Urgent contract negotiation advice

Therapulse.ai - The AI Scribe for Mental Health
This forum made possible through the generous support of SDN members, donors, and sponsors. Thank you.
borne_before

borne_before

Full Member
2+ Year Member
Joined
Jul 13, 2020
Messages
1,324
Reaction score
1,784
Hello, if you've been following my working Saturday thread, you know I got a job offer! I think this place will be a good fit.

The things I'm most concerned about are the fee split and a non-compete.

They want to offer a small starting salary and then transition over to a 50/50 split, where they pay social security tax (I wont be a 1099 contractor). They're offering some standard benefits (ceu money, 50% malpractice insurance reimbursement, 3% simple IRA match, med insurance credit).

I realize a 60/40 split is good (Standard) for a 1099 contractor.

Can y'all think of anything else to negotiate.

I really suck at this stuff.

Also, it feels great to be able to leave.
Members don't see this ad.
 
Last edited:
Congrats!

This sounds like a job for @PsyDr

I think the biggest thing you picked up at the last place was negotiate a clear limitation on schedule days/times, how that gets changed, process, etc...

No real experiecne negotiating the rest, but I would think with any transition like that, gray areas can leave you exposed to subjective interpretations and shifting time lines. Best to be clear with goals and when things kick in, etc..
 
Members don't see this ad :)
Apologies for not following the other thread so I may be a bit unclear about some stuff. I agee with Wis about a couple of points. 50/50 would be a non-starter for me at my stage as well. Is there an opportunity to shift beyond 50/50 in the future or is that where you will always be? If the later, thats a real cap on earning potential long term

I assume you would be W-2 with the SS pay-in. Depending on the salary/expectations for contract (how many billables), it might not be a huge bump with a 50/50 split, depending on bill rates and service types. Is it all therapy or is there assessment option? Is anything set to that split? How does referral work and what is the guaranteed flow? What flex is there in terms of PTO / other health benefits / scheduling and admin support? I also assume the insurance is for your personal premiums? The match isn't great and below average, depending on size of company, but it is there so that's nice.
 
Is this a post-doc or a licensed position? Some context might be helpful. 50/50 sounds downright awful to me too. Even 60/40 is pushing it, frankly unless there are special considerations (stupid-high overhead for some reason related to your specific type of practice, etc.). I guess also depends on what that realistically would work out to be in the end - if it is an inroad to something high-paying I might be more amenable. The non-compete could be reasonable or highly questionable but you don't provide much info there.
 
In the end, depends on how badly you want to leave the other place, or if you have other options. The 50/50 split is not great. 50% of your insurance premium is not great either. I'd be curious to what gross salary is after all of that. For a 40 hour week, you may be getting killed there. To put it bluntly, this would be the offer that I leverage against the place I want to actually work for to get a better perks somewhere.
 
borne_before said:
Hello, if you've been following my working Saturday thread, you know I got a job offer! I think this place will be a good fit.

The things I'm most concerned about are the fee split and a non-compete.

They want to offer a small starting salary and then transition over to a 50/50 split, where they pay social security tax (I wont be a 1099 contractor). They're offering some standard benefits (ceu money, 50% insurance reimbursement, 3% simple IRA match).

I realize a 60/40 split is good (Standard) for a 1099 contractor.

Can y'all think of anything else to negotiate.

I really suck at this stuff.

Also, it feels great to be able to leave.
Click to expand...

Corporate America may see gross until you see things like remote work, combined PTO/sick days/professional days, company credit card for all things work and license related, discounted stock options, multiple retirement account contributions, health club memberships, severe university tuition discounts agreements, discounted health insurance options, overall community/social influence and reputation, networking potential, leadership potential, interdisciplinary exposure and overall professional growth potential, salary protection and non-RVU based work evaluations/metrics (think COVID), advancement potential beyond service line clinician, etc. ALL WHILE WORKING STRICT BANKERS HOURS.

Frankly, I think working for an already established group practice for that kind of arrangement is probably aimed at ECPs (first 3 years?), near retirees, and those who just want to "see patient, make some money, go home."

That said, I don't/can't work Saturday morning either. And I would want to work "somewhere else' too.

Just to start, at the very, very least, I would require that any organization I worked for pay for all my licensing-related fees. I really makes no sense that they would NOT do this.
 
Last edited:
Ah, let me provide some additional information.

The job is part of a large developmental pediatrics group in a pretty wealthy area in a major metro area.

The psychologists are not paneled and only take private pay.

It's a mix of assessment and intervention and I'll probably surpass my current salary after 20 hours per week of work.

Because they're an established group of about 20 medical providers, the referrals are pretty busy. They have a two month wait list for ASD evals.

The start up salary is commensurate with my current salary.
 
