Private Duty Nursing vs. Agency Nursing

[AreaNurse]

As an agency nurse, I'm still working for a middleman that takes more than half my pay because they connect me with clients that need my services. I've worked in various facilities that gave me the toughest assignments while the agency made more than twice my pay by literally sleeping. (I worked midnights!)

Who doesn't love one-on-one nursing? You can't do this working for hospitals or facilities. Our time is spent away from our patients charting properly to avoid being sued.

I work at a sub-acute rehab facility for the largest Catholic Healthcare Organization in Illinois. Besides passing out meds, doing some treatments for 15 plus patient for the majority of my 8 hour shift, I chart and do clerical work mainly to protect a license I've worked hard to earn. All the while I feel this Corporation is taking advantage of me, and they treat me and my nursing coworkers as unprofessional by always threatening 'write-ups.'

And in today's economy, they stress in no uncertain terms how we should be lucky we have jobs. In fact, they take advantage of that and squeeze more out of us for their greedy gain.

And where is nursing management in all this? Aren't they supposed to be our advocate? Instead, the majority of them are clawing their way up the corporate ladder only to be stressed out to make a few extras dollars just to become a higher up pawn in Corporate America's game/gain.

These Corporate giants, even though part of a non-for-profit organization, with their large salaries are laughing all the way to their vacations villas mostly on our hard work!

How would hospitals and facilities function without nurses?

I feel nurses are second only to patients.

Nurses are SO underpaid and unappreciated!

At one point I wasn't familiar with Private Duty Care because the nursing program prepared me to work closely with patients in a professional setting, they did not prepare me for that special kind of one-on-one care. That's when I realized private duty means you should be working with one patient as opposed to fifty and working for an agency doesn't always get you private duty.

However, as a Private Duty Care Provider, minus the Agency, I can be my own boss, work close to home and choose my own schedule. I realize my license must be current and I need a clear understanding of my state's professional practice act.

Having malpractice insurance is optional but very much encouraged and not that expensive when compared to what I'm handing over to the agency every single hour I work. Besides, even though nurses are covered by an agency, hospital or facilities' malpractice insurance, if it came down to us or them in the courtroom, who do you think they're going to protect?

In addition, I know it is my responsibility to pay state and federal income taxes. But wouldn't it be worth it not have to share my hard earned wages with an Agency just by doing a little initial homework upfront?

So, I thought about taking an ad out in the local classifieds as a private duty nurse only to discover this was much too expensive, and I had to question how many people were looking for a private duty nurse via the classifieds.

I soon found that many nurses are asking the same question.

How can we affordably go about getting a private duty job without handing over the majority of our wages with an agency?

[Sam J.]

BTW, you would be a sole proprietor, or an independent contractor, and need a business license from every city you make money in. Talk to a tax person or a lawyer or an accountant to get you set up squarely and legally. Also ask them about any possible consequences to your nursing license, whether working as a caregiver or not, if a client sues you. It happens. This is another reason home health care cost$ what it does.

[NedRN]

I've never heard of any kind of agency (nurse, physician, home health) that works with over a 50% gross profit margin (keeps more than half the bill rate). The current average in the travel nurse industry is 24%. I don't know where you are getting those numbers from, but I assure you that it is an urban myth.

As far as billing independently, no one can restrict you from that. If you are trying to collect from insurance agencies, or Medicare/Medicaid, you will have to meet their requirements which can be onerous for a one person agency. For private cash services, you are good to go.

By the way, you don't want to cut out the middleman, you want to be the middleman! Ideally, you set up an agency that looks like any other agency. No one has to know that there is just one employee.

When it comes to providing actual service, you may provide any service that doesn't require a physician's (or therapist's) orders or direct oversight by a higher licensed provider like an RN. You can also provide services under your license that does require a physician's (or therapist's) orders, just make sure the client has legitimate orders.

[Sam J.]

[quote=NedRN;7731955

By the way, you don't want to cut out the middleman, you want to be the middleman! Ideally, you set up an agency that looks like any other agency. No one has to know that there is just one employee.

Great advice. It might even add a measure of credibility.

[NedRN]

It is the life I've been living since 2004! No one has ever asked how many travelers I have.

[Sam J.]

