Starting a practice vs buying one

[podgod22]

So I've come across a couple of good opportunities...at least I think they are good. I'll try to shed some light on both on here:

The first is a well established practice. Its a big but not popular city. It has a pretty substantial population. There's maybe 6 or so podiatrists .
Current owner is an older physician. Looking for an out in the next year. Solo practice, modern, but shows signs of the times (eg lack of web presence, EMR, etc). But its established so it's pretty busy.

For a solo older doc, I think the collections are decent, however, the asking price is about 150k ABOVE what the average gross collections are. Doesn't take a genius to tell me this is significantly overpriced.

How would one handle this situation? I don't want to obvious low-ball anything. I've heard at a conference that podiatry practices these days go for 25-30% of the gross collections. Not sure how true it is, but looking for some advice from the pros on here. If I were to make an offer, I would want it to be sound mathematically and I would want to be able to back up the number with evidence. I have received some documents with numbers dating back several years. Seems kinda short tho and Im not sure what else I should be analyzing.

Part 2 of this story is the possibility of just going out and starting from scratch, probably somewhere in the nearby geographic area. I want to keep it as lean as possible to start with my only MAJOR expenses being rent and x-ray. A quick tabulation of inventory shows me that this MAY be possible for roughly 130k (this includes other services like malpractice, call center usage, EMR, chairs and other supplies and isn't just limited to X-ray and rent). Trying to get a rough idea from the self starters on here on what their takes are.

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[HardRoadPaved]

Part 2 of this story is the possibility of just going out and starting from scratch, probably somewhere in the nearby geographic area. I want to keep it as lean as possible to start with my only MAJOR expenses being rent and x-ray. A quick tabulation of inventory shows me that this MAY be possible for roughly 130k (this includes other services like malpractice, call center usage, EMR, chairs and other supplies and isn't just limited to X-ray and rent). Trying to get a rough idea from the self starters on here on what their takes are.

Are you a self-starter? Go cold if you can weather the storm and have savings to buffer a build. I dont like nail care so I am glad I never inherited a nail clinic. Or you can just dump the non-covered patients to nurses: Nursing Students Offer Foot-Care Clinic - Door County Pulse (And they do soaks and lotion!)

 

[icebreaker32]

There are lots of formulas, but no one easy way to value a practice. You need an honest look at the assets and to make sure they don’t bill in a creative way. Do they want a full payout from the bank or are they willing to be creative and let you pay them back? How ling will owner stay on? What is the staff like, what is their compensation like, is it above or below market rate and will they stay?

You really need to make sure that you will have positive cash flow if you buy a practice and and obviously that you want to live in the area.

If starting cold you need to make sure aesthetics are nice and location is convenient, but you go smaller on size (or maybe even sublet) and can save a lot on used well cared for equipment including digital X-ray. You can use a less expensive EHR, some are even a free and you can also use one you get "free” with a a billing service. As far as cash flow most work on the side at a nursing homes or an sometimes an established podiatry practice far enough away as not to be competition to keep cash flow positive.

You need to be honest on how much you need to live on. This along with risk tolerance, is what prevents many from ever going solo. Can you live in your parents basement nearby and/or does your spouse if applicable have a good job etc.

If you start cold, banks will usually not lend money for a car or house etc until you have about 3 years of income to prove.....you should probably wait for those things anyways. If you start cold banks may not lend you money to start a practice also, but usually will to buy an established practice.

There is usually a local bank in every community that is more flexible with physicians and sometimes podiatrists are included allowing no down payment on a home, but you still need a few years proof of income or a contract employment.....point being I would find this out now and you might consider doing your banking with them if they have programs like I mentioned that include podiatrists.

 

[Scrantonicity]

I'm just really skeptical now about docs that say they want to hire you on and sell "in the next year". Once you start working and raking in the cash, that doc is gonna realize he doesn't have to actually leave...he'll start taking more and more time off. He'll keep ownership and suck you dry. That's all I see. Guess I'm just jaded...

 

[ExperiencedDPM]

It is mandatory that you do nothing without an attorney and CPA. Both should have experience in practice sales or find someone else.

I am not a fan or either of your choices. In my opinion, solo practice is a dinosaur and it will be difficult to compete.

If for some reason you do purchase the practice, please arrange the sale so you are basically buying his goodwill but NOT his patients. Of course you are taking over his practice and he will have to sign a non compete, etc. But by you not “buying” his charts, every patient is a new patient and you will have no liability on his past treatments.

I’m not recommending this just to allow you to bill each patient as a new patient, it’s for legal reasons.

You don’t want to be the guardian of his old medical records because if there is a legal case you will be dragged in and will have to produce records, etc. You will eventually be dropped from the case but it will take time and money.

A sharp lawyer should understand and be able to structure a deal to allow him to have “custody” of his charts without having the ability to solicit or treat patients or sell those to someone else.

You are in essence starting from scratch, but not REALLY starting from scratch. You just won’t be buying his problems.

 

[heybrother]

1. Do not pay anyone a premium over collections

2. Most practices generate enough cash flow to pay their owners an upper middle class lifestyle (location dependent) but not enough cash flow to repay hundreds of thousands of dollars of additional practice debt - especially by a new owner who is already in debt.

3. Cash flow. The owner didn't get to keep all of his collections. He received a fraction of that. Before I joined my practice the expenses literally consumed 65% of collections. For every 3 patients they saw - 2 were used to keep the lights on. In a situation like that volunteering to pay collections is basically saying - I want to keep 1/3 of collections and then pay that back 3 times over.

4. You are purchasing a depreciating asset that is likely to produce less in collections for the same amount of work. Old providers were often paid on grandfathered fee schedules that won't be available to you.

5. Old paper charts are terrible. You will have to switch to an EHR. The costs associated with these can be substantial.

6. Higher level codes and more complicated surgeries will not save you. The inherent base value of most surgeries ie. the Medicare fee schedule doesn't offer enough premium between complex and non-complex procedures. As such, when they are multiplied by a constant ie. 1.75, 2, etc what you end up with is that forefoot procedures on commercial insurance look very good. If the old owner was pounding out cheilectomies and Austins they may be doing better than you think. A commercial cheilectomy can pay better than a Medicare ankle fusion.

7. Buying a practice reminds me in many ways of the cost of our schooling. This isn't a bad degree if you get out of school $100-150K in debt. $400K - it doesn't work. Practices are similar. The debt needs to be something manageable that can be paid off in a few years.

8. In general, there's a positive attitude towards starting a practice because the selling community is so odious and over priced. I recently spoke to a very nice podiatrist who returned to his local community, started a nice office and got destroyed financially. He was grateful that a hospital hired him. People do crash and burn.

I'm probably repeating myself but I'm trying to distill this down to something. This is a $150-250K job. It shouldn't cost $300K of school and $600K of practice note to buy that. That's the kind of hole philosophy majors dig themselves into.

 

[dtrack22]

It shouldn't cost $300K of school and $600K of practice note to buy that. That's the kind of hole philosophy majors dig themselves into.

And dentists…

 

[PointyNippers]

And dentists…

At least dentists can easily go fee-for-service and get much better returns with patients willing to pay

If for some reason you do purchase the practice, please arrange the sale so you are basically buying his goodwill but NOT his patients. Of course you are taking over his practice and he will have to sign a non compete, etc. But by you not “buying” his charts, every patient is a new patient and you will have no liability on his past treatments.

