Reasonable compensation for outpatient gig

[curiousmindset]

Hi all,

I have been seeing patients at an outpatient practice part time in addition to my main inpatient job.
I receive a 70/30 split on revenue generated (billing mostly 99214s+90833s for my established patients). I've had a consistently positive experience with the clinical support staff and enjoy working with the patients I am seeing. However, the 30% if a significant cut and my understanding is that private practice overhead would be around 15-20%.
I'm curious what people's thoughts are on the 70/30 split and thoughts on moving to independent practice instead.

Thanks!

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[Bartelby]

I think we would have to know more about the practice, and then it would come down to what you value. Things like:

-Are you getting a good stream of good patients (people who are motivated and who have good insurance that reimburses well)?
-Are the insurance reimbursement rates the practice has gotten good? How would it compare to your solo practice (if you would take insurance)?
-Are there cash-only patients, and how is the revenue for those patients?
-Is the practice handling your insurance billing, front desk staff needs, call or vacation coverage?
-Do the admin staff do helpful things like helping fill your open timeslots?
-Do you like the people you work with? Do you learn from them and enjoy work more because of them?

For sure you can run with less overhead in a solo PP. Doing so while taking a range of insurance policies would put a lot of load on you though. My overhead is around 15% in my part-time solo PP, but I do everything myself and do not accept any insurance. I handle the billing, scheduling, call coverage, making sure my policies are in-line with relevant requirements, maintaining liability and general insurance, promoting my practice (you have to find work yourself), renting my own space, deciding on the EMR, and finding my own peer supervision outside of the practice. I really like part-time PP, but if I did it full time I think it would be pretty lonely.

So in short, while a 70/30 split is a big cut it can actually be worth it if the practice brings enough value for you. If your end goal is mainly financial, though, there is more room for growth striking out on your own.

 

[TexasPhysician]

This is common. Overhead is at least 15%. If the practice owner doesn’t make something for the upkeep and added effort, there is no point in hiring someone. Think of it like this - your overhead for a thriving provate practice will hit 20%+. Is the 10% you lose worth no admin time, no payroll, call coverage for stress-free vacations, no legal meetings, etc.?

 

[TexasPhysician]

I think we would have to know more about the practice, and then it would come down to what you value. Things like:

-Are you getting a good stream of good patients (people who are motivated and who have good insurance that reimburses well)?
-Are the insurance reimbursement rates the practice has gotten good? How would it compare to your solo practice (if you would take insurance)?
-Are there cash-only patients, and how is the revenue for those patients?
-Is the practice handling your insurance billing, front desk staff needs, call or vacation coverage?
-Do the admin staff do helpful things like helping fill your open timeslots?
-Do you like the people you work with? Do you learn from them and enjoy work more because of them?

For sure you can run with less overhead in a solo PP. Doing so while taking a range of insurance policies would put a lot of load on you though. My overhead is around 15% in my part-time solo PP, but I do everything myself and do not accept any insurance. I handle the billing, scheduling, call coverage, making sure my policies are in-line with relevant requirements, maintaining liability and general insurance, promoting my practice (you have to find work yourself), renting my own space, deciding on the EMR, and finding my own peer supervision outside of the practice. I really like part-time PP, but if I did it full time I think it would be pretty lonely.

So in short, while a 70/30 split is a big cut it can actually be worth it if the practice brings enough value for you. If your end goal is mainly financial, though, there is more room for growth striking out on your own.

Something for the OP to keep in mind:

If you add up the time you spend on billing, scheduling, call, developing policies, legal meetings, marketing, rental contracts, EMR adjustments, business decisions, and everything else you, it becomes a fair amount of unpaid time.

Let’s assume you earn $250/hr seeing patients. It could be much more or less. For every 4 hours of uncompensated time, you actually have an extra $1,000 of added overhead (your time). That 15% is actually 20%+.

 

[Bartelby]

Something for the OP to keep in mind:

If you add up the time you spend on billing, scheduling, call, developing policies, legal meetings, marketing, rental contracts, EMR adjustments, business decisions, and everything else you, it becomes a fair amount of unpaid time.

Let’s assume you earn $250/hr seeing patients. It could be much more or less. For every 4 hours of uncompensated time, you actually have an extra $1,000 of added overhead (your time). That 15% is actually 20%+.

Very true. While my overhead is a bit under 15%, that is valuing my time at zero. If I were to do the math on any and all uncompensated time I'm not sure what the overhead number would be, but it would for sure go up.

 

[curiousmindset]

I think we would have to know more about the practice, and then it would come down to what you value. Things like:

-Are you getting a good stream of good patients (people who are motivated and who have good insurance that reimburses well)?
-Are the insurance reimbursement rates the practice has gotten good? How would it compare to your solo practice (if you would take insurance)?
-Are there cash-only patients, and how is the revenue for those patients?
-Is the practice handling your insurance billing, front desk staff needs, call or vacation coverage?
-Do the admin staff do helpful things like helping fill your open timeslots?
-Do you like the people you work with? Do you learn from them and enjoy work more because of them?