Check your state regs regarding non-competes for psychologists. They are non-enforceable for clinicians in my state, andcfor other disciplines there is a "garden clause". In some states, only the non compete clause in the contract is voided. In others, the clause voids the entire contract. I have one in my contract, but we all know it's not enforceable.
 
There will be no non-compete. Just a non-solicitation clause.
 
borne_before said:
There will be no non-compete. Just a non-solicitation clause.
Click to expand...

All depends on what you are into professionally I guess. Better? Yes. Growth? Maybe?

You gonna see patients for ASD or similar psychological evaluations for the next 20 years? Probably not (if i were to guess).

Anything tied to billable productivity if I don't own it and has no real back-up and/or growth/segway potential (especially at this time) is something I would think twice about.
 
Last edited:
erg923 said:
segway potential
Click to expand...

1599004890734.png


In all seriousness, I really appreciate the feedback all the non-ECPs are providing in this thread. I'm on the cusp of being in a position to make some of these decisions, so it's enormously helpful.
 

Attachments

  • 1599004844739.png
    1599004844739.png
    1.8 MB · Views: 99
beginner2011 said:
View attachment 317471

In all seriousness, I really appreciate the feedback all the non-ECPs are providing in this thread. I'm on the cusp of being in a position to make some of these decisions, so it's enormously helpful.
Click to expand...

My typical response to such mockery: "I know where you live MFer..."

But I don't in this case.

So, I guess.... its kinda cool???
 
Members don't see this ad :)
borne_before said:
The job is part of a large developmental pediatrics group in a pretty wealthy area in a major metro area.

The psychologists are not paneled and only take private pay.
Click to expand...

50/50 is not great and I would push for a better split. Ultimately, though, it depends on how much you want it.
 
borne_before said:
Hello, if you've been following my working Saturday thread, you know I got a job offer! I think this place will be a good fit.

The things I'm most concerned about are the fee split and a non-compete.

They want to offer a small starting salary and then transition over to a 50/50 split, where they pay social security tax (I wont be a 1099 contractor). They're offering some standard benefits (ceu money, 50% malpractice insurance reimbursement, 3% simple IRA match, med insurance credit).

I realize a 60/40 split is good (Standard) for a 1099 contractor.

Can y'all think of anything else to negotiate.

I really suck at this stuff.

Also, it feels great to be able to leave.
Click to expand...
What’s a “med insurance credit”? If there’s no actual group insurance plan, that would be dealbreaker for me.
 
futureapppsy2 said:
What’s a “med insurance credit”? If there’s no actual group insurance plan, that would be dealbreaker for me.
Click to expand...

Exactly, between getting health/dental covered and a good 401/403 match, there is little reason to work for another practice over private work. You're still essentially a 1099 in this situation with a terrible split at 50/50.

Another option in this instance, depending on several factors, is to look into what it would take to do private prac in your area. What would your startup costs be to do things on your own? You could set up the initial steps while at your current job collecting a paycheck. May be harder if you are assessment heavy, as the initial costs are a little higher (i.e., buying testing instruments).

If the split is 50/50 with no wriggle room, with the benefits listed, this is not a good deal, at least not in any of the markets I am familiar with. If it provides much more peace of mind than your current job, may be worth it to you, but I would have my eyes open for different jobs from the start. Though, jumping jobs very quickly tends to not look great on applications, so in that case I, personally would stay at the old job and be looking rather than be somewhere else for ~6-12 months and jumping to something different.
 
I think it's important to recognize that not all people will have some form of social support that promotes economic security, or have a risk tolerance that would allow one to put it all on the line. I also think it is important to remember that people are sometimes stuck between bad options and no options. This might be one of those cases, and it might lead to going off on your own, as an associated practice.

Like an immigrant convenience store owner that sleeps in the back on a cot, one can do it with no money, no social support, and no options. It's just not comfortable.

However,

1) 50/50 is BS. The owner is gonna say there is a 35% overhead, and then they profit 15%. This is either a lie, or evidence that the owner is a bad businessman/women. Overhead is dynamic, not static. Anyone who has ever had an apartment with a roommate can tell you that a 2 bedroom place is not twice as expensive as a 1 bedroom. The same goes for business overhead, mostly.

2) I am equivocal on the med insurance card. It sounds like they're talking about a HSA, which are kinda cool. But there are earning limits for HSA eligibility, which means their employees have never made more than that. If that is what they are talking about.

3) MAKE SURE YOU ARE LABELED MEDICAL STAFF. This is super important for many reasons.

4) Look into your state's laws. If non-physicians can own medical practices (not legal in most states), ask about the option of buying into the practice.
 
PsyDr said:
3) MAKE SURE YOU ARE LABELED MEDICAL STAFF. This is super important for many reasons.

