NPs/PAs: How do you split overhead costs with MD?

core0 · Feb 15, 2009

hey all,
i think i pay a ridiculous amount of overhead costs for our cardiology practice... i am expected to pay half a share (the mds are a whole share). i just don't see how i can even begin to compete with that. not that it's a competition, but how can they expect us to even reach half of what the docs generate in revenue when they are doing $20,000 caths and thousands and thousands of dollars for devices? i just think that half a share is not reasonable... the reason i care is because if i don't reach that "half a share" amount, i don't get productivity bonuses... despite what my charges are.
any thoughts?

the share should only be based upon the charges for office visits and the expenses for office visits. the expenses needed to run the cath service should be born by those that make the money off them.

when i did pp gi our expenses weren't counted but we didn't get credit for inpatient work. it worked out in the end about the same. also a lot of specialty practices have ridiculous overhead ie the cardiology practice that had a gym and expresso bar that didn't make any money but came out of practice expenses.

basically you have to find out what the practice expenses are. normally they would be your cost, your ma if you have one, part of the schedulers salary, part of the billers salary plus the cost of the portion of the building you use (based on time). so first ask what the share is and what that covers. if you have one ma and all of the physicians have two then a half share is unreasonable. on the other hand in a primary care office where all of the providers use essentially the same resources its not unreasonable to have everyone pay a full share.

if they do any outpatient cath work this should be paid for and billed seperately from the rest of the practice (by medicare statue). the concept in business is called a chinese wall.

david carpenter, pa-c

ANPFNPGNP · Feb 16, 2009

hey all,
i think i pay a ridiculous amount of overhead costs for our cardiology practice... i am expected to pay half a share (the mds are a whole share). i just don't see how i can even begin to compete with that. not that it's a competition, but how can they expect us to even reach half of what the docs generate in revenue when they are doing $20,000 caths and thousands and thousands of dollars for devices? i just think that half a share is not reasonable... the reason i care is because if i don't reach that "half a share" amount, i don't get productivity bonuses... despite what my charges are.
any thoughts?

you are definitely getting the short end of the stick. since the doctors own the practice, they set it up this way so they won't have to pay you a productivity bonus. how motivating is that??

i hope and pray we get full independence in tx this year. i'm so sick of doctors being in complete control! get this, i found out there are a couple of docs (husband/wife) who were looking for a np to work 2 days per week in their primary care practice. i know for a fact that their np is leaving b/c they've been paying her $35/hr (no benefits) for the past 3 years and she got another job making $65/hr. anyway, one of the doctors called me on friday and told me that the np was moving and asked me what i expected in terms of reimbursement (never asked about my abilities/experience). i told him i couldn't accept less than $50/hr, especially since i pay my own malpractice, medical insurance, etc. the doctor said, "we pay our np much less than that, is that pay negotiable?" i said, "yes, it's negotiable as long as we're negotiating for more than $50/hr!" there was a silence

and then he stuttered that he would get back to me. i doubt i'll hear from him again! all i can say is, the more np's/pa's who accept substandard pay, the worse off we all are!:angryfire

DaisyRN, ACNP · Feb 18, 2009

i'm meeting with the cfo about what all the numbers mean and how they come up with the numbers on friday... i'll update everybody with more details about the whole situation then.

thanks ya'll...

DaisyRN, ACNP · Feb 20, 2009

okay... so i got some answers.

they tally my hospital charges and office charges... then calculate my reimbursement (which from the hospital is crap)... then add in "ancillary" profit which comes from echos, nuclear lab, and lab. from that, they will be pulling three different expense categories...

