract you want.

3) You are being paid 70% because that is what the practice owner thinks is manageable. That 30% may cover overhead, but it also cover his/her profit margins. As an employer, he/she is entitled to earn profits. Because you are an employee, and not a partner, you are not in a position to question the owner's moves, and it would likley be a bad idea to do so.
dont think of you as a jerk whatsoever
i only use the term fee splitting as that is what it is so often referred to online as. I prefer percentage pay, or really what it is typically is just an hourly wage that’s decided based on that formula. Jobs are hard to come by where i live so it likely means entering into a contract that isnt ideal.