First contract productions question

[Hockeyfan23]

Hey all,

Currently in my pgy-3 year of residency and currently in the process of locking down a neurohospitalist job post residency. i have actually just received an offer and contract for a position with a small group practice near my hometown. They are mixed outpatient inpatient practice. I would be seeing inpatient consults for hospitals they have contracts with. I did have a few questions for anyone with experience. Any help would be greatly appreciated.

1. This is a base salary + production model. The base salary is guaranteed and is very generous and the production model is as follows and is based on keeping a percentage of “physician net receipts”: 0-750k=no bonus, 750k-1mil=50%, 1 mil-1.25mil=60% and so on....my question is really regarding what a reachable and attainable “physician net receipts” would be based on billing. This is a M-F gig with occasional weekend coverage (1/4).

per contract, net receipts is defined by gross receipts - related billing fees.

Gross receipts is defined as medical services rendered by physician on an inpatient and outpatient basis (less refunds) including but not limited to patient fee receipts,pharmaceutical receipts, infusion fee receipts, and lab receipts (each net of direct expenses, including but not limited to payroll expense, taxes, employee benefits, and costs of lab tests/supplies) and any other medical services receipts generated by physician.

Related Billing fees is defined as any expense incurred by the group to generate process and receive physicians gross receipts.

Any suggestions are welcomed as I am clueless on billing.

[Tim]

MGMA has Gross Billings data. The problem is it will simply be a "wind direction" indicator, it won't give you the windspeed for your situation.
Are you using a contract review firm? There are services listed and you can use a healthcare attorney as well.

Because it is a small group practice, probably your "best source" is to actually request their help. Data on the expected production volume and expenses (including the fees).
It is reasonable to have a good understanding of how your work translated in to the billings and the net of expenses, and the volumes based upon the past billings.
The result is an expected range of compensation. The key here is "I would be seeing inpatient consults for hospitals", how much is available and would you be hitting the targets.

A generous base + a fair production incentive is a great model. But, it can turnout good, great or terrible. One thing that was not clear was if there was a partnership track with the group etc. or are you simply filling a spot that they expect turnover on a repeated basis (they make money off of you with no intent to bring you in).

One last point, you get paid based upon collections - expenses, not billings. Gross receipts is money coming in, not billed (bad debt and any write offs are out of your pocket).
This can be twisted that you get all of the ones without insurance or on low paying medicare or medicaid. Same work, lower pay.

[Hockeyfan23]

Unfortunately I will be the first one in the group doing neurohospitalist work as they are all outpatient focused so they don’t have hard data for me.

[White.Beard.Doc]

This question cannot be answered without knowing the group's insurance contracts and payor mix. If this is a medicaid population, you will never see a bonus. If this is a commercial population and the group has great contracted rates, then you will likely do very well.

I agree with Tim, your best source is to ask them to share data from the other neurologists in the group. How much are they billing and collecting, in the office and in the hospital.

In any case, given the generous base, you will likely be fine no matter what. You could just chill, and go ahead and join the practice if it feels like the docs are good and the culture is right. You could do that on the assumption that the base is adequate compensation and anything above that is gravy.

[Tim]

In any case, given the generous base, you will likely be fine no matter what. You could just chill, and go ahead and join the practice if it feels like the docs are good and the culture is right. You could do that on the assumption that the base is adequate compensation and anything above that is gravy.

You may have a perfect base for joining a practice near to your hometown. Trying something new might work. It all depends on the success and if they would make room for you if it does not. They have skin in the game with the generous base. It leaves you options and they seem to be willing to cut you in on virtually everything. That is actually a good sign. You may have found a good partnership. Or not. I would still have the discussions of the projections they are making and the future alternatives both favorable and unfavorable.
At least you have a common understanding either way.