SDG Groups

[scummie]

So seeing the news about Envision makes me think there’s a potential opportunity here. We need to organize ourselves to take back EM, form democratic groups again, and swoop in when the big groups fall. We need to have something readily packaged.

I’m in a place in Texas where there’s only APP or Envision and would love the opportunity to make practicing medicine better for my fellow EM docs.

So how do I form a group? Reach out to the docs at my current shop? Local medical society? Get into hospital admin? Make a hashtag? Facebook? Who else is interested?

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[NicksMD]

AAEM is a great place to start, they have a group dedicated to helping EM docs form their own group.

 

[scummie]

Will do, thanks.

 

[Sushirolls]

1) There will need to be corporate structure of some type. LLC or PLLC filed with the state
2) need a tax ID number for this corp
3) need actual articles of formation and governance structure... the real meat
4) need a bank account for deposits to be dumped into
5) need an accountant to do payroll when time
6) need an office manager to run things, or pay a doc to do all that kind of stuff half time?
7) office manager or lead doc needs to get paneled the PLLC and tax ID AND NPI-II with every insurance company...
8) keep CME and license and vacine records of each doc...
9) the list goes on and on.

a worthy task. But a painful one.

Oh, and billing. Farm it out to 3rd party biller, or hire your own people to do your own billing.

Would be great if an ED doc and group, posted up their template/structure on here in a thread. Play by play. Could really help the rest of y'all, too.

I made a thread for Psych folks here:

Private Practice in Progress

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

forums.studentdoctor.net

 

[scummie]

Texas requires a PLLC. I know some docs that are 1099 that did this online. Also got a quote from a lawyer awhile back that would do the articles of formation and governance for $1500. Bank account takes less than an hour to open up. Some of these tasks aren’t that hard to do. Quick Books can do your payroll and file withholding. And we all probably know at least one super organized person who would be good with the office stuff. Like none of these things are insurmountable…except for the whole finding other doctors who are willing to come on board and getting a contract details…you don’t know what you don’t know unfortunately.

 

[Brigade4Radiant]

You also need a pool of money since insurance doesn’t pay for around 6-8 months

 

[Sushirolls]

You also need a pool of money since insurance doesn’t pay for around 6-8 months

Or if blood is in the water, start the paperwork now.
Get contracts going now with insurance companies.
Will have minimal outgoing expenses while setting up infrastructure.
Have contracts on stand by, ready to go for all the interested parties. And whence things implode, slap that trump card on the table and take the chips. Then there isn't a 6 month billing gap.

Many of the insurance companies can onboard a new doc / type I NPI, in several days by logging into their sites to "add a doc" to the NPI II. Some, do require each doc to get paneled separately and that will take 2-4 months to complete that whole process. No getting around that for a few of them.

 

[scummie]

Well shucks. Don’t have wads of cash lying around.

I know why I want to be part of a SDG. How do I get a CEO to listen and take a chance on an unknown group?

 

[scummie]

What about getting a small business loan? Like how much capital are we talking?

 

[bravotwozero]

What about getting a small business loan? Like how much capital are we talking?

That’s doable. Although I’d expect interest rates to the moon right now

Another way would be to get you and potential partners to pony up cash and start from there, which could be declared as shares or seed money….

As for the amount, it should be enough to cover payroll for 6 months I think.

 

[EctopicFetus]

What about getting a small business loan? Like how much capital are we talking?

I would start with finding a group of docs who you can trust and will work hard. Get a small core (no more than 4). Come up with a business plan, you need one person who has some skill in admin speak, perhaps a prior medical director.

I would then reach out to a billing company and have a discussion. as someone mentioned AAEM Physician group who can walk you thru this process from soup to nuts.

Most of the bigger billing companies, Brault, Logix, Change Healthcare, Zotec Dawo Suko (or whatever their new weird name is) will all front a decent bit of money for you. Expect to earn like 100-150/hr for 3-6 months. The issue which someone mentioned above is it takes a while to collect. Medicaid is usually quick but this is state dependent. Medicare isnt terribly slow either. In my state BCBS takes forever to "credential docs".

Once you have some structure in place I would reach out to local ceos and ask when their contract will be up for renewal. Tell them what you have to offer. Have a business pitch. Note taht in many places the CNO or COO or CMO will be the person who is ultimately responsible for the decision on who staffs the ED and not the CEO.

Be prepared for stuff in the CMG contracts to make it painful to retain the current staff so prepare to have a plan as to what those docs could do do to stay with you. the cost is often 50-100k and these details are in the agremeent between the hospital and the CMG so most docs wont know about it.