I’m not recommending this just to allow you to bill each patient as a new patient, it’s for legal reasons.

You don’t want to be the guardian of his old medical records because if there is a legal case you will be dragged in and will have to produce records, etc. You will eventually be dropped from the case but it will take time and money.

A sharp lawyer should understand and be able to structure a deal to allow him to have “custody” of his charts without having the ability to solicit or treat patients or sell those to someone else.

You are in essence starting from scratch, but not REALLY starting from scratch. You just won’t be buying his problems.

I had no idea "buying" charts with a practice was a thing...this is great to know

 

[Creflo]

I may have missed if you have private practice experience, but if you don't I wouldn't buy or start my own. Work for someone in private practice first to get some foundational knowledge of how to run it and bill insurance.

 

[icebreaker32]

Some private practices are really worth a premium, but in most cases these days you are basically buying the assets and taking over all the contractual obligations....lease, phone, billing company, software etc so a doctor that really wants to retire can do so and feel good about having a little money from the sale of his practice, leave his contractual obligations behind and keeping his staff employed. You may pay a little for goodwill, but not that much these days. Of course, if there is real estate involved or surgical center shares etc being offered as part of the sale the cost will be much higher.

 

[Feli]

.... asking price is about 150k ABOVE what the average gross collections are...

It's debatable if you should pay over net (usually avg of last 3yrs net collections) for an office.

Paying over gross is nuts - even for a very good practice. You won't get anywhere with that one.

Solo is possible but not ideal in a city of size to support 5+ DPMs... that'd be more efficient small group. Solo is more ideal in small/rural where rent is cheaper, staffing is lower cost, etc.

As mentioned, unless you are highly familiar with how to bill, see pts efficiently, network, sign up for payers, run an office (via exp, training, or some combo), it's better to learn and save for at least a year. Nobody wants to be an associate/employee, but it has its perks, including learning how a practice runs without the risk/stress. Even plenty of ppl who know how to run an office work crazy hours, do much themselves, and barely scrape by for years. I have a few close friends doing that right now. It's very risky to start up without some exp, esp in a HCOL area. Staffing is your #1 or #2 expense with rent typically... XR is not insignificant but is basically just a one-time. If there are no non-competes in that target area, go ahead and work there where you may open solo to get on payers, on hospitals, and meet docs. If there are non-competes, be mindful of that.

 

[dtrack22]

At least dentists can easily go fee-for-service and get much better returns with patients willing to pay

Even dentists that work for big corporate practices/companies are fine. For now. But at some point the tuition some of them are paying is going to make them very middle class for much of their careers. Midwestern is around $100k for tuition and fees. Add in living expenses and you are coming out of dental school with $400-500k in dental school loans alone.

 

[dtrack22]

A quick tabulation of inventory shows me that this MAY be possible for roughly 130k

It can certainly be done for less than $130k. I opened up an office with $80k in the bank and didn’t spend all of it before I was breaking even. I started off very lean and didn’t have to buy much equipment because it was included in the building I leased space out of (an ortho office). I didn’t get to bill for the technical component of the xray charges, but that wasn’t a bad deal considering I didn’t have to drop $20-30k just for an X-ray machine. I was paying my bills and just about replaced my “podiatry associate job” income by month 3-4. So I could pay myself what another podiatrist had traditionally paid me relatively quickly.

 

[podgod22]

Are you a self-starter? Go cold if you can weather the storm and have savings to buffer a build. I dont like nail care so I am glad I never inherited a nail clinic. Or you can just dump the non-covered patients to nurses: Nursing Students Offer Foot-Care Clinic - Door County Pulse (And they do soaks and lotion!)

I've always been a bit of a work horse...just kinda sick of working for "the man"...as far as weathering the storm, I'm trying to get some stuff lined up to help prepare for that...the usual podiatry suspects of NH etc....hopefully I can do that while mainintng a few days in anew office while it grows....anyone with real experience with this please chime in ! LOL

 

[podgod22]

It is mandatory that you do nothing without an attorney and CPA. Both should have experience in practice sales or find someone else.

I am not a fan or either of your choices. In my opinion, solo practice is a dinosaur and it will be difficult to compete. Possibly...but where can you really go in this day in age with podiatry? either hospital employee, owner , associate or NH traveler.....not sure what other roads are to be paved

If for some reason you do purchase the practice, please arrange the sale so you are basically buying his goodwill but NOT his patients. Of course you are taking over his practice and he will have to sign a non compete, etc. But by you not “buying” his charts, every patient is a new patient and you will have no liability on his past treatments.

I’m not recommending this just to allow you to bill each patient as a new patient, it’s for legal reasons.

You don’t want to be the guardian of his old medical records because if there is a legal case you will be dragged in and will have to produce records, etc. You will eventually be dropped from the case but it will take time and money.

A sharp lawyer should understand and be able to structure a deal to allow him to have “custody” of his charts without having the ability to solicit or treat patients or sell those to someone else.

You are in essence starting from scratch, but not REALLY starting from scratch. You just won’t be buying his problems.

I am not a fan or either of your choices. In my opinion, solo practice is a dinosaur and it will be difficult to compete. Possibly...but where can you really go in this day in age with podiatry? either hospital employee, owner , associate or NH traveler.....not sure what other roads are to be paved

 

[podgod22]

1. Do not pay anyone a premium over collections

2. Most practices generate enough cash flow to pay their owners an upper middle class lifestyle (location dependent) but not enough cash flow to repay hundreds of thousands of dollars of additional practice debt - especially by a new owner who is already in debt.

3. Cash flow. The owner didn't get to keep all of his collections. He received a fraction of that. Before I joined my practice the expenses literally consumed 65% of collections. For every 3 patients they saw - 2 were used to keep the lights on. In a situation like that volunteering to pay collections is basically saying - I want to keep 1/3 of collections and then pay that back 3 times over.

4. You are purchasing a depreciating asset that is likely to produce less in collections for the same amount of work. Old providers were often paid on grandfathered fee schedules that won't be available to you.

5. Old paper charts are terrible. You will have to switch to an EHR. The costs associated with these can be substantial.

6. Higher level codes and more complicated surgeries will not save you. The inherent base value of most surgeries ie. the Medicare fee schedule doesn't offer enough premium between complex and non-complex procedures. As such, when they are multiplied by a constant ie. 1.75, 2, etc what you end up with is that forefoot procedures on commercial insurance look very good. If the old owner was pounding out cheilectomies and Austins they may be doing better than you think. A commercial cheilectomy can pay better than a Medicare ankle fusion.

7. Buying a practice reminds me in many ways of the cost of our schooling. This isn't a bad degree if you get out of school $100-150K in debt. $400K - it doesn't work. Practices are similar. The debt needs to be something manageable that can be paid off in a few years.

8. In general, there's a positive attitude towards starting a practice because the selling community is so odious and over priced. I recently spoke to a very nice podiatrist who returned to his local community, started a nice office and got destroyed financially. He was grateful that a hospital hired him. People do crash and burn.

I'm probably repeating myself but I'm trying to distill this down to something. This is a $150-250K job. It shouldn't cost $300K of school and $600K of practice note to buy that. That's the kind of hole philosophy majors dig themselves into.

This is excellent and so helpful!!! I hope you lecture at some of our conferences!!! this is worth more than any of that other crap they discuss !

 

[podgod22]

It's debatable if you should pay over net (usually avg of last 3yrs net collections) for an office.

