Realistic group/provider split?

[DrCOVID, DNP]

So my initial contract was 30% to the group as a 1099. This seems a bit excessive - I still have to pay tax, and do most of my own admin work as it can't be delegated such as take calls, emails, PAs, and they can't help with even basic support, such as calling EMS in an emergency. Is 20-80 fair or is that unfair? The group made more than enough for 2 full time admin staff from me last month. 

[umbdude, MSN, APRN]

80/20 is probably unfair. 70/30 is good. Most of the practices in my area are offering 60/40 for 1099. I work some hours at a place at 60/40 but they run a very tight ship, handle almost everything, and there's already a panel so I was almost full from the get-go. Even so, I'm not really sure whether this 1099 60/40  structure can be comparable to a w-2 job (w/ benefits) that pays $150k+. In the future I probably will never accept 60/40 split again.

One way to think of it is how we're reimbursed: for 99214, the total RVU (which includes work RVU + practice expense + malpractice) is 3.75 and work RVU (work an NP perform) is 1.92. The wRVU is ~51%, malpractice ~3.5% and practice expense is ~46%. This means that insurance is reimbursing based on a split of 54/46. 90833 wRVU % is relatively higher. If we combine 99214+90833, the weighted wRVU % is almost 60% and practice expense RVU is ~40% (thus 60/40 split).

If I were a practice owner, the only time I would pay the providers more than 60/40 is if I have enough providers to make my operations most efficient (e.g. having maximum number of providers for 1 administrative assistant). That's hard to do in a small practice or a practice with high provider turnovers.

Another way to think of it is just looking at the costs. Billing alone can cost 5-9% of receipts, and then there's also EHR, advertising and marketing, salaries for admin staff, credentialing, office spaces etc.

[DrCOVID, DNP]

Thank you for the breakdown - but yes, it is a large group with like probably 100+ more therapists/NPs ... I often do my own scheduling (while I am talking to my client)... so new intakes are all that is needed there. I know a percent goes to the biller, but I thought it was lower, like 3 ... I guess it could go up to 10 but that seems like a rip off. I do my own billing slips and for psych it is always the same like 2-4 codes! 

I got offers of 40/60 and 50/50 as well even in IP states. My group rep did mention that 19% is pretty much required as this cost goes directly to overhead. 

[umbdude, MSN, APRN]

On 2/26/2022 at 5:56 PM, DrCOVID said:

Thank you for the breakdown - but yes, it is a large group with like probably 100+ more therapists/NPs ... I often do my own scheduling (while I am talking to my client)... so new intakes are all that is needed there. I know a percent goes to the biller, but I thought it was lower, like 3 ... I guess it could go up to 10 but that seems like a rip off. I do my own billing slips and for psych it is always the same like 2-4 codes!

Billing companies that charge 3% likely isn't good. Billing slips only flag billers to submit claims. A good billing company will make sure that your claims are paid as quick as possible and pursue aged/denied claims. That could make a huge difference on what you take in and the stability of your income.

On 2/26/2022 at 5:56 PM, DrCOVID said:

I got offers of 40/60 and 50/50 as well even in IP states. My group rep did mention that 19% is pretty much required as this cost goes directly to overhead. 

I don't know what other states reimburse but 40/60 and 50/50 seem ridiculously low. You could try to open your own practice so that way you can manage the overhead.

[DrCOVID, DNP]

I am often involved in collecting and expected to somehow evaluate insurance issues, when I am just not really trained on that... but learning more as I go bc it is a problem sometimes. Opening a practice I think is hard... but I have thought about that multiple times. Maybe in a year or so that might be easier when I save up a little more. I also have a full caseload in the immediate week which took about 6 months ?

[TXPMHNP]

Sorry for the late comment / question (and may post as a new topic) but, have y'all heard of fees to the practice beyond the split?  My wife is an experienced PMHNP and has been doing 1099 work for a practice with a 50% split. Now, they want to add a "floor fee" up front ($2000 per month, paid before the split). We can't find any reference to or basis for this fee. Is this something we've just missed and is common or are they trying to gouge her?

[umbdude, MSN, APRN]

TXPMHNP said:

Sorry for the late comment / question (and may post as a new topic) but, have y'all heard of fees to the practice beyond the split?  My wife is an experienced PMHNP and has been doing 1099 work for a practice with a 50% split. Now, they want to add a "floor fee" up front ($2000 per month, paid before the split). We can't find any reference to or basis for this fee. Is this something we've just missed and is common or are they trying to gouge her?

Never heard of this but not surprised. The field is getting flooded with new grads and when practices know they can replace us quickly, they'll do what profit them most.

50/50 split is terrible if it's 1099 with zero benefit. If I were your wife I would start looking elsewhere. Good luck.