Then get the payer mix, volume and current staffing of MLPs, docs etc. Figure out if they are paying a subsidy. I know for a fact in houston many of those sites are still paying stipends.

I would find the richest contracts. you dont need to start at a hospital with a bad payer mix. Generally avoid large hospital systems like HCA (which i know is in houston). The decision making there will be more complicated and painful. Find a small=ish hospital system if one exists in houston and make your inroads there.

Hope this helps show a basic initial roadmap.

 

[emergentmd]

The hardest part is you need to get money ready without a contract. You need partners who are willing b/c most will not be willing to join your journey. Most of your current partners will just want to be 1099 and want the same current contract if not better. There is alot of headache ahead and hope you are ready for it. Docs are not easy to work with. CEOs are not easy. Billing will be your biggest HA. A hospital of 10 full time docs, you will need 3M minimum to pay 6 months of Salary. If income does not amount to much by month 6, you are looking at getting another loan. In the current market, you will be lucky to even get one at a reasonable rate. You need a business plan to show.

Not to scare you but this is reality. If you can get a 10 doc contract, you need 3M startup money. If you are fortunate enough to get a 10 yr loan at 8%, you are paying 35K/mo in payments. You will need to put your house/IRA/bank accounts as collateral.

Trust no one. If you can make this happen, likely you will have a small amount of partners who owns the group. Alot of money can be had if there are only a few partners. The risks are great, the rewards are great. Good luck.

If you are fortunate to get the contract and make money, you will need to get more contracts otherwise you will be looking over your shoulder b/c other CMGs will be coming. Hospital systems do not want to deal with a bunch of SDGs running their system, they want one. You will be saddled with alot of debt as you take over more sites. You need the stomach of the entrepreneur.

I have a high risk mentality, but this is not a path I would want to take. Good luck, I am rooting for you.

You could also find a podunk ER but there is not much meet on the bones unless you get some stipend.

 

[TooMuchResearch]

That’s doable. Although I’d expect interest rates to the moon right now

Another way would be to get you and potential partners to pony up cash and start from there, which could be declared as shares or seed money….

As for the amount, it should be enough to cover payroll for 6 months I think.

Reach out to Panacea physician loans.

 

[cyanide12345678]

Reading this thread gives me palpitations about how difficult this task actually is. Good luck to anyone who goes through with this process.

 

[EctopicFetus]

As I said your
Billing company will loan you money. Especially the bigger private ones. Logix brault etc. Zotec I’m sure as well.

If you think this will be easy then don’t start. Is it worth it. I think so.

Em
Pay is gonna go down with the glut of doctors and noctors forthcoming. With this you protect your future earnings.

You can make it a $$ winner for yourselves. Charge 25% of new hire collections as their path to partnership.

If you have a decent payer mix and volume $400/hr isn’t insane. $300/hr is a floor for perpetuity.

Get help from Aaem. Reach out to anyone you know that runs a group. Most people will happily help you. Avoid Acep. They are a trash organization with some decent people but many of them have slurped the kool aid and are fighting for the organization ahd not docs.

Embc is out there but that’s more about doing things once the system is up and running.

Afaik Aaem is the only org that has a setup to hold your hand to help you pick up a contract.

Again screw Acep.

 

[Sushirolls]

This $3 Million dollar talk is non sense.
Look around in this forum.
All y'all EM peeps are crispy burned and ready to quit.
You don't need to pay people for those start up months.
I and many other specialties who venture into private practice don't pay our selves for months, until the practice becomes solvent. It is no different.
But hope is what you are selling. Honesty. Professionalism, unity, and essentially a reset.
Not every doc is going to be willing to take such a plunge, but if you put your feelers out in your general area, and even put some feelers out here on SDN, you'll get X amount of docs you need.
Every one from the start is a partner.
All these details are written up in the PLLC for how the company is run, and also in the employment contract, too.

If you know your location is going to tank, go talk to the CMO/CEO etc of your hospital and let them know uncertainty is on the horizon but you are going to set up a PLLC structure now and start getting insurance contracts lined up now. This is something a single person can do in their off time. Ask the the CEO to connect you to the hospital billing dept to share what all the companies are they are in network with. You want to mirror that. So a patient doesn't get one OON bill from you and IN for their urgent surgery with the hospital...

The timing is ripe for such a switch to take place with EM being so disillusioned by these corporate groups.

Having all the contracts established with UHC, Aetna, Blue cross, etc in advance, means you won't have 6 months income gap. You will have the normal revenue cycle of 2-8 weeks for insurance claims and then the usual days to never for out of pocket costs.