Love it! Nobody has ever asked me how many of me there are, either. But now I'll have to think up a witty answer, should that question ever present itself?

[denicu]

I did per diem agency work after I left my staff position-this was early 2000. I did very well for the first few yrs. I could work my hours between different hospitals and it was fine by the agency, they would pick up the OT tab. But overtime the agency started cutting back-you were only allowed to do your time at 1 hospital, lots of advanced scheduling request by the hospital only to be cancelled. Out of 3-4 scheduled shifts I would actually only work 1 or 2 days and sometimes none at all. I have also driven to the hospital which is about 60-80 miles from my home only to be told that "we forgot to cancel you but you will get 2 hrs inconvenience pay" I would have preferred to stay in my bed and not have to waste gas and paying tolls for 2 hrs pay. One hospital was notorious for cancelling shifts and after awhile the agency could not get any of the nurses to sign up for shifts. Eventually, they came to an agreement to have guaranteed shifts and that worked out much better both for nurses and the staffing hospital.

[caliotter3]

My last private duty client had her CPA do my paychecks. He took out all of the taxes, etc. that would have been taken out by an agency employer. The employment fit the criteria set by the IRS for employ versus independent contractor, so I never worried about it at that particular time. Personally, don't care to deal with the issues of going the independent contractor route.

[Sam J.]

The IC thing has often been the target of IRS reviews, and may even become a thing of the past, in the future. Many people that present themselves as IC don't pay all the taxes they are required to pay- income, disability, unemployment, Medicare, etc. This is the basis for the IRS scurtiny. Lots of agencies also make their staff sign 'agreements' that they are not 'employees' of the agency- but that's not the way it works, and many of those are thrown out by the IRS. Anyone considering the IC route needs a lawyer or tax man or accountant to clarify the IC thing- it's a lot easier to pay taxes on schedule, then to be hit with a huge tax bill from the IRS, later.

[caliotter3]

The IRS even published a pamphlet on the subject some time back where they explicitly warned the employee that in most cases they are an employee, not an independent contractor, despite claims by the employer; the pamphlet listed the reasons why. It was a good basic explanation of the distinction between the two.

[Sam J.]

Another risk that most people aren't aware of (I'm only familiar with CA, on this)- if you 'work' as an IC through an agency, and the client doesn't pay the agency for your work, the agency does 'not' have to pay you. Another reason to tred lightly. If you do sign on as an IC with an agency, read the fine print of the reams of documents they ask you to sign- it might give you second thoughts.

[NedRN]

Properly set up, none of those agency 1099 employees are "thrown out" by the IRS. Some of these agencies have been operating for decades. We all know why withholding taxes were instituted in that there is a human tendency to cheat otherwise and tax collections suffer. And of course the IRS favors employee status and withholding.

But there is no reason to preach fear. There are millions of such Americans whose pay is not subject to withholding, from restaurant staff, to every kind of contractor such as HVAC and carpenters, to physicians and lawyers. And yes, nurses, including this one. I did not hire a lawyer or an accountant to clarify IC status, help me incorporate, or do my tax returns. I'd bet quite a bit that most small one person businesses don't either - IC is not so obscure that you need to spend thousands of dollars in consults, there are literally millions of ICs.

[Sam J.]

I'm hardly spreading fear. I'm throwing out things for people to consider. The not being paid thing has happened to me, myself, three times- this is where I got my information. As far as other occupations I wouldn't know, the topic here is about nurses that want to go it alone. Not only does it 'not' cost thousands of dollars in consults to talk to a professional for guidance, to avoid these pitfalls- it's never good advice for anyone starting a business to believe they know all there is to know. Spending a little money on professional advice will always more than pay for itself, in one way or another.

On other note, I know several IC nurses (and caregivers) that report (and pay taxes) on only a fraction of what they really earn. They think they are somehow coming out ahead, even while risking civil and even criminal penalties once they get caught. They also can't seem to undertstand that by not claiming all of their income, and paying taxes, they are shortchanging their own SS retirement accounts, and the benefits they will ultimately be entitled to.

As far as recouping pay if an agency doesn't pay you- yes, some states have a process to allow a claim to be made with the state labor department, or other agency. Good luck with that.