Salary structure question

[drusso]

---

Members don't see this ad.

Oh I forgot: Medicare has limited the number of "transforaminal" epidurals to 1 per level on average (not 2 on everyone or bilateral on everyone like the mills did in the past as well to keep revenue up). This is another 30% or so cut on average for reimbursement since 2021.

Let me go into the economics of HOPD employment vs "Private Practice" now from a salary perspective:

1) HOPD starts physician at 450-500K for first 2-3 years. Private Practice has "3 year partnership" starting the physician at 250-300K or so per year. (Gradient: 500k-275K *3= 675K). So you are essentially starting 700K in the red just signing with the private practice.

Good luck partnering in an increasingly costly "mill" practice that is losing docs considering your share of the overhead you need to "payback" is astronomical. Its even worse if the practice wants you to "indemnify" them for the money before partnership. Could take 4+ years to partner at lower salaries at that point or never partner. This is if the practice survives in the interim or isn't attempted to be sold to PE.

2) Depending on $/RVU structure and efficiency of HOPD vs Private Practice "ceiling" 3 years later is TRICKY. However, with the increases costs and declining reimbursements for PPs, its likely maximum for both is realistically at 800K to 900K. I think its a wash at best.

HOPD can realistically obtain 14k/RVU in an "efficient" practice pretty easily after a few years (depending on location, etc) and even at 62/RVU, its a little under 900K. You would need to work equally hard at a private practice to obtain those numbers in an inflationary environment with increasing costs and decreasing reimbursement. The risk difference is enormous.

3) How much is extra time worth that will be required from "partners" for administrative tasks?

4) Ancillaries of Private Practice: PT is not profitable anymore and can actually be costing the practice money in rent, UDS profit is marginal, etc. I dont really see much opportunity here anymore.

Im really not seeing the advantages of PP at this point if you properly vet a hospital based job or even private equity job. Dr Russo might have a better argument?

Also, remember, you can NEGOTIATE a better deal with a PE group if you join it as an outside physician rather then get taken over as a "non partner" in a private practice. Non partners are not going to do well in a PE deal and have worked for less for nothing.

Most PE deals target practices that are growing with a few "super partners" who get all the money.

Spot on! If I had it to do over again, I'd take my $750K HOPD gig and turn my brain off after 5 PM. Getting paid last and signing other people's paychecks is not all it is cracked up to be.

 

[Brown Striker]

Spot on! If I had it to do over again, I'd take my $750K HOPD gig and turn my brain off after 5 PM. Getting paid last and signing other people's paychecks is not all it is cracked up to be.

Remember, I never said anything about PP being always a "terrible bet".

I am arguing that you need to be VERY discerning and definitely not assume PP > Hospital Employment

 

[Pain Applicant1]

Some private practices have "locked in" long term leases that need to be covered in a "catchment" area. These leases are a poison pill since the previous older doctors often locked them into higher cost contracts that increase with inflation over 5+ year contracts. Also, closing these more expensive leases would be a loss of equipment etc.

Therefore, it becomes a higher cost of running the practice over a smaller number of doctors. Many of these practices are setup as expensive high volume "mills" that require higher reimbursement to manage the costs. With less doctors, the overhead per doctor is far higher.

When you add in large reimbursement cuts for practices that are dependent on higher volumes.

A) RF and MBBs: three levels to two levels. Was the practice dependent on doing mostly 3 level RF/Facets rather then 2? This is a 33% cut in reimbursement then.
B) Epidurals limited to 4 per year with yearly reevaluation by PCP who isnt at their primary practice. Many of their inherited patients are "legacy" patients who got a stead 6 epidurals per year to keep the reimbursement flowing in many regions (1/3 cut in number of epidurals per year minimum)
C) Cant charge for sedation that brought in former revenue
D) Cant do multiple procedures at a time anymore.
E) Increased burdensome PA
F) Modifier 25 is harder to get reimbursed.

This is without counting the 2023 reimbursement cuts on the horizon.

Any physician evaluating private practices that are "established" must look at:

1) Are there an overabundance of older doctors close to retirement age? Is the practice losing or gaining doctors over last few years? A new physician is often paid far lower for the first 3 years before "making partner" in the HOPES of making bank as a partner compared to hospital employment. This was true in the past but is far less likely now. If you walk into one of these practices, you will make less starting, take far longer to "partner" and have a far lower ceiling as a "partner" with far more business responsibility. They will use older salary figures to keep you enticed without mentioning the shifts over the last few years.

2) Cost structure of rentals/staff/supplies: What % of revenue is this? How is it increasing relative to revenue since COVID? High overhead cost practices with increasing costs of labor/supplies (>20% increase over last 2 years minimum) that were dependent on high reimbursement rates of the past that were run as "mills" will not be a good bet going forward.

