Question about working as IC in nursing home

Editorial Team / Admin · Sep 8, 2008

I'm not familiar with this and I'm sure core0 will have a better idea/advice than I, but have you asked your PA friend what percentage she offers?? Seems that would be one place to start.

core0 · Sep 9, 2008

I have a PA friend who is seeing nursing home patients for a group of doctors. They are giving her 50% of what she bills and she's averaging over $100/hr! She works a minimum of 30 hrs per week, so that's pretty good money.
I know a NP who is doing the same thing, but she isn't giving the docs a dime and she bills Medicare directly. I was thinking about doing the same thing, but I was going to give the docs a percentage of what I collected. This NP is starting to lose customers (she has a contract with the physicians) and it's because she refuses to give the docs a percentage.
Does anyone have any idea how much of a percentage I can offer the docs? I can easily come up with a contract, but I want to make sure I lock them into it for a minimum of one year.
Thanks for any info you can give me.

The world of nursing home billing is very interesting. The stuff I have is several years old. I haven't found anything newer but I would be glad to be corrected.

The first issue is to differentiate between a nursing facility and a SNF. While many of the requirements are the same, there are some differences.

Next the issue of paying a physician. It is acceptable to work as a 1099 contractor or as salaried or hourly employee. For NPPs (CNS, PA, NP) seeing nursing home patients there is a requirement that there must be a supervising physician. There are also requirements for certain visits that must be done by the physician. Each patient must have a physician assigned to them and must have a back up physician in case that physician is out of town. These physicians must be able to respond to the facility in an emergency.

The issue with paying a physician a percentage of the profits is that it can't be a kickback. Ie I will pay a percentage of each patient that you send me. There has to be real value given by each side. In the case of nursing homes there is a requirement for back up. There are requirement for visits and coverage so its pretty easy to show value.

What its worth is the question. The physician(s) that signed on the NP with no payment is foolish. For non OB/non surgical areas Nursing homes have some of the highest risk out there. That risk is inherent for every patient that they have in the nursing home. At the very least they should have some compensation for the risk. For PAs who own their own practice the standard compensation seems to be in the area of 5-10% of the collections (either before or after expenses depending on the contract). I've heard as high as 20% but that is purely anectdotal. In the case of the nursing homes given the increased liability and the increased requirements for seeing patients this is probably the floor. On the other hand 50% is a little much (of course if they are not covering emergencies or call its not bad either). Probably somewhere in the 20-40% is fair (just my best SWAG). One method might be to do a contract for 40% to the physicians with a proviso that the percentage decrease after one year depending on patient and physician satisfaction. If you are going to take emergencies and lots of call then closer to 20% is fairer. A lot of this is going to depend on how willing they are to part with money and what services they are used to.

In general the patient has to be seen every 30 days and the physician can alternate these visits with an NPP. For NF the NPP can certify and do the initial comprehensive visit. For SNF the NPP cannot do the initial comprehensive visit and a PA may not recertify (but NP and CNS can). Any provider can see the patient for a medical nescessary visit between the scheduled visits. Here are some guidelines that explain the ins and outs of what the NP and CNS can bill for:

http://www.health.state.nd.us/HF/PDF_files/sc0408.pdf

http://www.cms.hhs.gov/MLNMattersArticles/downloads/SE0418.pdf

Note that state regulations may be more strict and supersede Medicare.

As always this article on NP billing is worth reviewing even though it only touchs one nursing home billing (registration required):

http://www.medscape.com/viewarticle/422935_1

A final note on contracting. While $100 may seem like a lot remember that you are responsible for all expenses and taxes including social security. SS takes 15% off the top and benefits are generally 20-40% of salary. This very quickly takes $100/hr down to a much smaller number.

Hope this helps.

David Carpenter, PA-C

ANPFNPGNP · Sep 9, 2008

I'm not familiar with this and I'm sure core0 will have a better idea/advice than I, but have you asked your PA friend what percentage she offers?? Seems that would be one place to start.

