Psych NP , you're probably being underpaid.

[guest1182631]

The numbers, crunched...

Check my math and reasoning here and discuss where you see glaring holes. So the most common billing codes outpatient would be 99214 and 90833, can bill concurrently (same visit) , Med management + brief therapeutic intervention / followup / supportive therapy / CBT primer etc

We will ignore new patient intakes for this brain storming session. Will also ignore medicaid because the payments are all over the place (and many states have lots of managed care options for these folks)

OK so, a PMHNP can bill medicare 85 cents on the dollar for what medicare would pay an MD Psychiatrist.

Technically you could do three of these appointments in an hour but for our purposes lets say half hour followups.

99214 2023 medicare rate is 128.48 (x0.85) = 109.21 for Psych NP

90833 2023 rate is 69.47 (x0.85) = 59.05 for psych NP.

Now Per HCCI and some other sources , private insurance can sometimes pay out less than medicaid (5 to 14%) but is usually on par, up to 180%. this can vary widely and even widely within states (like 120 dollar difference in a states capital vs rural). So we are using Medicaid payments as a frame of reference in order to deduce some estimates for what outpatient insured clients pay / generate in revenue.

reimbursement is also a function of negotiations, more experience meaning more renumeration. For the sake of my hypothetical I'll assume the "new grad" rate represents the lower end of the medicare billing payout and that private insurers would go up from here (but if you know different let me know, maybe new grads get 20% less traditionally, I couldn't find any legitimate dfata on this).

So this gives us a range for billind code 99214 for a psych NP of 93.92 up to 196.68, and a range for billing code 90833 from 50.78 to 106.29.

Let us presume you see on average two such clients an hour. This gives us on the low end $289.40 billable value and on the high end $605.94. Eight hours in a day, five days a week gives us 11,576 dollars a week (seeing 16 patients a day) on the low end up to 24,237.60.

Monthly in then equals on the low end 46,304 and on the high end 96,950.40. You see 80 patients a week for this, 320 a month.

Now, overhead costs. Estimates from some Google fu pin this at around 40 to 60% (although I don't think 30% or lower would be absurd, especially with more offices in an outpatient setting to centralize things and get quantity discounts on things) , Lets call it 50%. That's software, billing people, secretaries, off hour answering service, fax, internet, light, rent etc

So our low end gets chopped in half to 144.70 an hour. High end 302.97.

Heres the kicker though, if you walk in to some place to a full patient load, what have they really done? the patients already existed and had need so you could say they saved you marketing but is that "saved marketing" worth a pay cut in perpetuity (if you work an an independent practice state)

You're a grown up, you couldn't find someone to make sure your billing correctly and get someone to answer phones? . You can get a website for pennies, and a nice one at that.

Because if you were private practice, S-Corp/ LLC then that 50% overhead is your taxes. You won't owe any. Meaning that low end 144.70 is money in your pocket. If you are not in an independent practice state again, here is the amount of money your efforts are bringing in to the practice, does your pay reflect this? , in any other business, if the employees knew that their direct efforts paid X amount, would they except one fourth of X or less?

Lets say you have some no shows and people who don't pay (and again were already not counting the new intakes which bill higher) , shave off another 20%. That's still $115.76 an hour, and that's if your average client has an insurance plan paying 14% below Medicaid (so at the base rate, with the 15% reduction for NP vs MD and we're back up to 134.60)

So low end you should be making 18,521.60 a month (222,259.20 a year) to see 320 patients, a full case load (and remember , I dropped 20% for no shows and non-payment , which I pulled out of nowhere, feel free to play with the numbers if you do a 9 to 5 and only take a half hour lunch to get an extra 30 minutes of charting in and take a patient or two off per day for more admin work, still a pretty large amount of money coming in the door)

So it would seem to me that any clinic or site paying in the 50 or 60 range is just taking advantage of people. Even 80 to 100 is pretty questionable (even if you're not in a full practice state, we already took out 50% of the income that is billed for to pay for office staff and rent and all of that).

If they're forcing you to see 3 patients an hour? low end again, lowest possible ever studied or seen 14% below Medicaid you are now actually worth 173.64 after all expenses (and that's with 20% no shows or vacancies). 

Lets give the "owner" a healthy 10% profit margin because they so nobly googled "office space for rent" and "EHR software, price comparison" and did all that scary work. Oh and they "brought" the patients in! (the demand exists, you can get to 80% capacity in basically any area in 2-6 months with just networking and word of mouth). OK so fine, we give them 10%, which is a pretty healthy cut considering the actual office management was paid for in the 50% overhead that came from your work so this noble and much needed "owner" can actually do literally nothing.

THATS STILL, at the lowest, 104.18 an hour if you see two clients an hour, with the worst paying insurance, bottom barrel, minimum, in your pocket, nationwide. 121.14 is closer to a realistic average. Now let me ask you board certified psych NP's.

Do you make 120 dollars an hour? because if you don't, its because someone's stealing from you. I can assure you, shopping for an EHR and finding an office manager isn't such a huge mountain to climb that its worth you losing 30-50% or more of the money your value produced for the rest of your career, and if you are not in a full practice state y'all need to get together and figure it out. Don't let the new grads take chump change.

Thoughts? critique? am I way off somewhere?

[FullGlass, BSN, MSN, NP]

It's not as easy as you think to set up a practice.  If it were, everyone would be doing it.  Several psychiatrists (MDs) have told me that it takes about 3 years to build a decent practice from scratch.  And it requires effort to do so.  How many NPs know how to do this?  Or are willing to do so?

As an employee, sorry, you don't get 100% of the revenue you generate.  There is administrative overhead, which is considerable in health care, thanks to the insurance companies and the government.  In addition, an employee gets benefits, like paid time off for holidays, vacations.  They get paid even when patients do not show up.  Besides the administrative items you listed, there are things are malpractice insurance, which can be very expensive, depending on specialty.  Physical office space can be incredibly expensive, depending on location. One also has to deal with the hassles of managing admin staff, managing providers (which can be a real pain), dealing with technology (and paying for it), dealing with disgruntled patients, and so on.  

This is why the number of private practices continues to decrease at a very high rate.  MDs just don't want the hassle of setting up and maintaining private practices.  It is easier to be an employee.

Half of states still do not have FPA, so NPs have to practice under an MD, and MDs aren't going to do that for free.  

There are some telehealth platforms, primarily for mental health, that provide all admin support and funnel some patients to a PMHNP, but those are contract positions without benefits.

Compensation is also based on risk.  The higher the risk, the higher the reward.  Employees have lower risk, so they get paid less than contractors.

And yes, practice owners should get a decent profit, since they put in all the work to build and maintain a practice.  

That said, pay for NPs seems to have gone up a lot recently, including for PMHNPs.  Pay also varies by location, with states such as California paying very well.

As an employee, PMHNP, I am making $100 per hour (about $200K per year) with so-so benefits after 3 years, and I think that is fair.  With holidays, sick time, CME time, and PTO, I have about almost 30 days paid time off per year. 

I have seen ads for PMHNPs to make up to $300K per year as contractors, so that is an option for any PMHNP who wants to put in the effort.