I see the hope and viability in this plan. But it will be easier if you have some one who has already had a private practice in some fashion, to be the one to nudge things along.

 

[Dr Mantis Toboggan]

This $3 Million dollar talk is non sense.
Look around in this forum.
All y'all EM peeps are crispy burned and ready to quit.
You don't need to pay people for those start up months.
I and many other specialties who venture into private practice don't pay our selves for months, until the practice becomes solvent. It is no different.
But hope is what you are selling. Honesty. Professionalism, unity, and essentially a reset.
Not every doc is going to be willing to take such a plunge, but if you put your feelers out in your general area, and even put some feelers out here on SDN, you'll get X amount of docs you need.
Every one from the start is a partner.
All these details are written up in the PLLC for how the company is run, and also in the employment contract, too.

If you know your location is going to tank, go talk to the CMO/CEO etc of your hospital and let them know uncertainty is on the horizon but you are going to set up a PLLC structure now and start getting insurance contracts lined up now. This is something a single person can do in their off time. Ask the the CEO to connect you to the hospital billing dept to share what all the companies are they are in network with. You want to mirror that. So a patient doesn't get one OON bill from you and IN for their urgent surgery with the hospital...

The timing is ripe for such a switch to take place with EM being so disillusioned by these corporate groups.

Having all the contracts established with UHC, Aetna, Blue cross, etc in advance, means you won't have 6 months income gap. You will have the normal revenue cycle of 2-8 weeks for insurance claims and then the usual days to never for out of pocket costs.

I see the hope and viability in this plan. But it will be easier if you have some one who has already had a private practice in some fashion, to be the one to nudge things along.

Has anyone tried to get in network with the major payers from the ground up? I’ve heard they won’t even take calls from docs, let alone credential new ventures etc.

 

[Mount Asclepius]

Medium sized hospitals are willing to contract with private groups providing a stipend (depending upon payer mix) and reimbursing based upon a percent of billing instead of a group receiving revenue based upon collections. Hospitals already have the billing infrastructure in place. Take care of the E/M coding and they’ll cover the billing. Just takes negotiating chops and building relationships with hospital administration.

You don’t need to have 3-6 months income i.e. $3M at the start. You also don’t need to take out a loan. It does take a little know how and grunt work. The path will be a little smoother if you have someone involved who was formerly in leadership with a SDG.

Also you don’t need to continually overtake new contracts with different hospitals becoming the despised CMG you tried to replace in order to be a small successful SDG. That advice above in regards to that idea is absolute garbage. People in the FSED world for the past decade are ill informed regarding currently running a SDG in a hospital environment.

 

[JacobMcCandles]

Has anyone tried to get in network with the major payers from the ground up? I’ve heard they won’t even take calls from docs, let alone credential new ventures etc.

There are a few insurance companies who won’t talk to anyone since the NSA. Get a contact for each company from the hospital. Hospitals will have more pull than most physician groups.

Have the hospital pay you X% of your billing for the first 3-6 months. This isn’t unusual. This doesn’t mean you have to pay yourselves this money but it’ll allow you to build a cash cushion.

Have each partner expect to go 6 months without an income. Partners that can and are willing to do this will be necessary for long-term viability anyway.

 

[emergentmd]

Those on here who says that you don't need to have start up $$$, will find docs to work for free til collections come, hospitals willing to help you build collections/start your own ER SDG are painting a rainbow picture. None of them can be trusted and have not gone through the pains of starting a company. You need $$$ to hire support staff/CPA, etc. Its not like you open an LLC, get someone to bill for you then lets go. If it was this easy, you would have SDGs popping up all over the place, which is the exact opposite.

The difference between starting a SDG where you have zero assets/patients is at the end of the day, you have nothing of worth. You are asking docs to not take pay in hopes of owning something without any tangible assets. The big difference with opening an office practice/FSER is docs are willing to forgo pay b/c they are owning a practice with tangible value and patient panel. A hospital SDG has neither of these two that makes them valuable.

 

[Mount Asclepius]

Yes, there are expenses. They are manageable. The value is making great money and still practicing Emergency Medicine, not running a glorified urgent care pretending it’s EM (acknowledging EM is acute care medicine not CC). FSEDs though are not EM.