Paying over gross is nuts - even for a very good practice. You won't get anywhere with that one.

Solo is possible but not ideal in a city of size to support 5+ DPMs... that'd be more efficient small group. Solo is more ideal in small/rural where rent is cheaper, staffing is lower cost, etc.

As mentioned, unless you are highly familiar with how to bill, see pts efficiently, network, sign up for payers, run an office (via exp, training, or some combo), it's better to learn and save for at least a year. Nobody wants to be an associate/employee, but it has its perks, including learning how a practice runs without the risk/stress. Even plenty of ppl who know how to run an office work crazy hours, do much themselves, and barely scrape by for years. I have a few close friends doing that right now. It's very risky to start up without some exp, esp in a HCOL area. Staffing is your #1 or #2 expense with rent typically... XR is not insignificant but is basically just a one-time. If there are no non-competes in that target area, go ahead and work there where you may open solo to get on payers, on hospitals, and meet docs. If there are non-competes, be mindful of that.

Yeah I was shocked when I saw its off "gross collections"..specifically the multiple of earnings method...which to me doesn't really make sense because it seems like the selling price takes into account "futuristic earnings" for like 3-5 years that the practice would have made

As far as my experience, I've been an associate for several years now. I know billing, obviously there's more I can learned so I wouldn't say I'm "highly experienced" in it...but definitely not a newbie.....

As far as staffing goes, I've been doing some research and obviously want to hire live people when I can...but there's several "tele services" that I've come across. mainly, a virtual "live receptionist" to great patients at the front desk and do the check in/out etc....and I've talked to a couple call centers that answer phones in real time....idk if that's logical or feasible...but it seems like it can fill a void during the initial start up periods....

 

[619]

As far as staffing goes, I've been doing some research and obviously want to hire live people when I can...but there's several "tele services" that I've come across. mainly, a virtual "live receptionist" to great patients at the front desk and do the check in/out etc....and I've talked to a couple call centers that answer phones in real time....idk if that's logical or feasible...but it seems like it can fill a void during the initial start up periods....

A lot to unpack from your post but I will just chime in on this. Starting out with only seeing 3-5 patients a day, you only need one staff upfront and you grow from there. Looking into a call center? you are assuming your office phone will be ringing every second? No it will not.
You need one quality and reliable staff upfront that can do check-in, check-out, answer phone calls etc. You don't need an army of staff when starting out.

Before you hire a CPA or an attorney, contact your local SBA (or Small Business Development Center) in your location. They have qualified business consultants who can evaluate the financials for you. This service is free (paid for by tax payers). He/She at the Small Business Development Center will help negotiate with the practice for what it is actually worth, guide you in securing a bank loan etc. and when the time comes he/she at the Small Business Development Center will let you know when you need to hire CPA or attorney and actually give you recommendations. At this time, you are far enough into the process.

 

[619]

Find local assistance | U.S. Small Business Administration

www.sba.gov

 

[podgod22]

Find local assistance | U.S. Small Business Administration

www.sba.gov

Thank you for this! I will look into it

 

[podgod22]

A lot to unpack from your post but I will just chime in on this. Starting out with only seeing 3-5 patients a day, you only need one staff upfront and you grow from there. Looking into a call center? you are assuming your office phone will be ringing every second? No it will not.
You need one quality and reliable staff upfront that can do check-in, check-out, answer phone calls etc. You don't need an army of staff when starting out.

Before you hire a CPA or an attorney, contact your local SBA (or Small Business Development Center) in your location. They have qualified business consultants who can evaluate the financials for you. This service is free (paid for by tax payers). He/She at the Small Business Development Center will help negotiate with the practice for what it is actually worth, guide you in securing a bank loan etc. and when the time comes he/she at the Small Business Development Center will let you know when you need to hire CPA or attorney and actually give you recommendations. At this time, you are far enough into the process.

As far as "call center" goes, I know phones won't be ringing off the charts. but the agency I looked into charges by minutes used...eg : 100 minutes, x amount of dollars, 200 minutes used Y amount of dollars.....I only considered this in the event that I do not have a staff member ready by the time I open....I haven't actually started looking for staff since I'm still researching actually opening the office (found a few office sites that ill check out etc)...

one other thing I was semi concerned about was the "medicaid factor"...the area I'm looking at has tons of private insurance and medicare, but I know from word of mouth that there is medicaid dying to get seen...not sure how to go about this...is it worth opening the doors to medicaid initially to get patients in and get the office moving, and then taper out (straight medicaid vs its subsidiaries etc)...maybe take certain Medicaids and not others? is medicaid really detrimental to private practices? obviously certain services won't make sense (surgery, orthotics etc) but I would imagine u can get something at least from office visits or nail procedures....

 

[Drjc1977]

I'm just really skeptical now about docs that say they want to hire you on and sell "in the next year". Once you start working and raking in the cash, that doc is gonna realize he doesn't have to actually leave...he'll start taking more and more time off. He'll keep ownership and suck you dry. That's all I see. Guess I'm just jaded...

Never make a decision based on a promise unless it is in writing.

 

[619]

one other thing I was semi concerned about was the "medicaid factor"...the area I'm looking at has tons of private insurance and medicare, but I know from word of mouth that there is medicaid dying to get seen...not sure how to go about this...is it worth opening the doors to medicaid initially to get patients in and get the office moving, and then taper out (straight medicaid vs its subsidiaries etc)...maybe take certain Medicaids and not others? is medicaid really detrimental to private practices? obviously certain services won't make sense (surgery, orthotics etc) but I would imagine u can get something at least from office visits or nail procedures....

I currently take all insurances including medicaid. Most of my medicaid patients come in for straight forward pathologies like ingrown nail, heel pain etc so I see them once or twice for treatment and discharge. If a medicaid patient has a big wound that will take several months or a year to heal, I refer to the wound care center, I do the same even with private insurance. Or medicaid patient comes in with chronic nerve pain or neuropathy, I tell them at the first visit I don't treat nerve pain and I send them to neurology. In PP, you have to learn how to tell within the first visit if you can help them or not with the resources you have. We are no longer in residency with endless time, resources and supplies. It's amazing when folks try to do a full workup, order blood test, EMG study, NCV study etc for a patient with chronic nerve pain. I simply send to neurology and I go on with my day. Or patients with chronic leg swelling, I simply send to vein clinic. Helps reduce burnout.

When you meet PCPs for marketing and referrals, they always ask if you take medicaid. Everyone knows medicaid sucks however you want to be a team player in the community. It's a team effort to care for medicaid patients. You want your PCPs to send you all patients (medicare, medicaid and private). You can't cherry pick and tell them to only send you BCBS.

You obviously don't want to fill up your clinic schedule with only medicaid just like you don't want to fill up your schedule with nail care so keep an eye out for that. I have mentioned in my previous posts that I want my practice to be a revolving door. About half of my patients in a typical day are new patients with acute pathologies and half is follow-ups. I like to keep my schedule open and available to get new patients in the same week.

 

[619]

As far as "call center" goes, I know phones won't be ringing off the charts. but the agency I looked into charges by minutes used...eg : 100 minutes, x amount of dollars, 200 minutes used Y amount of dollars.....I only considered this in the event that I do not have a staff member ready by the time I open....I haven't actually started looking for staff since I'm still researching actually opening the office (found a few office sites that ill check out etc)

I understand. However you need one staff member to start in my opinion. Who will do your check-in and check-out? Folks here called me crazy for not having an MA (Started with one and currently have 2 staffs upfront and hiring a 3rd soon) so I wonder how you will do it with zero staff starting out.