1. administrative costs which will be roughly $1500 per month (3/4 of a share)

2. business costs which will be roughly $2000 per month (3/4 of a share)

3. site specific costs (utilities, rent, medical assistant costs, etc. of our practicie) (1 whole share)

4. my salary will come out of my revenue each month

whatever is left at the end of the quarter, will be split 50/50 with me and my supervising doc.

issues: i am in the hospital every day (and i am the only npp in the hospital every day)... so my reimbursement numbers are not so great. i didnt realize how much the hospital writes off... and plus, with me supervising all of the stress tests in the hospital, i only get the stress interpretation fee (which is low)... and the hospital gets the big bucks technical fee. because i have doubled the hospitals productivity and expedite the mobility of patients in and out of the hospital, the ceo of my company and the ceo of the hospital have agreed that the hospital needs to supplement my salary (due to lost reimbursement and benefit of me doing the tests). so they are going to "subsidize?" i kinda know what that means, but we dont know the details yet. unfortunately, they just work it out and let me know... or i accidentally find out. oh well... at least they are doing something about it.

jer_sd · Feb 20, 2009

daisy,

actually billing for hospital patients can generate decent $$. are you billing for 99231 or 99232 visits when you round on patients? assuming they are not in a global period for a procedure addressing 2 of 3 components allows for reinbursement (interval history, physical examiantion, decision making process).

jeremy

okay... so i got some answers.
they tally my hospital charges and office charges... then calculate my reimbursement (which from the hospital is crap)... then add in "ancillary" profit which comes from echos, nuclear lab, and lab. from that, they will be pulling three different expense categories...
1. administrative costs which will be roughly $1500 per month (3/4 of a share)
2. business costs which will be roughly $2000 per month (3/4 of a share)
3. site specific costs (utilities, rent, medical assistant costs, etc. of our practicie) (1 whole share)
4. my salary will come out of my revenue each month
whatever is left at the end of the quarter, will be split 50/50 with me and my supervising doc.
issues: i am in the hospital every day (and i am the only npp in the hospital every day)... so my reimbursement numbers are not so great. i didnt realize how much the hospital writes off... and plus, with me supervising all of the stress tests in the hospital, i only get the stress interpretation fee (which is low)... and the hospital gets the big bucks technical fee. because i have doubled the hospitals productivity and expedite the mobility of patients in and out of the hospital, the ceo of my company and the ceo of the hospital have agreed that the hospital needs to supplement my salary (due to lost reimbursement and benefit of me doing the tests). so they are going to "subsidize?" i kinda know what that means, but we dont know the details yet. unfortunately, they just work it out and let me know... or i accidentally find out. oh well... at least they are doing something about it.

DaisyRN, ACNP · Feb 20, 2009

well, most of them are level 2's. i guess i should clarify... the reimbursement problem stems from self-pay, no pay patients... plus the hospital write off, which i really don't understand all that much. but what the office writes off versus what the hospital writes off is way different. therefore, when compared to my colleague pa who is primarily only in the office, his reimbursement numbers are way better.

core0 · Feb 21, 2009

well, most of them are level 2's. i guess i should clarify... the reimbursement problem stems from self-pay, no pay patients... plus the hospital write off, which i really don't understand all that much. but what the office writes off versus what the hospital writes off is way different. therefore, when compared to my colleague pa who is primarily only in the office, his reimbursement numbers are way better.

i'm guessing the real problem is that you are not getting all the reimbursement for your hospital work. most inpatient work is done with co-billing. a lot of places put the reimbursement under the physician and don't give the npp any. i would make sure that you are being credited with the work you do including 100% of consults and admits. hospital work should minute for minute pay more than outpatient work. i have a hard time believing you have enough self/no pays to make that much of a difference.

one other issue to your earlier post. on number three (site costs) the amount that you are paying should reflect the amount of time you are not in the office in relationship to other practitioners. if the physicians are spending x amount of time in the office and you are spending 0.5x then the costs should reflect that. also if the practice owns the building then if you are paying part of the mortgage you should get part of the equity (in reality you should not be paying part of the mortgage.

david carpenter, pa-c

DaisyRN, ACNP · Feb 21, 2009

hmm.

well someone's lying to me. the upper admin even says, "she will never make money as long as she's in the hospital..." and to be honest, i would rather be in the hospital! i just dont know how to make it better...

