What is your average reimbursement rate

[InvestingDoc]

I asked this question in another forum but wanted to get my IM folks opinion here too.

I started up my own outpatient clinic. Business is booming, so much so that I'm buying a new building and hired a doctor to join me.

However, insurance has been a huge surprise. Everyone told me that private insurance would pay better than Medicare. This is absolutely not the case for solo providers or large small groups.

My reimbursement ranges from 80 to 95% medicare for the "big boys." Smaller plans are paying 100% medicare.

So I'm curious, what is your reimbursement rate for those who own their own practice or are partners.

When I went to argue with the insurance companies they straight up told me their is no negotiation with new practices. This is a take it or leave it situation.

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[IM2GI]

You won't be able to get a straight answer on this. Rates vary hugely from different states, practices, payers.

 

[bronx43]

How are you surviving on 80-100% of Medicare? Those are Medicaid numbers. I’ve seen practices close up shop with higher reimbursement rates than those. At that point, you’re better off just taking all government payers and have less headache with AR and paperwork.

 

[InvestingDoc]

How are you surviving on 80-100% of Medicare? Those are Medicaid numbers. I’ve seen practices close up shop with higher reimbursement rates than those. At that point, you’re better off just taking all government payers and have less headache with AR and paperwork.

Overhead is low which is how I'm doing so well. In fact, even with low reimbursement, I'm pulling in more money per year now than I did as a hospitalist seeing about 15-23ish patients a day.

Now, I am working M-F 8-5 with weekends and all holidays off while as a hospitalist I worked 7 on and 7 off. So per hour worked it comes out to be pretty similar.

My overhead is only about 25% at this point in time. I don't have a practice manager which cuts down dramatically on overhead costs.

I do all my own advertising and built my own website to keep costs low. I talked to some local surgeons and they told me that they had to do the same when they started out. Took less than medicare since insurance was not willing to negotiate and then once they got big enough threatened to drop them and they finally increased to medicare rates.

I guess this is not uncommon in my part of Texas.

 

[bronx43]

Wow 25%... do you think you can keep that up? I don’t think I’ve ever seen a practice have that low of overhead, primary care or otherwise.

 

[InvestingDoc]

Wow 25%... do you think you can keep that up? I don’t think I’ve ever seen a practice have that low of overhead, primary care or otherwise.

Once I move into the new clinic space I'm expecting overhead to go up to about 30-40% range. However, since I'm buying the space some of the monthly payments will be going towards equity in the space.

 

[fasteddie911]

Probably get a better answer on WCI. Its such a huge variability, but I always thought TX was better about private insurance reimbursement, guess not. I guess being independent these days you're low priority and low negotiation position to insurance companies. I know some places, PP get maybe 0-10%% of medicare reimbursement from private insurance, maybe more, but rarely less than 100%. If you're successful on those reimbursement I'd almost think you should only take medicare, market yourself that way. Again its area specific but where I am medicare patients are hardpressed to find a young doc taking medicare patients. Maybe keep a toe in the private insurance pool to stay diversified a little.

 

[deleted547631]

Overhead is low which is how I'm doing so well. In fact, even with low reimbursement, I'm pulling in more money per year now than I did as a hospitalist seeing about 15-23ish patients a day.

Now, I am working M-F 8-5 with weekends and all holidays off while as a hospitalist I worked 7 on and 7 off. So per hour worked it comes out to be pretty similar.

My overhead is only about 25% at this point in time. I don't have a practice manager which cuts down dramatically on overhead costs.

I do all my own advertising and built my own website to keep costs low. I talked to some local surgeons and they told me that they had to do the same when they started out. Took less than medicare since insurance was not willing to negotiate and then once they got big enough threatened to drop them and they finally increased to medicare rates.

I guess this is not uncommon in my part of Texas.

Could you do a financial breakdown of your pratice numbers (or close estimates) and post it on your blog? I'm going into IM and I'm quite intrigued with your solo experience. I love your low overhead!

 

[InvestingDoc]

Could you do a financial breakdown of your pratice numbers (or close estimates) and post it on your blog? I'm going into IM and I'm quite intrigued with your solo experience. I love your low overhead!