4) Look into your state's laws. If non-physicians can own medical practices (not legal in most states), ask about the option of buying into the practice.
Click to expand...

Can you speak to #3 and #4 a bit more?Why is it important to be labeled medical staff? Where does the labeling occur? In the contract? Billing? Something else?

I recently went down a rabbit hole trying to understand contracts and tax law related to group practice structure, but it's still extremely murky to me. S corps and LLCs and whatnot. What would the practice structure be that would allow one to buy in?
 
beginner2011 said:
Can you speak to #3 and #4 a bit more?Why is it important to be labeled medical staff? Where does the labeling occur? In the contract? Billing? Something else?

I recently went down a rabbit hole trying to understand contracts and tax law related to group practice structure, but it's still extremely murky to me. S corps and LLCs and whatnot. What would the practice structure be that would allow one to buy in?
Click to expand...

Medical staffing in organizations has to do with certain privileges and voting rights. If you're not considered medical staff, you do not have those privileges (which in some cases can increase your productivity/revenue) and you cannot vote on major changes in the org.

As for #4, some states do not allow non-physicians to own what is considered a medical practice, depending on how the practice is set up. If the org is setup and designated as one, and the state law forbids non-physicians from having an ownership stake, there is no option for partnership for the OP and their ceiling is quite limited.
 
Just wanted to thank everybody who has provided info/perspectives. I'm early in my career and have only worked in the VA and while I'm not anticipating moving into the private sector anytime soon, I'm glad to be getting this info as well.
 
WisNeuro said:
Medical staffing in organizations has to do with certain privileges and voting rights. If you're not considered medical staff, you do not have those privileges (which in some cases can increase your productivity/revenue) and you cannot vote on major changes in the org.

As for #4, some states do not allow non-physicians to own what is considered a medical practice, depending on how the practice is set up. If the org is setup and designated as one, and the state law forbids non-physicians from having an ownership stake, there is no option for partnership for the OP and their ceiling is quite limited.
Click to expand...

Interesting. Does this mean that, in some states, a group of PhD psychologists would not be able to open a group psychotherapy practice together because this would be considered non-physicians owning a medical practice?
 
In addition to wis's statements,

3) In addition to wis's stuff: If you are on medical staff, it is easier to add/remove/change what the hospital/clinic has decided is your scope of practice. For example, one of my old hospitals had scope of practice for health psych and neuropsych. Health psych had something in the bylaws about implant evals. There was a problem with DBS, because the hospital bylaws could mean that a neuropsych would technically not be qualified to do an evaluation for DBS, while a health psych would. Which made no sense. Easy enough to explain this in the med exec committee. Likely would have been hard otherwise. I know of a few people in a non RxP state that are allowed to order some imaging, because they are on medical staff, and the hospital has determined it is within their scope of practice to order, not interpret.

4) Most states, but not all, prohibit non-physicians from owning a medical practice. Makes sense. You wouldn't want an personal injury attorney to own the radiology group that does all the spine MRIs for his lawsuits. If OPs state prohibits nonphysician ownership of medical practices, my advice is a nonstarter.

HOWEVER, it is possible that OP is in a state that allows nonphysicians to own medical practices/hospitals. Medicine has a long standing practice of hiring young physicians, making them work for X years, and then allowing the young guys to buy ~1-3% of the business per year. Usually, these practices then give out dividends to owners 1-4x year. This is important, as dividends are taxed at 15%, and not the usual federal rate. If OP had this option, took it every year, he/she could own 30-40% of a practice by the time they retire. Let's say the practice is worth $1MM, it nets $100k/yr, has 3 partners, and they offer OP 1% buy in per year. OP makes 80k/yr, buys in at 10k/yr (before taxes because it's a business expense), and contribute 8k/yr to his/her 401k. And let's assume there is no business growth, or inflation in this world because I am lazy. And everyone lives forever, and the partnership is capped at 25%. OP would have ~200k in his/her 401k at 25yrs in. Then he/she would own 25% of the 1MM company, for an increase of net worth of 250k. Then he/she would get a dividend check of 25k/yr, with a take home of ~21k/yr after taxes, ad infinitum.

@beginner2011 this is only for MEDICAL practices, not psychology practices.
 
R. Matey said:
What's considered a "good split" and how common are these?
Click to expand...

Depends somewhat on several factors. How expensive is overhead in your area (are office rentals exorbitant, do you require a lot of materials to practice, etc). Then, what kind of other infrastructure and support do they give? Do they market and fill your schedule?

Personally, I could have a full schedule without marketing in a PP, so that means nothing to me monetarily. In my area, for an established clinician with a good reputation, a 65/35 would be the absolute lowest I'd consider to join a practice. But, you have to assess your own situation. I have the financial flexibility to easily open my own PP, with a very minimal hit to my liquid assets. Many do not.
 