 

[GreenHousePub]

.is it worth opening the doors to medicaid initially to get patients in and get the office moving, and then taper out

Yes. You are in no position starting out to limit your patient base, even if they are only paying 12 bucks a visit. Get started and get people flowing, and then hire an associate for 80k a year to see all the medicaid patients (50 per day, 30% bonus after 1.3 million collections).

 

[heybrother]

A few thoughts on Medicaid

-Its much easier to accept it when you aren't the only person in town who accepts it.

-Where I am - none of the ASCs accept it. So - will you get credentialed/privs at hospitals that accept it so you can offer surgery.

-Medicaid fee schedules are highly variable state to state. A friend of mine wondered if issues they were having with collections were due to Medicaid. Their Medicaid rates were routinely better than many of my commercial rates. The generosity of the rates in your statement may make it easier or harder to handle.

-Medicaid can have its own weird state by state issues. I'm not credentialed with Medicaid. A few months ago this young lady comes in. She's employed by a local hospital that has an awesome insurance. I send a prescription in for Meloxicam 7.5 mg. I get a denial from Medicaid indicating that Meloxicam requires prior authorization. I call her trying to figure out what happened - turned out she was on Medicaid having a baby and the hospital had hired her a few months ago. She saw me with insurance but submitted the prescription with Medicaid. Meloxicam is generic and costs a few bucks. I don't know about you, but I don't have the time or the staff to do prior authorizations for Meloxicam. I don't know if this is a one off or just something weird. Maybe you have to memorize the Medicaid formulary and its limited or something like that. That said, you may have issues that you would never suspect.

-There are weird horror stories on old PM News on what happens when Medicaid gets mixed with Medicare Advantage plans. The patient has a $40 copay from the MA play but Medicaid means you can't collect it and then Medicaid never pays the $40 so you get reimbursed like $10 bucks for a 99213. Maybe its real, maybe it isn't.

-No shows.

-A lot of problems in podiatry can be resolved with a shoe and/or a prefab orthotic. Have a plan for dealing with patients who are so limited in their financial options that they can't implement anything at all (the plan might be - I'm sorry, I don't have anything else for you). A 300lbs person shows up with plantar fasciitis in flip flops. You complete a prior authorization so you can prescribe meloxicam (!) and give 2 shots with no improvement. None of the physical therapists accept Medicaid. You go to the local shoe store and write down the names of the cheapest Asics, Brooks, and New Balance. The patient still won't buy it. You find a pair of $30 Spencos online. Still no. What's next.

-Recognize that podiatrists all practice very differently. So when someone says they accept Medicaid - they may be practicing in a manner that is very different than you. You might think - we've established this person is a high risk diabetic. I will see them in 61 days - 3 months. Another person might say - this patient will just call me when they need to come back.

-Its a lot easier to tolerate lower reimbursing insurance when higher reimbursing insurance is more prevalent. If every Medicare advantage plan in your area pays 75-85% of Medicare and your Cigna, Aetna, and United are all also sub-Medicare you are going to be searching for change in your sofa.

 

[Feli]

A few thoughts on Medicaid...

-Where I am - none of the ASCs accept it. So - will you get credentialed/privs at hospitals that accept it so you can offer surgery...

I always thought the facilities had to take MCA to take MCR assignment. Maybe that's just full blown hospitals... or maybe they can cherry pick, like doc offices can.

...as for the OP, yeah, take MCA to start. MCR and MCA are quick to enroll and can be quick to pay after the visits - although they pay avg and low, respectively. You need the patients early on and you have the time and the appts. As you go on (or if you bought a busy practice), dwindle or drop MCA... or hire associates. Some DPMs in PP also keep it but severely limit appts ("first Wednesday morning of each month" or something).

Some ppl who start solo see a ton of MCA early, others less. It depends on the area and if you have hospital or WC center to push the truly problematic ones on. Some keep MCA long term, others don't. It gets very tough to have ppl thinking everything from diagnostics to DME to visits to procedures should be "free." I think it's ironic that a lot of MCA pts think they have "good insurance" and are up in arms when a test or med is denied or has a copay.

Like any business, you want fewer deals/clients and more $$$ per. From realtors to attorneys to contractors to docs, it's all the same. The ones selling or fixing five $5M houses or court cases will make a lot more than a colleague trying to hustle 25 jobs each worth $200k in the same time span. But you can bet anything that there will be significantly stronger competition from peers on the more lucrative and enjoyable work.

Personally, I do a bit of everything. I do some MCA wound care and some BCBS ankle fx or recon... and everything in-between. That said, I'd be crazy to go out of my way to thank and market to PCPs who send me almost exclusively MCA needing surgery or stream RFC pts to my office. I will take that time to thank and cement other referral lines that feed private insurance pts with ingrown or heel pain or interesting path. The MCA stuff is fine in the payer mix, but it's not the low hanging fruit... it is the fruit on the ground in various stages of decay. Anyone can do the outpt or inpatient RFC, wound wizard cases, low/no pay call or refers. It will always be there. You can survive on that, but after residency, most DPMs ideally want to garner and grow the stuff that pays well and/or you enjoy.

 

[Feli]

As far as "call center" goes, I know phones won't be ringing off the charts. but the agency I looked into charges by minutes used...eg : 100 minutes, x amount of dollars, 200 minutes used Y amount of dollars.....I only considered this in the event that I do not have a staff member ready by the time I open....I haven't actually started looking for staff since I'm still researching actually opening the office (found a few office sites that ill check out etc)...

A lot to unpack from your post but I will just chime in on this. Starting out with only seeing 3-5 patients a day, you only need one staff upfront and you grow from there. Looking into a call center? you are assuming your office phone will be ringing every second? No it will not.
You need one quality and reliable staff upfront that can do check-in, check-out, answer phone calls etc. You don't need an army of staff when starting out....
...you need one staff member to start in my opinion. Who will do your check-in and check-out?

I would agree that one check-in and front staff is the bare minimum. And they'll have to be ultra-reliable (hint: screen well and then overpay them), or you can lose thousands of dollars in revenue in a single day if you miss some new pt appt calls, can't check people in since you're in back seeing another, miss calls from an area PCP, etc.

There is no getting around that one front desk (unless YOU want to answer phones all day, make schedule, confirm appts, help grandma fill out her new patient papers, check voicemails, give directions to your office on the phone, etc?). As was said, your time is much better spent out marketing and networking. The patients are happy to see a smiling face at the desk when they arrive and have a sense of familiarity since that's who they made or confirmed the appt with... like when you walk into a party and see a few ppl you like. If you don't have the volume, have them room patients and clean rooms also... and do all the back of the house (MA) stuff yourself until you can market and have more work for them. I know some guys 10 or even 20 yrs into practice who still do that bare minimalist approach... but one good staff is the absolute minimum.

Call center is more of an adjunct to the staff in your office. It can't be a stand-alone substitute. The group I work with uses a large call center (staffs it themself)... and that's because they have many offices and docs. Other groups use the shared answer service that may or may not make/change appts or might basically just be a human voicemail that can call the doc. Big groups still need the phones answered when calls come in clusters, office staff are out to lunch, office staff are dealing with a new pt, offices are closed or late/early/fails to show up, etc etc.

