More job questions

[earboy]

To all the sage PP guys:

Firstly, thank you for all the wonderful advice you have given all of us.
Secondly, I ended up not taking that job in TX for several reasons.
Now, I'm in my fellowship in beautiful southern CA and considering staying in PP here.

One practice here has an offer but I don't yet have all of the fine details. But the premise is to come on as an independent contractor rather than employee or partner. No salary. Straight up take home 50% of net collections from the beginning. Fah-Q had advised previously that this was the way to go. I'm not shy about doing it but I think that's all it is. There's no partnership. There's already allergy and audiology and I wouldn't be getting passive income from these. I was told I could get a piece of other ancillary things that I do help establish in the future.

There's also some income to make from taking call for a few of the area hospitals. ~6K for a weekend of call at several hospitals.

I feel like I'd be selling my income potential really short if basically I'm giving up 50% of everything I collect forever without any chance of taking a share of the extra income that I'm generating for the practice. And also not being able to get any of the passive income from ancillary services. It feels like I should be an equal partner after some duration, right? Am I seeing this setup in the right light?

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[Pir8DeacDoc]

You're probably not exactly talking to me because I've only been in practice a few months and I am definitely working out the details of these sorts of things. But I'll get the ball rolling and add what I can.

That said, how is your schedule going to be made? Are you going to get the crap/low paying patients that no one else wants to see? Are you going to see people that may potentially get fit for a hearing aid or need allergy testing/immunotherapy? If so then how is that money divided? Specifics vary but hearing aids can have a 100% and higher markup and if you send that patient along and don't see that money then you are missing out. If you aren't seeing any of the allergy money then you are missing out too. This may be their way to cover overhead. Let's say for example their overheard is 60% (high) and they are going 50/50 with you. The extra 10% to make up on with you can be raised through hearing aids/audiology.

Will you have a set schedule or just fill in where they need you? We have an older doc here at my practice that works on a 50% basis in terms of his take similar to what you describe. He only works when we need him (i.e. someone else is on vacation or there is a gap for some reason in our schedule). He does not take call. Will you take call? How is that reimbursed?

6K for a weekend of call sounds like a lot to me (but I don't really know anything about our set up in that regard) Makes me wonder if they are going to hammer you with a lot of trauma, etc.

Just my first thoughts without thinking too much about it. I'm having a slow morning. This snow storm thing is keeping people home.

 

[earboy]

So now I have the contract:

​

Contractor shall be paid compensation equivalent to 50% of the Net Collections actually received for professional services rendered by Contractor. "Net Collections" shall be defined as Total Collections actually received in a given month on all charges for all professional services rendered by Contractor minus billing service fees, currently set at 5% of collections. Contractor shall post charges at Contractor's usual and customary billing rates for services rendered, regardless of the methodology by which Contractor expects to be paid (including indigent patients, capitation, global fees, professional courtesy discounts or other administrative or contractual adjustments).

So it's not even 50%, it's 45% with this collection fee. Also, malpractice is covered but that's it. No health insurance, no credentialing, no CME, no retirement plans. I'm only a contractor, never an employee or partner. There's no income from anything ancillary except allergy testing that I would do.

This is a huge waste of time in my opinion. I feel like I'm undercutting myself with this. I'm giving up 55% of everything I collect to work in an office space in a nice city in CA. I'd never realize my true earning potential. I'd rather go solo than take this kind of offer.

 

[Fah-Q]

Sorry, I stopped reading after the word California.

Reimbursement sucks. Cost of living and taxes are astronomical. Rapidly expanding Medicaid population and rapidly contracting privately insured population. Managed care runs the whole state. Real estate and wages are inflated. It's just a terrible environment for a medical practice.

Some people just must live in California accept all of the above in order to live there. Unless you are one of those people run away and don't look back.

 

[Pir8DeacDoc]

I'll preface again by saying I'm not the best to address these issues.

It's not like you personally will get 100% of what you bill for if you go into solo private practice. There is overheard associated with being in practice. At my office it's about 55%, which is average to a little high I think. Just something else to consider. I'm not familiar with the independent contractor model of employment so I can't really help you much with that in terms of possible tax benefits of repercussions.

 

[resxn]

So now I have the contract:

​

Contractor shall be paid compensation equivalent to 50% of the Net Collections actually received for professional services rendered by Contractor. "Net Collections" shall be defined as Total Collections actually received in a given month on all charges for all professional services rendered by Contractor minus billing service fees, currently set at 5% of collections. Contractor shall post charges at Contractor’s usual and customary billing rates for services rendered, regardless of the methodology by which Contractor expects to be paid (including indigent patients, capitation, global fees, professional courtesy discounts or other administrative or contractual adjustments).

So it's not even 50%, it's 45% with this collection fee. Also, malpractice is covered but that's it. No health insurance, no credentialing, no CME, no retirement plans. I'm only a contractor, never an employee or partner. There's no income from anything ancillary except allergy testing that I would do.

This is a huge waste of time in my opinion. I feel like I'm undercutting myself with this. I'm giving up 55% of everything I collect to work in an office space in a nice city in CA. I'd never realize my true earning potential. I'd rather go solo than take this kind of offer.

The wording in the contract is ambiguous. I can't agree that it equals 45%. They define Net Collections as Total Collections minus the 5% billing which you could then argue that you're collecting 50% of the remaining 95% of collections. Let's say that you collect $20k month 1 to make easy numbers. 5% off the top is $1K, then you get 45% of the remaining $19k which is $8,550 that month. It'd be easy to work backward and see how much in collections you'd have to make to earn a median ENT income. I'd do that before assuming anything based on that wording. You can always negotiate a contract. If it's not negotiable, it's not a contract.