Sure, I can do that. I haven't posted in a while since business has steadily grown and eaten up a lot of my time. I opened doors about 10 month ago now and saw something like 6 people my first week. 3 of those were friends or friends of friends.

I'm now averaging about 80 to 90 patients a 4.5 day work week. I'm adding another physician in the coming months to my practice since my practice is almost full. Once she joints, I might break 1M in gross income this calendar year. We will see...*fingers crossed*

That will change my overhead as a total but I'll still report it as overhead per doctor.

 

[bronx43]

Sure, I can do that. I haven't posted in a while since business has steadily grown and eaten up a lot of my time. I opened doors about 10 month ago now and saw something like 6 people my first week. 3 of those were friends or friends of friends.

I'm now averaging about 80 to 90 patients a 4.5 day work week. I'm adding another physician in the coming months to my practice since my practice is almost full. Once she joints, I might break 1M in gross income this calendar year. We will see...*fingers crossed*

That will change my overhead as a total but I'll still report it as overhead per doctor.

Wow... that's incredible. Congrats my friend. You are a true inspiration.

 

[deleted547631]

Sure, I can do that. I haven't posted in a while since business has steadily grown and eaten up a lot of my time. I opened doors about 10 month ago now and saw something like 6 people my first week. 3 of those were friends or friends of friends.

I'm now averaging about 80 to 90 patients a 4.5 day work week. I'm adding another physician in the coming months to my practice since my practice is almost full. Once she joints, I might break 1M in gross income this calendar year. We will see...*fingers crossed*

That will change my overhead as a total but I'll still report it as overhead per doctor.

This is lovely to see! You're inspiring and I wish you continued success. So in less than a year your practice grossed over I'm assuming $700K+ with you as solo provider at roughly 25% overhead doing 100% outpatient IM. I'll keep a close eye on your posts and blog from now on.

 

[medsc1]

Sure, I can do that. I haven't posted in a while since business has steadily grown and eaten up a lot of my time. I opened doors about 10 month ago now and saw something like 6 people my first week. 3 of those were friends or friends of friends.

I'm now averaging about 80 to 90 patients a 4.5 day work week. I'm adding another physician in the coming months to my practice since my practice is almost full. Once she joints, I might break 1M in gross income this calendar year. We will see...*fingers crossed*

That will change my overhead as a total but I'll still report it as overhead per doctor.

This is awesome! Can you share how many employees you have and what positions?

I ask this because I’m rotating at a FM clinic with 7 employees, and the doc is always complaining about the overhead. But it seems like every employee is necessary for the practice to run.

 

[InvestingDoc]

This is awesome! Can you share how many employees you have and what positions?

I ask this because I’m rotating at a FM clinic with 7 employees, and the doc is always complaining about the overhead. But it seems like every employee is necessary for the practice to run.

I have 2 full time employees and I share a third of an employees salary. The two full time employees are paid about 10% over market rate for medical assistants. I also give them quarterly bonuses based on how busy we are. They often have overtime and don't mind working extra.

The other employee is my biller. I share her with the two other surgeons and she is in house.We are all 3 different businesses but she only does billing for all of us. This means I can keep my biller in house, can bounce things off her and only pay about a third of her salary. She also is backup answering phones in the even that both of the ladies up front are on the phone. For all this, she is paid about 30% over market rate.

I used to help my dad manage his business when I was in college, hire and fire employees. I've always believed that if you find a good person, pay them an above market wage, and give them good feedback then they will preform very well. So far this has rung true for me once I found good employees. My first employee was a disaster and I fired her pretty quickly.


My overhead is so low since everyone has multiple roles. There are few down moments throughout the day. Everyone is working all day except for lunch when they come into clinic.


The way the work flow usually works is both MA's up front. They answer the phone if needed. One is checking in, running insurance upon checkin, and doing the meet and greet process. Once paperwork is filled out the other MA then takes the patient back and rooms them. They take vitals, then present the patient to me.

