Generally speaking, physiatrists have a very low overhead when practicing on their own. However, when you get into the multispecialty arena, and orthopedists are involved, the overhead skyrockets. Since physiatrists do not need alot of ancillary services, and your equipment is fairly low budget in comparison to surgeons, this should be reflected in what your share of the overhead is. Unfortunately, what happens over and over again, is that you end up sharing the overhead equally with the other physicians, but do not necessarily reap the same profits.

You have to isolate what components of the practice you are contributing to in order to determine what your share of the overhead should be. Do you oversee PT? Refer to them? Generate income for the practice from this cost center? Do you receive compensation for your involvement in this? Are the spinal injections being done under Fluoroscopy in an ASC owned by the Group, or in an Office based surgical suite? All of these things are vital to how you will evaluate what your overhead should be. How are the profits of the group distributed?
If you are sharing equal overhead, but are only reaping the benefits of your own billings, then this is definitely something you have to look at and find a way to get the overhead for you to a more manageable level. Determine what direct costs you have, and what cost centers produce revenue for you. The lease space should only reflect what you use. The equipment costs are one-time costs. The other cost allocation would be the surgical suite – depending on how this is set up. An in-office surgical suite would be simple; an ambulatory surgery center is another story, and would depend on if you have ownership interest, the same is true with MRI.
Contributed by Elizabeth Lee, President
Physiatry Reimbursement Specialists, Inc.
A National Company serving Physiatrists all over the U.S. for 25+ years
Fort Worth, TX