The PA works for a group of doctors at a clinic, not independently, and they are giving her 50% of what she bills. They do all the billing, etc b/c a PA can't bill Medicare/Medicaid directly. I've heard that's the only reason all these other docs are using this NP b/c she does her own billing. However, word is getting around that they should be making a percentage of what she collects and she refuses to give them a cut. Of course, that's ridiculous b/c those doctors are still liable for all those patients.

ANPFNPGNP · Sep 9, 2008

The world of nursing home billing is very interesting. The stuff I have is several years old. I haven't found anything newer but I would be glad to be corrected.
The first issue is to differentiate between a nursing facility and a SNF. While many of the requirements are the same, there are some differences.
Next the issue of paying a physician. It is acceptable to work as a 1099 contractor or as salaried or hourly employee. For NPPs (CNS, PA, NP) seeing nursing home patients there is a requirement that there must be a supervising physician. There are also requirements for certain visits that must be done by the physician. Each patient must have a physician assigned to them and must have a back up physician in case that physician is out of town. These physicians must be able to respond to the facility in an emergency.
The issue with paying a physician a percentage of the profits is that it can't be a kickback. Ie I will pay a percentage of each patient that you send me. There has to be real value given by each side. In the case of nursing homes there is a requirement for back up. There are requirement for visits and coverage so its pretty easy to show value.
What its worth is the question. The physician(s) that signed on the NP with no payment is foolish. For non OB/non surgical areas Nursing homes have some of the highest risk out there. That risk is inherent for every patient that they have in the nursing home. At the very least they should have some compensation for the risk. For PAs who own their own practice the standard compensation seems to be in the area of 5-10% of the collections (either before or after expenses depending on the contract). I've heard as high as 20% but that is purely anectdotal. In the case of the nursing homes given the increased liability and the increased requirements for seeing patients this is probably the floor. On the other hand 50% is a little much (of course if they are not covering emergencies or call its not bad either). Probably somewhere in the 20-40% is fair (just my best SWAG). One method might be to do a contract for 40% to the physicians with a proviso that the percentage decrease after one year depending on patient and physician satisfaction. If you are going to take emergencies and lots of call then closer to 20% is fairer. A lot of this is going to depend on how willing they are to part with money and what services they are used to.
In general the patient has to be seen every 30 days and the physician can alternate these visits with an NPP. For NF the NPP can certify and do the initial comprehensive visit. For SNF the NPP cannot do the initial comprehensive visit and a PA may not recertify (but NP and CNS can). Any provider can see the patient for a medical nescessary visit between the scheduled visits. Here are some guidelines that explain the ins and outs of what the NP and CNS can bill for:
http://www.health.state.nd.us/HF/PDF_files/sc0408.pdf
http://www.cms.hhs.gov/MLNMattersArticles/downloads/SE0418.pdf
Note that state regulations may be more strict and supersede Medicare.
As always this article on NP billing is worth reviewing even though it only touchs one nursing home billing (registration required):
http://www.medscape.com/viewarticle/422935_1
A final note on contracting. While $100 may seem like a lot remember that you are responsible for all expenses and taxes including social security. SS takes 15% off the top and benefits are generally 20-40% of salary. This very quickly takes $100/hr down to a much smaller number.
Hope this helps.
David Carpenter, PA-C

Thanks for the information. Actually, I'm already an independent contractor and I'm only getting paid $50/hr, so $100/hr would be a huge increase.

JEKA · Sep 15, 2008

where can I find out how much insurance companies, medicare etc cover for services without actually asking the billing person in my office? I am paid by the hour but would like to know approximately what I "bring in". It may help in future negotiations but I wouldn't want to "tip my hat" so to speak until the right time. thanks

core0 · Sep 15, 2008

where can I find out how much insurance companies, medicare etc cover for services without actually asking the billing person in my office? I am paid by the hour but would like to know approximately what I "bring in". It may help in future negotiations but I wouldn't want to "tip my hat" so to speak until the right time. thanks

http://www.cms.hhs.gov/apps/ama/license.asp?file=/pfslookup/02_PFSsearch.asp

Its a little hard to use but if you play around a little bit you can figure it out. Just look up the payment by the different CPT codes.

David Carpenter, PA-C