For sure you can run with less overhead in a solo PP. Doing so while taking a range of insurance policies would put a lot of load on you though. My overhead is around 15% in my part-time solo PP, but I do everything myself and do not accept any insurance. I handle the billing, scheduling, call coverage, making sure my policies are in-line with relevant requirements, maintaining liability and general insurance, promoting my practice (you have to find work yourself), renting my own space, deciding on the EMR, and finding my own peer supervision outside of the practice. I really like part-time PP, but if I did it full time I think it would be pretty lonely.

So in short, while a 70/30 split is a big cut it can actually be worth it if the practice brings enough value for you. If your end goal is mainly financial, though, there is more room for growth striking out on your own.

Very helpful questions to consider!

-I am getting a good stream of good patients (diverse spectrum of issues) and insurance reimburses for a 99214+90833 200-225 on average.
-If I went solo, I'd likely take cash only.
-About 5% of my patients are cash-only. The follow up rate is 260$.
-The practice handles insurance billing, front desk staff needs and vacation coverage (if needed, although I do most of this myself anyways)
-Admin staff fill my open timeslots in addition to multiple other things including helping with referrals, sending patients information letters/forms, etc.
-I enjoy the people I work with. I find them genuine and energized to help people. There are connections I have made with other psychiatrists through the practice who have helped with challenging cases and provided guidance/direction in learning more about interest areas.

Hearing what you've shared definitely puts things into helpful perspective.

 

[curiousmindset]

This is common. Overhead is at least 15%. If the practice owner doesn’t make something for the upkeep and added effort, there is no point in hiring someone. Think of it like this - your overhead for a thriving provate practice will hit 20%+. Is the 10% you lose worth no admin time, no payroll, call coverage for stress-free vacations, no legal meetings, etc.?

Great point! 10% part time would amount to somewhere in the realm of 15-20k per year (pre tax). Think that might not be worth it for me when putting it like that.

 

[curiousmindset]

Very true. While my overhead is a bit under 15%, that is valuing my time at zero. If I were to do the math on any and all uncompensated time I'm not sure what the overhead number would be, but it would for sure go up.

Curious what you would do in my shoes knowing what you know.
Also, how challenging was it to build a panel that you have now come to enjoy?

 

[Stagg737]

Very helpful questions to consider!

-I am getting a good stream of good patients (diverse spectrum of issues) and insurance reimburses for a 99214+90833 200-225 on average.
-If I went solo, I'd likely take cash only.
-About 5% of my patients are cash-only. The follow up rate is 260$.
-The practice handles insurance billing, front desk staff needs and vacation coverage (if needed, although I do most of this myself anyways)
-Admin staff fill my open timeslots in addition to multiple other things including helping with referrals, sending patients information letters/forms, etc.
-I enjoy the people I work with. I find them genuine and energized to help people. There are connections I have made with other psychiatrists through the practice who have helped with challenging cases and provided guidance/direction in learning more about interest areas.

Hearing what you've shared definitely puts things into helpful perspective.

I'm employed in academia, so take that for what it's worth. Clarification, you said that it's 70/30 based on "revenue generated", do you mean you're paid based on what's collected or what you bill? Given everything the practice seems to be providing along with a positive environment, steady patient stream, and solid mentors/colleagues this seems like a very fair arrangement if it's billed. If it's collected then I'd be a lot more weary, but would completely depend on the practice's collection rate.

 

[calvnandhobbs68]

Great point! 10% part time would amount to somewhere in the realm of 15-20k per year (pre tax). Think that might not be worth it for me when putting it like that.

So you’re only there part time? Bc 10% should be much more than 20K full time.

If you’re only there part time then it’s probably even less worth it to try to do your own thing because a lot of relative overhead cost goes down as a percentage of your collections the more you work. Unless your objective is eventually to build your own private practice and you just want to start out slow.

 

[Bartelby]

Curious what you would do in my shoes knowing what you know.
Also, how challenging was it to build a panel that you have now come to enjoy?

If you plan to do a part-time practice taking the same approach you are using in your current group practice setup, I would probably just stick with the group practice.

If there is a compelling reason to switch then it could be worth it. As an example, let's say you do lots of 30-minute 99214+90833 at your current practice and doing weekly therapy meetings would not be financially viable, but you want to change up your focus to mostly hour-long weekly therapy. In that case doing a cash only solo practice could make a lot of sense. A therapy-based practice has far fewer patients (less admin work needed), and you can set cash rates that make it financially viable to practice that way while still making at or above average income.

For me the practice was always part-time with very low pressure to add new work. I have built it up over years. I think if you want to fill up quickly, you would need to be pretty active about seeking out patients. I also focus more on psychotherapy and forensic work, and a more traditional 30-minute follow up clinic would be pretty different to fill and operate.

 

[Sushirolls]

Overhead is higher with less volume, less hours. The higher volume the higher hours, the lower this almost fixed cost stays.
I'm about 34% with only 8 clinical hours to give you an idea.
IF I were at 24 clinical hours, I might be able to get it down to 11% with my current projections.

 

[FlowRate]

99214+90833 200-225 on average

Would this be considered pretty good? In my area, Medicare pays $195. (Not sure how much more an insurance needs to pay than MC to be considered "good.")