I’ll never forget a doctor who I recruited to a practice who was frustrated by how much the practice paid in rent and, more so, how much his share was! There are so many expenses to consider such as staff salaries, computer expenses, benefits, furniture, equipment and insurances. Therefore, it’s important to get all the expenses outlined in the partnership agreement.
Partnership or shareholder agreements should define the practice’s legal structure: sole proprietorship, partnership, professional corporation, limited liability corporation, or hybrid. It will also spell out terms of the buy-in, or how much you are required to pay to become an equity owner. The size of the buy-in depends on the overhead; the lower the overhead the lower the buy-in. Some practices bait physicians with a zero or low buy-in price in exchange for a reduced salary during their years of employment. “The partner is, in effect, prepaying their buy-in,” says Jack Valancy, a practice management consultant. “Rather than charging you [ . . . ]
Partnership is and has been a valued professional goal. I always thought of it as a positive until a practice manager told me that it’s not always the best thing because a practice may be in the red. Therefore, it’s important to see the financial reports of the practice.
1. Physician work RVU = the level of time, skill, training and intensity to provide a given service.
2. Practice Expense RVU = Addresses the cost of maintaining a practice including rent, equipment, supplies and non-physician staff costs.
3. Malpractice RVU = Represent payment for the professional liability expenses. These are supposed to be reviewed on a bi-annual basis, but in practice this has not frequently occurred. This is the smallest component of the RVU.
Each CPT code is targeted for review at least every 5 years. Historically, a group of codes appear to be targeted each year by Medicare in order to [ . . . ]