This MA then goes back up front and starts the note. They enter everything in that the patient put on the paper. PMH, PSH, allergies, meds etc. This happens while I'm talking to the new patients. Then towards the end of the visit, I open the chart and confirm all the information is correct, send in meds, imaging or whatever.

If the patient needs blood work then one of the MA's will come get them out of the room, take them to the blood draw station, draw blood, then send them on their way.

There is always at least one person up front meeting and greeting. Always at least one person to answer the phone. When there is no patient there, I delegate prior auths to the MA's and if their is a denial then I take care of it.


We work hard, and the MA's with bonuses and overtime are probably making about 60% more than other MA's. They don't mind working hard since they are young and want to pay down debt.

I'm going to add another MA soon once the new doctor starts. But I think that 3MA's and my one third biller on phone answering back up will be all we need.


I do all my own marketing, I built my own website, I am my own practice manager. If we get a few people call in back to back then I'm out the door to nearby clinics to introduce myself to doctors or bring them goodies to remind them I'm around. Hell, when one of the MA's take off, I have even drawn blood, I've cleaned rooms, and I've answered the phone on back up when we got slammed.


If you want to start your own business, you're gonna work very very hard. I'm willing to do that. Once we get more doctors, more MA's, then when one person is gone we wont fill it so bad. But for now, I'm not above cleaning a room, running a UA or pregnancy test, or whatever needs to be done to keep up the growth.

I should have the new MA and doctor online in about 2 months. SO that will take a load off and I can take a step back Currently I'm putting in 4.5 days a week at work and I would guess about another 20 hours on admin stuff. A big part of that is me writing up contracts for this new doctor, getting all various types of insurance set up for the new doctor. So once that settles down, it will get easier.

I wont lie. It has been A LOT of work.

 

[InvestingDoc]

This is lovely to see! You're inspiring and I wish you continued success. So in less than a year your practice grossed over I'm assuming $700K+ with you as solo provider at roughly 25% overhead doing 100% outpatient IM. I'll keep a close eye on your posts and blog from now on.

Currently on track if my production stay flat to end of the year to end at about 700k in gross income for just me for the year. My overhead the last 2 months has been 27% and 24% respectively.

Edit: the reason I say stay flat is because my schedule is completely maxed out so I just cant fit any more patients in during the day unless I extend hours.

 

[bronx43]

Currently on track if my production stay flat to end of the year to end at about 700k in gross income for just me for the year. My overhead the last 2 months has been 27% and 24% respectively.

Edit: the reason I say stay flat is because my schedule is completely maxed out so I just cant fit any more patients in during the day unless I extend hours.

Valuable information!

One thing I have to ask is how do you gross 700k if you said that private insurers pay you less than Medicare fee schedule?

If you do the math of seeing 80-90 pts a week and working 50 weeks a year, that means you have to generate $150-175 per patient. Maybe it’s doable for new patients but returns would be very hard.

 

[InvestingDoc]

Valuable information!

One thing I have to ask is how do you gross 700k if you said that private insurers pay you less than Medicare fee schedule?

If you do the math of seeing 80-90 pts a week and working 50 weeks a year, that means you have to generate $150-175 per patient. Maybe it’s doable for new patients but returns would be very hard.

Most of my patients are BCBS who pays 100% medicare. In fact, that is about 40% of my clinic. SO this plus medicare ends up being a decent chunk of my patients who end up paying medicare rates. I've also added plans called Sendero, Oscar, and a local hospital plan all of which pay 100% medicare. This plus cash pay patients helps raise our income. I don't accept medicaid.

I was able to negotiate with Mckesson about my vaccine prices. Some of the prices dropped significantly.

I now make about $30 $10 to $20per vaccine and have other services that add on extra money. This includes EKG's, tobacco cessation, venipunture etc all add to the reimbursement of a visit.


Also, during physical exams, if I find out that someone has a new problem (like new diagnosis of HTN) I can bill as a physical exam plus an acute visit. I'll admit this is a very small portion of my revenue but it all adds up.

Most of my visits have the visit, plus other add ons. This may include blood draw, maybe UDS if on Adderall, UA, pregnancy test, flu tests, rapid strep etc. This all adds up so the visit is almost never just acute care visit.