i talked to the billing person yesterday... and the way that our office does it, i turn in charge cards for each patient that i see, indicating the days i see the patient, specifying the level of visit as well. they are uncomfortable with billing a shared visit (i understand there is no "incident to" in hospital)... the doctor also turns in a charge card, and some of the days may overlap my days (because he went behind me and indicated "seen and examined" so it could be billed at the higher level)... the billing clerks look at each card and for the overlapping days, they give the visit to me. for the days that are only indicated by me seeing the patient, i get the charge at 85%. so... is this not right?

i generally do not do consults or admits. well... i do do consults, for "free"... which sucks. so, this is on the agenda to discuss with my supervising next week. i actually perform the consult, gather the information, develop a plan and i know it should go under me... but because of the smalltown mentality... the referring physician wants a "physician" to see the patient, so my supervising comes behind me, sees the patient and adds to the note... taking the credit. i know this is not appropriate. i am losing moolah on this one, and this will change.

core0 · Feb 21, 2009

hmm.
well someone's lying to me. the upper admin even says, "she will never make money as long as she's in the hospital..." and to be honest, i would rather be in the hospital! i just dont know how to make it better...
sounds like they don't know what they are doing.
i talked to the billing person yesterday... and the way that our office does it, i turn in charge cards for each patient that i see, indicating the days i see the patient, specifying the level of visit as well. they are uncomfortable with billing a shared visit (i understand there is no "incident to" in hospital)... the doctor also turns in a charge card, and some of the days may overlap my days (because he went behind me and indicated "seen and examined" so it could be billed at the higher level)... the billing clerks look at each card and for the overlapping days, they give the visit to me. for the days that are only indicated by me seeing the patient, i get the charge at 85%. so... is this not right?
kind of. if they are billing at 100% they have to bill it as a shared visit unless the physician does all the elements of the encounter themselves. the only way to bill at 100% is to bill under the physician. it sounds like they are billing shared visits even if they don't know it. on the other hand seen and examined won't survive regulatory scrutiny, but thats not your worry. if they are giving you 100% of the billing its a win for you so doesn't really matter. the 85% part is correct for medicare only. most insurance companies reimburse 100% for any visit npp or physician.
i generally do not do consults or admits. well... i do do consults, for "free"... which sucks. so, this is on the agenda to discuss with my supervising next week. i actually perform the consult, gather the information, develop a plan and i know it should go under me... but because of the smalltown mentality... the referring physician wants a "physician" to see the patient, so my supervising comes behind me, sees the patient and adds to the note... taking the credit. i know this is not appropriate. i am losing moolah on this one, and this will change.

ohh so many things wrong here. first there is no shared component in a consult. either the physician does all the work themselves and bills for it or they should bill under you. this is probably where you are losing a lot of money. for example if you are seeing 10 impatients and 2 consults you should make around $80 for each hv2 and around around $160 for each consult (assuming level 4 on average). these are medicare rates, you should make more for insured patients (less for no pays).

also you really need to look at your collections vs. your billing. they may be billing a lot for you and not collecting anything. maybe they are billing under your npi and the carriers instructions are to bill under the physician. if you are not credentialled then all the reimbursement kicks out. or they are billing for your services on the same day that the physician does a procedure. if they do not bill for seperate services same day then you don't get paid. usually the physicians care a lot about their collections. they may not care so much about yours and this is what the biller pick up on.

another important part that i think npps should get credit for is downstream revenue. lets say that by themselves a cardiologist can see 8 hvs 2 consults and do two caths. pulling a number out of my butt lets say that reimbruses $4000. now lets say that the two of you together can see the same 8 hvs and 2 consults but because you can see the inpatients he can schedule two more caths make a total of $7000. that extra three thousand dollars is all because you are there. you should get some of that. the aapa has a really good study on this in ortho which shows that downstream revenue is equal to office reimbursement and assist fees in orthopedic practices.

finally you are in an area that makes most practices uncomfortable. they are not usually comfortable discussing money issues among partners much less others. only the best practices have a really good handle on what their costs are. pushing this issue invites pushback. you have to tread carefully here. it really depends on the relationship that you have with the practice.

i would start by looking not only at billing but collections. if you can identify areas of lack of collections, this is essentially free money. they are more likely to share that with you than have you cut into their consult money, which is essentially money out of their pocket.

david carpenter, pa-c