 

[JacobMcCandles]

Those on here who says that you don't need to have start up $$$, will find docs to work for free til collections come, hospitals willing to help you build collections/start your own ER SDG are painting a rainbow picture. None of them can be trusted and have not gone through the pains of starting a company. You need $$$ to hire support staff/CPA, etc. Its not like you open an LLC, get someone to bill for you then lets go. If it was this easy, you would have SDGs popping up all over the place, which is the exact opposite.

The difference between starting a SDG where you have zero assets/patients is at the end of the day, you have nothing of worth. You are asking docs to not take pay in hopes of owning something without any tangible assets. The big difference with opening an office practice/FSER is docs are willing to forgo pay b/c they are owning a practice with tangible value and patient panel. A hospital SDG has neither of these two that makes them valuable.

I’ll disagree with some of this. Hospitals will definitely negotiate with you on a stipend (and up front money) with a new contract or opening a new facility.

The asset is the contract and owning your own job as much as you can in emergency medicine.

 

[Janders]

Plus there is a significant middle ground here of having a small amount of seed capital and paying new partners a minimal “living wage” of $50/hr or something for the first 90d until collections start to roll.

As well, if you promise the tail money that comes in after the doc quits, you might have more docs interested in taking minimal income for 60-90days when they know they will get 90-120 days of paychecks on the back end.

If I was in CMG land currently, I would absolutely be interested in forming a new SDG with, say, 6-10 docs I know that are solid and stellar. I’d 100% take a couple month pay risk to do it.

 

[TysonCook]

If I was in CMG land currently, I would absolutely be interested in forming a new SDG with, say, 6-10 docs I know that are solid and stellar. I’d 100% take a couple month pay risk to do it.

...this.
Go to AAEM, they can help incredibly.

AR (accounts receivable) is just a product of what your revenue has been x 3-6 months. There are several ways to skin this cat (ask for hospital to cover it, get a small business loan, take a pay cut, or any iteration of that)... and 3-6 months after you stop working AR outlay will be paid back to you, so it's not a hit (unless you fail).

Insurance claims are mostly digital. Once you are set up AR and operations, payment occurs pretty quick (depending on your RCM group), but you are not going to go 6+ months waiting. More like 50% billed out will be paid in ~7days, then then rest in stepwise fashion.

RCM - there are plenty of groups

I think the biggest buy-in needs to be from a group of core docs that want to get it off the ground and running. Look at your current staffing model and decide "can I do this with X number of docs, that are willing to take X% paycut for 3-6 months with extra hours put in on the side for mgt".

Embrace the suck for 3-9 months and it's totally doable.

Lastly, you are not the first nor the last to do this. This path has been taken by many. Reach out to SDG's that you know, set up a meeting, etc.... Who's to say they wouldn't want to help you/combine forces.

 

[Birdstrike]

@scummie If you start an EM SDG, make sure you start an outpatient arm, as soon as possible. In my SDG, we started with multiple EM contracts, added outpatient contracts and grew quite big. CMGs started displacing our EM contracts and we were left with none. But the company lives on and has grown as big as ever, with no EM contracts, but numerous outpatient offices, most of which we own and multiple specialties. Once you have the infrastructure to run the EM side, adding an outpatient division won't be hard.

If you keep your EM contracts, that's all the better. If you lose one or all, outpatient protects you. It's also an asset hospitals or private equity might consider buying for multiples of your share value.

We have 150 employees, 40 providers and I own 5% of the company, which isn't enough to retire on by itself, but it's a substantial and growing amount of money. I'm on the Board of Directors, with a growing stake, every year.

 

[TooMuchResearch]

@scummie If you start an EM SDG, make sure you start an outpatient arm, as soon as possible. In my SDG, we started with multiple EM contracts, added outpatient contracts and grew quite big. CMGs started displacing our EM contracts and we were left with none. But the company lives on and has grown as big as ever, with no EM contracts, but numerous outpatient offices, most of which we own and multiple specialties. Once you have the infrastructure to run the EM side, adding an outpatient division won't be hard.

If you keep your EM contracts, that's all the better. If you lose one or all, outpatient protects you. It's also an asset hospitals or private equity might consider buying for multiples of your share value.

We have 150 employees, 40 providers and I own 5% of the company, which isn't enough to retire on by itself, but it's a substantial and growing amount of money. I'm on the Board of Directors, with a growing stake, every year.

What type of outpatient arm? I.e. what specialties do you house? Most of our local specialists are system employed or are from large specialty groups.

 

[Birdstrike]

What type of outpatient arm? I.e. what specialties do you house? Most of our local specialists are system employed or are from large specialty groups.