The call center idea is fine and good for making/changing/cancel/move appts, but they will create as many problems as they solve... they will simply call the local office with anything they're unsure of (can you add a pt today? pt is running late is that ok or needs re-sched? med refill? question from another provider office, pt needs directions, etc). If they do scheduling (most per-minute call centers that do many specialties won't or can't even access your EMR), you will also see the remote call center (sometimes another office in same group) grapple with local staff for control of the schedule... and they will blame each other for anything that goes wrong (overbooking, pt not reminded of appt, pt not told to arrive early for XR, etc). Patients will quickly learn to work around the call center and speak to the local office if they can. The call center is a fine and helpful adjunct - but it can't be the only thing you have. GL

 

[podgod22]

I understand. However you need one staff member to start in my opinion. Who will do your check-in and check-out? Folks here called me crazy for not having an MA (Started with one and currently have 2 staffs upfront and hiring a 3rd soon) so I wonder how you will do it with zero staff starting out.

what's it like in todays world trying to find and lockdown some of these staff members? that would be one of my concerns going. out and doing this....

 

[podgod22]

A few thoughts on Medicaid

-Its much easier to accept it when you aren't the only person in town who accepts it.

-Where I am - none of the ASCs accept it. So - will you get credentialed/privs at hospitals that accept it so you can offer surgery.

-Medicaid fee schedules are highly variable state to state. A friend of mine wondered if issues they were having with collections were due to Medicaid. Their Medicaid rates were routinely better than many of my commercial rates. The generosity of the rates in your statement may make it easier or harder to handle.

-Medicaid can have its own weird state by state issues. I'm not credentialed with Medicaid. A few months ago this young lady comes in. She's employed by a local hospital that has an awesome insurance. I send a prescription in for Meloxicam 7.5 mg. I get a denial from Medicaid indicating that Meloxicam requires prior authorization. I call her trying to figure out what happened - turned out she was on Medicaid having a baby and the hospital had hired her a few months ago. She saw me with insurance but submitted the prescription with Medicaid. Meloxicam is generic and costs a few bucks. I don't know about you, but I don't have the time or the staff to do prior authorizations for Meloxicam. I don't know if this is a one off or just something weird. Maybe you have to memorize the Medicaid formulary and its limited or something like that. That said, you may have issues that you would never suspect.

-There are weird horror stories on old PM News on what happens when Medicaid gets mixed with Medicare Advantage plans. The patient has a $40 copay from the MA play but Medicaid means you can't collect it and then Medicaid never pays the $40 so you get reimbursed like $10 bucks for a 99213. Maybe its real, maybe it isn't.

-No shows.

-A lot of problems in podiatry can be resolved with a shoe and/or a prefab orthotic. Have a plan for dealing with patients who are so limited in their financial options that they can't implement anything at all (the plan might be - I'm sorry, I don't have anything else for you). A 300lbs person shows up with plantar fasciitis in flip flops. You complete a prior authorization so you can prescribe meloxicam (!) and give 2 shots with no improvement. None of the physical therapists accept Medicaid. You go to the local shoe store and write down the names of the cheapest Asics, Brooks, and New Balance. The patient still won't buy it. You find a pair of $30 Spencos online. Still no. What's next.

-Recognize that podiatrists all practice very differently. So when someone says they accept Medicaid - they may be practicing in a manner that is very different than you. You might think - we've established this person is a high risk diabetic. I will see them in 61 days - 3 months. Another person might say - this patient will just call me when they need to come back.

-Its a lot easier to tolerate lower reimbursing insurance when higher reimbursing insurance is more prevalent. If every Medicare advantage plan in your area pays 75-85% of Medicare and your Cigna, Aetna, and United are all also sub-Medicare you are going to be searching for change in your sofa.

What exactly is a medicare advantage plan? We see those in the office currently but whenever I ask about it I'm told to "not worry about it" ...I get if its bundled with medicaid , medicaid doesn't allow you to collect the money, nor bil the patient for services not covered///

btw @heybrother, this post is great ..very insightful! thank you for the breadth of knowledge!

 

[podgod22]

I always thought the facilities had to take MCA to take MCR assignment. Maybe that's just full blown hospitals... or maybe they can cherry pick, like doc offices can.

...as for the OP, yeah, take MCA to start. MCR and MCA are quick to enroll and can be quick to pay after the visits - although they pay avg and low, respectively. You need the patients early on and you have the time and the appts. As you go on (or if you bought a busy practice), dwindle or drop MCA... or hire associates. Some DPMs in PP also keep it but severely limit appts ("first Wednesday morning of each month" or something).

Some ppl who start solo see a ton of MCA early, others less. It depends on the area and if you have hospital or WC center to push the truly problematic ones on. Some keep MCA long term, others don't. It gets very tough to have ppl thinking everything from diagnostics to DME to visits to procedures should be "free." I think it's ironic that a lot of MCA pts think they have "good insurance" and are up in arms when a test or med is denied or has a copay.

Like any business, you want fewer deals/clients and more $$$ per. From realtors to attorneys to contractors to docs, it's all the same. The ones selling or fixing five $5M houses or court cases will make a lot more than a colleague trying to hustle 25 jobs each worth $200k in the same time span. But you can bet anything that there will be significantly stronger competition from peers on the more lucrative and enjoyable work.

Personally, I do a bit of everything. I do some MCA wound care and some BCBS ankle fx or recon... and everything in-between. That said, I'd be crazy to go out of my way to thank and market to PCPs who send me almost exclusively MCA needing surgery or stream RFC pts to my office. I will take that time to thank and cement other referral lines that feed private insurance pts with ingrown or heel pain or interesting path. The MCA stuff is fine in the payer mix, but it's not the low hanging fruit... it is the fruit on the ground in various stages of decay. Anyone can do the outpt or inpatient RFC, wound wizard cases, low/no pay call or refers. It will always be there. You can survive on that, but after residency, most DPMs ideally want to garner and grow the stuff that pays well and/or you enjoy.

I thought about getting started with medicaid, then tapering down and eventually closing it out...but then rethinking that, the PCP's who would have been sending me these patients might just get pissed that all of a sudden that one office they counted on isn't available....now what?

 

[heybrother]

What exactly is a medicare advantage plan? We see those in the office currently but whenever I ask about it I'm told to "not worry about it" ...I get if its bundled with medicaid , medicaid doesn't allow you to collect the money, nor bil the patient for services not covered///

btw @heybrother, this post is great ..very insightful! thank you for the breadth of knowledge!

I'm not credentialed with Medicaid so I can't truly report on intermingling of Medicaid/MA plans.

That said, a Medicare advantage plan is essentially a commercialized form of Medicare. With historic Medicare a patient pays for their Medicare part B premium, a yearly deductible of like $200ish and then likely a supplement to cover the 20% that is uncovered by Medicare. Medicare Advantage Plans have too many forms to discuss but essentially United, Humana, Aetna, Cigna etc serve as the patient's insurer rather than Medicare.

-You are much more likely to face weird authorization issues
-Patient may owe a copay for visits (with Medicare they would simply pay up to the deductible and be done other than the 20%)
-If you are hospital based it is much harder to place these patients / just weird issues with getting needed care / higher potential expenses for the patient with hospitalization
-And most important - they won't pay private practice doctors 100% of Medicare in a lot of cases. Its regional / variable etc. My practice was receiving 65% of Medicare from Humana. Another poster on here described for me receiving 104% of Medicare.