WisNeuro said:
Depends somewhat on several factors. How expensive is overhead in your area (are office rentals exorbitant, do you require a lot of materials to practice, etc). Then, what kind of other infrastructure and support do they give? Do they market and fill your schedule?

Personally, I could have a full schedule without marketing in a PP, so that means nothing to me monetarily. In my area, for an established clinician with a good reputation, a 65/35 would be the absolute lowest I'd consider to join a practice. But, you have to assess your own situation. I have the financial flexibility to easily open my own PP, with a very minimal hit to my liquid assets. Many do not.
Click to expand...

Agreed. If you're just starting out I would still not go lower than 60/40 *as a general rule* but the devil's in the details.
 
So, I think i'm going to take it.

They offered to match my current salary for the next six months (or, should I be making more), I can switch to the fee split whenever.

The 50/50 fee split is pretty non-negotiable and the other psychologists (who have been there a while all seem happy with it).

I would not even consider a 65/35 fee split if I took insurance. This place is private pay only.

However, I should still be pulling approx 100 dollars for an hour of therapy. Assessment, my specialty, is MUCH MUCH more lucrative. This is in a criminally under-served state and the group is in a very wealthy area of our major metro. There is no shortage of referrals, as this is one of the only peds groups in the state.

I figure, why not! It seems like pretty low risk right now and it's either this or starting my own practice. The medical benefits are similar to my current job. It might help me get a foothold in the wealthy area should I start my own practice.

Plus, my soul is slowly dying here at my current job. I can always come back, if I need too. I've been here over two years.
 
Last edited:
borne_before said:
So, I think i'm going to take it.

They offered to match my current salary for the next six months (or, should I be making more), I can switch to the fee split whenever.

The 50/50 fee split is pretty non-negotiable and the other psychologists (who have been there a while all seem happy with it).

I would not even consider a 65/35 fee split if I took insurance. This place is private pay only.

However, I should still be pulling approx 100 dollars for an hour of therapy. Assessment, my specialty, is MUCH MUCH more lucrative. This is in a criminally under-served state and the group is in a very wealthy area of our major metro. There is no shortage of referrals, as this is one of the only peds groups in the state.

I figure, why not! It seems like pretty low risk right now and it's either this or starting my own practice. The medical benefits are similar to my current job. It might help me get a foothold in the wealthy area should I start my own practice.

Plus, my soul is slowly dying here at my current job. I can always come back, if I need too. I've been here over two years.
Click to expand...
Congratulations! Every decision comes with pros and cons, and it seems like there are more pros for you with this one. Best of luck!
 
I hesitate to even respond because I'm not sure it will be helpful, but I currently work for a very successful group private practice that takes 30% of my revenue. All my therapy clients are insurance, but the pay is decent (on average $130/hr). They also have many assessment referrals, both selfpay and insurance.

Ultimately I have grown very resentful of this financial setup and am working on going solo. While this position may be the perfect fit for you know, I think you may outgrow it fairly quickly.

Good luck!
 
LadyHalcyon said:
I hesitate to even respond because I'm not sure it will be helpful, but I currently work for a very successful group private practice that takes 30% of my revenue. All my therapy clients are insurance, but the pay is decent (on average $130/hr). They also have many assessment referrals, both selfpay and insurance.

Ultimately I have grown very resentful of this financial setup and am working on going solo. While this position may be the perfect fit for you know, I think you may outgrow it fairly quickly.

Good luck!
Click to expand...

I think this will be a starting point for that!
 
LadyHalcyon said:
I hesitate to even respond because I'm not sure it will be helpful, but I currently work for a very successful group private practice that takes 30% of my revenue. All my therapy clients are insurance, but the pay is decent (on average $130/hr). They also have many assessment referrals, both selfpay and insurance.

Ultimately I have grown very resentful of this financial setup and am working on going solo. While this position may be the perfect fit for you know, I think you may outgrow it fairly quickly.

Good luck!
Click to expand...

Interesting -- Are you taking $130/hr or is the insurance company paying $130/hr and you're taking 70% of that?
 
You must log in or register to reply here.

Similar threads

D
Ethics of this 1099 contract clinical psychologist job
Replies
7
Views
1K
ClinicalABA
ClinicalABA
bcliff
AMC neuropsychology salary negotiation
Replies
7
Views
2K
smalltownpsych
smalltownpsych
cara susanna
Behavior contracts
Replies
6
Views
633
Sanman
Sanman
pinkbromeliad
Help from Non-VA Health System Providers: salary and negotiation
Replies
25
Views
2K
R. Matey
R. Matey
P
PhD/PsyD Advice for Peds or Child Hospital Internships?
Replies
5
Views
602
Therapist4Chnge
T
Top