Family Medicine, Internal Medicine, Rheumatology, Pulmonary/Critical Care, Cardiology, Nephrology, Interventional Pain, ENT (allergy), and Endocrinology. Have in house lab, bone density, ultrasound, stress testing and clinical trials. Adding a CT scanner and possibly mammo. 100% physician ownership of the practice and real estate. 0% ownership by mid-levels and non-medical personal. Even the CFO and COO (who do have seats on the Board of Directors) have no ownership stake and can be fired by a vote of the Board of Directors (7 of 9 of which are doctors).

 

[TooMuchResearch]

Family Medicine, Internal Medicine, Rheumatology, Pulmonary/Critical Care, Cardiology, Nephrology, Interventional Pain, ENT (allergy), and Endocrinology. Have in house lab, bone density, ultrasound, stress testing and clinical trials. Adding a CT scanner and possibly mammo. 100% physician ownership of the practice and real estate. 0% ownership by mid-levels and non-medical personal. Even the CFO and COO (who do have seats on the Board of Directors) have no ownership stake and can be fired by a vote of the Board of Directors (7 of 9 of which are doctors).

Interesting. I guess I'm not sure why any other specialties would want to work under our group umbrella of emergency physicians.

 

[Birdstrike]

Interesting. I guess I'm not sure why any other specialties would want to work under our group umbrella of emergency physicians.

So they can work for themselves instead of a non-physician CEO. If you allowed shared ownership, that is. If you didn't then you'd offer no more autonomy than working for a CMG or non-physician CEO.

 

[TooMuchResearch]

So they can work for themselves instead of a non-physician CEO. If you allowed shared ownership, that is. If you didn't then you'd offer no more autonomy than working for a CMG or non-physician CEO.

Was your local market fragmented enough that independent physicians or small groups wanted to do this? All the specialty groups and even primary care that I interact with are either hospital or health system employed, already part of a large specialty group, or have already formed a merged specialty group, or practice on the outskirts of these options because they're not exactly the best in the business.

 

[justin8818]

This is totally doable. As far as financing goes we (about 12 docs) hired a billing company and personally signed for a line of credit at a local bank. We're almost three years into it and rolling along pretty good. Having buy in from your hopsitals and admin is huge.

 

[Birdstrike]

Was your local market fragmented enough that independent physicians or small groups wanted to do this? All the specialty groups and even primary care that I interact with are either hospital or health system employed, already part of a large specialty group, or have already formed a merged specialty group, or practice on the outskirts of these options because they're not exactly the best in the business.

It's something that developed over time, starting about 30 years ago. It started with a handfuls of ER docs at a then-small ED, which as the EDs and area grew, so did the amount of doctors. They expanded to other EDs, added hospitalists at those places where they had ED contracts. Then they hired a few PCPs and rented an office for them. Over the years, we've added doctors, specialties and ancillaries. Along the way, hospitals started getting aggressive with undercutting ED and hospitalist contracts and we lost them all one by one, which was a near-death blow to the group initially. But the outpatient docs remained and we've grown that further, and chose not to get back into ED contracts, specifically because they're too fragile with hospitals willing to exercise their out clause on a whim. We're not big enough to lose or gain ED contracts without it being a cataclysmic shift in our operations. Managing outpatient physicians is much more stable, because the docs work for the patients who individually make decisions on whether to use their services or not. That's very unlike having a whole division of your company working for a hospital CEO that can fire all those doctors, and deliver a death blow to a whole division of your company, on a whim for someone who's a dollar cheaper.

In one day, a hospital can buy a group that took individual physicians 30 years to build. It's a tremendous imbalance, that allows a hospital with deep pockets to quickly have a monopoly over all the providers in a whole market.

 

[emergentmd]

I just want to caution anyone from wanting to start a SDG and know the pitfalls before they jump in. Some on here make it seem really easy as getting a biller to loan you money, getting contracts, setting up the business.

Birdstrike brings up alot of issues that is out of your control. This is the greatest risk of running a SDG; at the end of the day, you have very little control over your contract b/c you have not tangible assets/patient panel.

#1 - Every change in CEO puts your contract at risk
#2 - Carriers/legislation puts your revenue management at risk.
#3 - You will be asked to staff new hospitals/FSER. Ask is more like Required because if you have another management team work a contract, all of your contracts will be at risk.
#4 - Hospitals will want doctor involvement in committees, outreach programs, etc. Doctors are not the easiest to manage

If you are entrepreneurial, willing to take the risks then it will be worth it. But don't go in thinking that you will all be making 150% over CMG because this likely will not happen. The real money is made on facility charges and professional fees just does not have much on the bone.