 

[icebreaker32]

I thought about getting started with medicaid, then tapering down and eventually closing it out...but then rethinking that, the PCP's who would have been sending me these patients might just get pissed that all of a sudden that one office they counted on isn't available....now what?
Most do exactly what you said and stop taking after board certified or severely limit.

There will be very few PCPs referring those patients who are in private practice...they will typically be hospital employees or employed at a FQHC etc where their compensation does not depend on insurance mix. If you are in an area that has a low percentage and the other established doctors still take it you might be OK, but this is rarely the case.

Doctors stop taking certain insurance plans all the time. Many established specialists even stop taking BCBS HMO and only take regular BCBS, so don't beat yourself up if you decide to take it in the beginning then severely limit or stop a couple years later.

 

[heybrother]

Doctors stop taking certain insurance plans all the time. Many established specialists even stop taking BCBS HMO and only take regular BCBS, so don't beat yourself up if you decide to take it in the beginning then severely limit or stop a couple years later.

I want to briefly touch on the comment about BCBS. Wherever you are in private practice - you are always well served to know your local fee schedules. In my area there are 3 BCBS overall fee schedules and 2 BCBS plans that identify as HMO. It took me a bit of work to figure all this out - I actually look at people's insurance cards now since we scan them into Athena. One is a market place plan. One is the BCBS HMO that essentially all of the public school teachers carry. The teacher plan pays identical to BCBS traditional which pays a couple of percentage points less than BCBS PPO/Federal. If the only insurance I took care of was the teacher plan - I'd do fine. The heart of this post is simply - insurance plans can be difficult to parse/figure out. I was ultimately able to use Availity to sort out my plans but it was still wrong for some of its values. Not all BCBS HMO plans are bad.

 

[sloh]

I'm not credentialed with Medicaid so I can't truly report on intermingling of Medicaid/MA plans.

That said, a Medicare advantage plan is essentially a commercialized form of Medicare. With historic Medicare a patient pays for their Medicare part B premium, a yearly deductible of like $200ish and then likely a supplement to cover the 20% that is uncovered by Medicare. Medicare Advantage Plans have too many forms to discuss but essentially United, Humana, Aetna, Cigna etc serve as the patient's insurer rather than Medicare.

-You are much more likely to face weird authorization issues
-Patient may owe a copay for visits (with Medicare they would simply pay up to the deductible and be done other than the 20%)
-If you are hospital based it is much harder to place these patients / just weird issues with getting needed care / higher potential expenses for the patient with hospitalization
-And most important - they won't pay private practice doctors 100% of Medicare in a lot of cases. Its regional / variable etc. My practice was receiving 65% of Medicare from Humana. Another poster on here described for me receiving 104% of Medicare.

This is an awesome post on medicare advantage plans. I'm a 1099 physician and many physicians have no idea how medicare advantage plans work. "Advantage" is a misnomer

 

[icebreaker32]

This is an awesome post on medicare advantage plans. I'm a 1099 physician and many physicians have no idea how medicare advantage plans work. "Advantage" is a misnomer

Lots more denials, requests for charts also with Medicate advantage planes in general in addition to rates that are usually below Medicare. In addition sometimes they blatantly don't follow Medicare guidelines and appealing can be a long and time consuming process that is not always successful. Weird rules on DME and prior authorizations.

They are unfortunately becoming more common.

 

[podgod22]

So I've been doing a ton of research on this. As I'm pretty set on this startup being my goal. But I think I'm going to need help.

I asked around and talked some people who recommended maybe a "consultant" that can guide you with this stuff. I looked up a few and there's one that I found that's basically podiatry spefific. The firm states they help with all aspects of a practice start up.

Anyone on here have any experience using a consultant like this? The services offered seem good, but id like to hear from some of you seasoned docs on here. ..

 

[619]

So I've been doing a ton of research on this. As I'm pretty set on this startup being my goal. But I think I'm going to need help.

I asked around and talked some people who recommended maybe a "consultant" that can guide you with this stuff. I looked up a few and there's one that I found that's basically podiatry spefific. The firm states they help with all aspects of a practice start up.

Anyone on here have any experience using a consultant like this? The services offered seem good, but id like to hear from some of you seasoned docs on here. ..

You mentioned you have been an associate for several years now which is very good. I wonder why you need a consultant?

Do you need the consultant to help find you an office location? ... Find a commercial realtor to find you an office location.
Do you need the consultant to help get you on insurance plans? ... Find an insurance credentialer with experience in your state or area
Do you need the consultant to find you an EHR? .... You can call different EHR reps and inquire and get free quotes
Do you need the consultant to set up your website? .. You can find someone to build you a website. Google my business page is also FREE
Do you need the consultant to create your business Logo? ... You can go on Fiverr.com and get someone from India to make you a logo for 5 bucks
Do you need the consultant to find you office and practice supplies? ... You can set up an account with Mckesson, Medline etc by yourself
Do you need the consultant to get you malpractice insurance, general liability insurance etc? ... You can get an insurance broker and get quotes for free
Do you need the consultant to interview and hire staff for you? .... You can post a job on indeed or zip recruiter and get candidates yourself
Do you need the consultant to help you treat patients? ... You are the doctor



Do you need the consultant to hold your hand, direct you, lead you and tell you what to do? Well yes you need a consultant but ask yourself if you are ready to be your own Boss.

 

[air bud]

You mentioned you have been an associate for several years now which is very good. I wonder why you need a consultant?

Do you need the consultant to help find you an office location? ... Find a commercial realtor to find you an office location.
Do you need the consultant to help get you on insurance plans? ... Find an insurance credentialer with experience in your state or area
Do you need the consultant to find you an EHR? .... You can call different EHR reps and inquire and get free quotes
Do you need the consultant to set up your website? .. You can find someone to build you a website. Google my business page is also FREE
Do you need the consultant to create your business Logo? ... You can go on Fiverr.com and get someone from India to make you a logo for 5 bucks
Do you need the consultant to find you office and practice supplies? ... You can set up an account with Mckesson, Medline etc by yourself
Do you need the consultant to get you malpractice insurance, general liability insurance etc? ... You can get an insurance broker and get quotes for free
Do you need the consultant to interview and hire staff for you? .... You can post a job on indeed or zip recruiter and get candidates yourself
Do you need the consultant to help you treat patients? ... You are the doctor



Do you need the consultant to hold your hand, direct you, lead you and tell you what to do? Well yes you need a consultant but ask yourself if you are ready to be your own Boss.

Excellent

 

[Boba Foot]

Do you need the consultant to help get you on insurance plans? ... Find an insurance credentialer with experience in your state or area
Do you need the consultant to find you an EHR? .... You can call different EHR reps and inquire and get free quotes
Do you need the consultant to set up your website? .. You can find someone to build you a website. Google my business page is also FREE
Do you need the consultant to create your business Logo? ... You can go on Fiverr.com and get someone from India to make you a logo for 5 bucks
Do you need the consultant to find you office and practice supplies? ... You can set up an account with Mckesson, Medline etc by yourself
Do you need the consultant to get you malpractice insurance, general liability insurance etc? ... You can get an insurance broker and get quotes for free
Do you need the consultant to interview and hire staff for you? .... You can post a job on indeed or zip recruiter and get candidates yourself
Do you need the consultant to help you treat patients? ... You are the doctor

Gawd damn 🤌🏼

 

[podgod22]

You mentioned you have been an associate for several years now which is very good. I wonder why you need a consultant?