3) Reimbursement: How dependent in the practice on higher collections/patient? How were margins affected by reimbursement cuts in 2021 (look at 2022 reimbursement figures compared to 2019).

If trending badly, even if its an "established" practice, there is no point in joining. Hospital based practices are far better at that point.

I see what you're saying. That would apply to a group private practice. I'm a solo practice so fewer docs out there work better for me.

 

[Pain Applicant1]

Oh I forgot: Medicare has limited the number of "transforaminal" epidurals to 1 per level on average (not 2 on everyone or bilateral on everyone like the mills did in the past as well to keep revenue up). This is another 30% or so cut on average for reimbursement since 2021.

Let me go into the economics of HOPD employment vs "Private Practice" now from a salary perspective:

1) HOPD starts physician at 450-500K for first 2-3 years. Private Practice has "3 year partnership" starting the physician at 250-300K or so per year. (Gradient: 500k-275K *3= 675K). So you are essentially starting 700K in the red just signing with the private practice.

Good luck partnering in an increasingly costly "mill" practice that is losing docs considering your share of the overhead you need to "payback" is astronomical. Its even worse if the practice wants you to "indemnify" them for the money before partnership. Could take 4+ years to partner at lower salaries at that point or never partner. This is if the practice survives in the interim or isn't attempted to be sold to PE.

2) Depending on $/RVU structure and efficiency of HOPD vs Private Practice "ceiling" 3 years later is TRICKY. However, with the increases costs and declining reimbursements for PPs, its likely maximum for both is realistically at 800K to 900K. I think its a wash at best.

HOPD can realistically obtain 14k/RVU in an "efficient" practice pretty easily after a few years (depending on location, etc) and even at 62/RVU, its a little under 900K. You would need to work equally hard at a private practice to obtain those numbers in an inflationary environment with increasing costs and decreasing reimbursement. The risk difference is enormous.

3) How much is extra time worth that will be required from "partners" for administrative tasks?

4) Ancillaries of Private Practice: PT is not profitable anymore and can actually be costing the practice money in rent, UDS profit is marginal, etc. I dont really see much opportunity here anymore.

Im really not seeing the advantages of PP at this point if you properly vet a hospital based job or even private equity job. Dr Russo might have a better argument?

Also, remember, you can NEGOTIATE a better deal with a PE group if you join it as an outside physician rather then get taken over as a "non partner" in a private practice. Non partners are not going to do well in a PE deal and have worked for less for nothing.

Most PE deals target practices that are growing with a few "super partners" who get all the money.

The advantage is autonomy. It's getting harder to be in PP but I still wouldn't trade what I have to work for the hospital. If I was starting over I'm not sure what I would do but for now, I do what I want when I want with no one telling me what to do. You can't really put a price on that.

UDS is still very profitable if you know how to do it.

When I started I convinced the local hospital to fund nearly everything (income guarantee with loan forgiveness) so I was in the black from day 1. and my practice was profitable despite their support after the 1st month. Not sure if these deals are still out there.

It's getting difficult but still viable I'm sure if someone has the heart for it.

 

[mid|ine]

UDS is still very profitable if you know how to do it.

We just had a local doc close up shop. Rumor is Medicare fraud, and likely related to UDSs

 

[Pain Applicant1]

We just had a local doc close up shop. Rumor is Medicare fraud, and likely related to UDSs

I don't doubt that but being done correctly is not the same as being done illegally. There's widespread fraud with every code and fraud doesn't discriminate on whether or not the CPT begins with a 2, 6, 8, 9, etc.

 

[mid|ine]

I don't doubt that but being done correctly is not the same as being done illegally. There's widespread fraud with every code and fraud doesn't discriminate on whether or not the CPT begins with a 2, 6, 8, 9, etc.

I know, just saying its on the radar. I think he did a UDS on every patient, every visit.

Do you have your own lab? How often are you doing UDSs on your patients? We do 1-2x per year, unless there is a reason to do otherwise. My partner has not wanted us to get into billing for them.

 

[Pain Applicant1]

I know, just saying its on the radar. I think he did a UDS on every patient, every visit.

Do you have your own lab? How often are you doing UDSs on your patients? We do 1-2x per year, unless there is a reason to do otherwise. My partner has not wanted us to get into billing for them.

Suboxone each month, others Q 6 to 12 months like you.

It's my own lab. Moderate complexity. 80307. Only my pts have labs run on my analyzer. I personally fulfill all 4 positions for CLIA from Lab director down. I took that 100% worthless required course but I was able to learn elsewhere. From my understanding of the law, stark, anti-kickback... should be 100% legit.

 

[nvrsumr]

Slick