Do you need the consultant to help find you an office location? ... Find a commercial realtor to find you an office location.
Do you need the consultant to help get you on insurance plans? ... Find an insurance credentialer with experience in your state or area
Do you need the consultant to find you an EHR? .... You can call different EHR reps and inquire and get free quotes
Do you need the consultant to set up your website? .. You can find someone to build you a website. Google my business page is also FREE
Do you need the consultant to create your business Logo? ... You can go on Fiverr.com and get someone from India to make you a logo for 5 bucks
Do you need the consultant to find you office and practice supplies? ... You can set up an account with Mckesson, Medline etc by yourself
Do you need the consultant to get you malpractice insurance, general liability insurance etc? ... You can get an insurance broker and get quotes for free
Do you need the consultant to interview and hire staff for you? .... You can post a job on indeed or zip recruiter and get candidates yourself
Do you need the consultant to help you treat patients? ... You are the doctor



Do you need the consultant to hold your hand, direct you, lead you and tell you what to do? Well yes you need a consultant but ask yourself if you are ready to be your own Boss.

Great info here!

Yes I've been and am an associate. But a lot of the backend stuff is just that at my practice...on the backend!

The doc I work with tells me stuff that he thinks is helpful and it is, but all of the day to day practice managing...is kept private. Even when I ask about insurances/deductables etc, I'm told to "not worry" about that...its almost like the info is shielded so I don't practice for money rather than for practicing for medicine, which I get, but at some point I need to learn to.

As far as the consultant, I was thinking more so to guide me when the practice is up and running

So I've come across a couple of good opportunities...at least I think they are good. I'll try to shed some light on both on here:

The first is a well established practice. Its a big but not popular city. It has a pretty substantial population. There's maybe 6 or so podiatrists .
Current owner is an older physician. Looking for an out in the next year. Solo practice, modern, but shows signs of the times (eg lack of web presence, EMR, etc). But its established so it's pretty busy.

For a solo older doc, I think the collections are decent, however, the asking price is about 150k ABOVE what the average gross collections are. Doesn't take a genius to tell me this is significantly overpriced.

How would one handle this situation? I don't want to obvious low-ball anything. I've heard at a conference that podiatry practices these days go for 25-30% of the gross collections. Not sure how true it is, but looking for some advice from the pros on here. If I were to make an offer, I would want it to be sound mathematically and I would want to be able to back up the number with evidence. I have received some documents with numbers dating back several years. Seems kinda short tho and Im not sure what else I should be analyzing.

Part 2 of this story is the possibility of just going out and starting from scratch, probably somewhere in the nearby geographic area. I want to keep it as lean as possible to start with my only MAJOR expenses being rent and x-ray. A quick tabulation of inventory shows me that this MAY be possible for roughly 130k (this includes other services like malpractice, call center usage, EMR, chairs and other supplies and isn't just limited to X-ray and rent). Trying to get a rough idea from the self starters on here on what their takes are.

So I've come across a couple of good opportunities...at least I think they are good. I'll try to shed some light on both on here:

The first is a well established practice. Its a big but not popular city. It has a pretty substantial population. There's maybe 6 or so podiatrists .
Current owner is an older physician. Looking for an out in the next year. Solo practice, modern, but shows signs of the times (eg lack of web presence, EMR, etc). But its established so it's pretty busy.

So to build a little on this practice for sale...seems like the owner is willing to negotiate ...

what type of stuff should I be looking for to properly eval his practice? He has stated quick books, lease info etc is all open and available should I want it..

currently the only docs I have are the practice valuation numbers that were run...should I be asking to see things like patient panel size etc?

 

[619]

So to build a little on this practice for sale...seems like the owner is willing to negotiate ...

what type of stuff should I be looking for to properly eval his practice? He has stated quick books, lease info etc is all open and available should I want it..

currently the only docs I have are the practice valuation numbers that were run...should I be asking to see things like patient panel size etc?

Lease info, hard asset valuation etc are all good questions. I will also contact local SBA (or Small Business Development Center) in your location to get someone to help you look at the books and financials.

For patient size, I will say to look at the area in general, is it a growing area, how many other docs are there and how far booked out are they. You can call other pod offices as a patient and see how soon they can get you in. Also how many new patients does the practice see on average a day or a week. How often do PCP send in new referral. I personally do not care about current patients which are mostly nail are. I am more concerned about getting new patients in.

It's funny when you see old practices for sale and they brag about how many medicare/medicaid nail patients they see daily. If you buy a nail mill, first thing to do is get rid of all the nail patients. Nails do nothing but clog up your schedule, take staff time and bring very little reimbursement. You can build an MSK practice with 1-2 staffs and get a higher return

 

[619]

If for some reason you do purchase the practice, please arrange the sale so you are basically buying his goodwill but NOT his patients. Of course you are taking over his practice and he will have to sign a non compete, etc. But by you not “buying” his charts, every patient is a new patient and you will have no liability on his past treatments.

I’m not recommending this just to allow you to bill each patient as a new patient, it’s for legal reasons.

You don’t want to be the guardian of his old medical records because if there is a legal case you will be dragged in and will have to produce records, etc. You will eventually be dropped from the case but it will take time and money.

This is also good advise. You can take over the lease, office space, buy his phone line, fax line, and buy his hard assets (X Ray, table, chairs etc) but the rest you have to start from scratch. New name of practice, new website, new LLC, new business account, new Tax ID, new group NPI, get on insurance plans for the new practice etc. So every patient that works through the door on day one is a new patient. They fill out new patient paper work etc.

Same office space, office building but new practice.

 

[thefootfixer]

Lease info, hard asset valuation etc are all good questions. I will also contact local SBA (or Small Business Development Center) in your location to get someone to help you look at the books and financials.

For patient size, I will say to look at the area in general, is it a growing area, how many other docs are there and how far booked out are they. You can call other pod offices as a patient and see how soon they can get you in. Also how many new patients does the practice see on average a day or a week. How often do PCP send in new referral. I personally do not care about current patients which are mostly nail are. I am more concerned about getting new patients in.

It's funny when you see old practices for sale and they brag about how many medicare/medicaid nail patients they see daily. If you buy a nail mill, first thing to do is get rid of all the nail patients. Nails do nothing but clog up your schedule, take staff time and bring very little reimbursement. You can build an MSK practice with 1-2 staffs and get a higher return

Would evaluating the revenue per patient be helpful here?

I’m looking into a buyout as well. But I’m not sure how to gauge those numbers. I’ve been searching for a good place maybe a year or so now so I’ll share a few pearls I thought were helpful.

I’ve talked to a few people and they’ve made some very valid concerns about buying a old practice. A few examples include :

1. if the old doc was just cutting nails and billing office visits like clockwork. U either buy into that and keep it moving (revenue wise) or u do things the correct way per CMS guidelines but now risk pissing off patients and now those collections u were happy to get are actually much much less since these angry patients will complain the old doc did it that way. High chance they’ll leave .

2. Being grandfathered into insurance rates. If docs have been on panals for years they could potentially be getting a better rate than you. This rate is factored into the collections u see. Now you go in and buy said practice and have to set up your own entity. You have 2 options . Option 1 is you ride on his coattails and get the same rate. Caveat to that is that this sale is now an assets type sale when u accept ALL liability which is risky. Option 2 is you buy the hard assests and take on NO liability. Caveat to this is now this is a new entity and you need to get on panals yourself. Which they could reimburse u LOWER and/or they may be closed. So it’s a tricky situation.

Hopefully that helps. Maybe someone more important can validate and share.

I almost thing it’s better starting off cold in a good area. Work on your own pace and create your own environment. Supplement you income with a part time gig somewhere or NH while the practice grows .

 

[619]

Would evaluating the revenue per patient be helpful here?

I’m looking into a buyout as well. But I’m not sure how to gauge those numbers. I’ve been searching for a good place maybe a year or so now so I’ll share a few pearls I thought were helpful.

I’ve talked to a few people and they’ve made some very valid concerns about buying a old practice. A few examples include :

1. if the old doc was just cutting nails and billing office visits like clockwork. U either buy into that and keep it moving (revenue wise) or u do things the correct way per CMS guidelines but now risk pissing off patients and now those collections u were happy to get are actually much much less since these angry patients will complain the old doc did it that way. High chance they’ll leave .

2. Being grandfathered into insurance rates. If docs have been on panals for years they could potentially be getting a better rate than you. This rate is factored into the collections u see. Now you go in and buy said practice and have to set up your own entity. You have 2 options . Option 1 is you ride on his coattails and get the same rate. Caveat to that is that this sale is now an assets type sale when u accept ALL liability which is risky. Option 2 is you buy the hard assests and take on NO liability. Caveat to this is now this is a new entity and you need to get on panals yourself. Which they could reimburse u LOWER and/or they may be closed. So it’s a tricky situation.

Hopefully that helps. Maybe someone more important can validate and share.

I almost thing it’s better starting off cold in a good area. Work on your own pace and create your own environment. Supplement you income with a part time gig somewhere or NH while the practice grows .

Replying to your #1 example - then the revenue per patient calculation will not be helpful except if you want to run the same nail mill. For me personally, you want all those nail patients to leave so you can build an MSK practice with various pathologies and office procedures. The blood of a practice is new patients coming in constantly. I don't see why folks hold on to old/recurring patients like a primary care clinic. Specialists office is run differently.

For #2 example - Yes you may not get a high rate as the old doc but after you are established then you can join an IPA in your area and get better reimbursement. However if panels in your area is closed then it's a different story and you may have to be forced to ride the coattails of the old doc and accept all liabilities etc.

And finally, I believe your revenue will go up after getting rid of most of the nail patients and you build an MSK practice with diverse pathologies. You need to see the reimbursement for nails and I wonder why folks spend time on nails.

 

[thefootfixer]

Replying to your #1 example - then the revenue per patient calculation will not be helpful except if you want to run the same nail mill. For me personally, you want all those nail patients to leave so you can build an MSK practice with various pathologies and office procedures. The blood of a practice is new patients coming in constantly. I don't see why folks hold on to old/recurring patients like a primary care clinic. Specialists office is run differently.

For #2 example - Yes you may not get a high rate as the old doc but after you are established then you can join an IPA in your area and get better reimbursement. However if panels in your area is closed then it's a different story and you may have to be forced to ride the coattails of the old doc and accept all liabilities etc.

And finally, I believe your revenue will go up after getting rid of most of the nail patients and you build an MSK practice with diverse pathologies. You need to see the reimbursement for nails and I wonder why folks spend time on nails.

I would think it’s to maintain a “steady stream” of revenue. The PF patient you treat today is gone in a few visits whereas the nail patient is there for life.

Again not too sure about the reimbursements because this can vary a bit. Some guys I know just bill office visits for all these people regardless of comorbidites, other guys I know do it correctly with 11721 , 11720 g027 etc.
So the profit from this can vary a bit.

But yes I agree you’d probably want a well versed MSK clinic. The question would be how to get there.

Numericals again could be tricky. If you see a practice and let’s say buyer and seller agree to 250k sales price. But this price takes into account tons of nail patients.
You justify that price by keeping the nail patients. If you clean house all of a sudden you’re under and you overpaid for the practice. At that point you might as well spend 100-150k (high end) to start up your own shop.

 

[619]

I would think it’s to maintain a “steady stream” of revenue. The PF patient you treat today is gone in a few visits whereas the nail patient is there for life.

This is my ideal set up. I want to see new patient with acute pathologies, treat them and get them better after 2-3 visits and discharge. Rinse and repeat. Other practices are booked out for weeks or a month because they fill up their schedules with nail patients for life whereas you will be the one to grab those patients looking for same week appointments. Even if you are not yet in-network, you will be surprised how many patients will be self-pay and pay cash just to be seen by a doctor the same week.

But yes I agree you’d probably want a well versed MSK clinic. The question would be how to get there.

Simple - Have a good ground game and leg work. When was the last time the older pods in your area went out to meet the local PCPs? Meeting PCPs and giving them your card and telling them what you like to see (ingrown nails, heel pain, ankle pain. etc). It is gradual but longer lasting. You want to be the new face in the area and you will be surprised how much your local PCPs will appreciate you for stopping by.
I personally love NPs and PAs, they send me everything!!!! I go to a new practice and I don't even bother asking for the MD/DO. I specifically ask for the NPs and PAs and talk to them. They will never forget you. That's a referral source for LIFE

Also open a google my business page (add your custom website) for free and build your reviews slowly till you get to top 3. This can be done in a few months. once again it's gradual but the effect is longer lasting. These
are FREE things to do.

Numericals again could be tricky. If you see a practice and let’s say buyer and seller agree to 250k sales price. But this price takes into account tons of nail patients.
You justify that price by keeping the nail patients. If you clean house all of a sudden you’re under and you overpaid for the practice. At that point you might as well spend 100-150k (high end) to start up your own shop.

This is what I did after working as an associate for about a year. Opened up shop with about $100 - $150k.

 

[AttackNME]

Great info here!

Yes I've been and am an associate. But a lot of the backend stuff is just that at my practice...on the backend!

The doc I work with tells me stuff that he thinks is helpful and it is, but all of the day to day practice managing...is kept private. Even when I ask about insurances/deductables etc, I'm told to "not worry" about that...its almost like the info is shielded so I don't practice for money rather than for practicing for medicine, which I get, but at some point I need to learn to.

As far as the consultant, I was thinking more so to guide me when the practice is up and running


So to build a little on this practice for sale...seems like the owner is willing to negotiate ...

what type of stuff should I be looking for to properly eval his practice? He has stated quick books, lease info etc is all open and available should I want it..

currently the only docs I have are the practice valuation numbers that were run...should I be asking to see things like patient panel size etc?

Podiatry practice consultants exist? Never heard of them

 

[malleolusman]

Podiatry practice consultants exist? Never heard of them

Cindy Pezza is one of them. Has some decent stuff that is in the form of free webinars. That being said- behind the 8 ball when it comes to discussing and giving advice on hiring associates. No mention of what expectations are from new grads in this day and age given the extensive training and ability to produce.

 

[Boba Foot]

Cindy Pezza is one of them. Has some decent stuff that is in the form of free webinars. That being said- behind the 8 ball when it comes to discussing and giving advice on hiring associates. No mention of what expectations are from new grads in this day and age given the extensive training and ability to produce.

Called her when I was considering opening my own shop. Not as helpful as her website makes her out to be. Basically said, “find money to open up, find a spot to open in and then call me back.” Despite the fact that her website advertises securing financing and finding a lease in a good locale. Kinda came off as she wants to do the easy stuff while you handle the early stuff you know nothing about, and then she’ll send you a bill.