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  • #16
    Our charges are high thus collections based on contracts about 30%

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    • #17
      Originally posted by drwifey View Post
      Thanks for the replies, how pay based on collections works has been clarified. For those asking for further clarification as to what I was asking, I wanted to know other doctor’s experiences with compensation based on collections. I know there are different contract structures and my husband and I are trying to choose the best structure for pay at the present moment. The books showed a low collections number for month one (post residency) which makes sense since it’s rolling. The assumption is that month two would include some from month one and some from month two. The best choice based on that information would be set salary with bonus based on percentage of collections past a certain production number past a certain amount of time. Thanks again for the help.
      Yes, this is how it works at my practice (private practice - not hospital-affiliated). I am paid 45% of collections. I honestly don't even know what I'm billing - the only thing that matters is how much I bring into the practice (ie "collections"). After my first month working, I received a check for $900. That was rough. The next month, it was $3000. The next month, it doubled again - and so on, even though I was working the same amount of hours and seeing the same number of patients. I also know that one doc who moved to another state (the one I replaced) is still receiving checks from her collections (due to lag from insurance companies), and she left the practice three years ago.

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      • #18
        Originally posted by lakeswim View Post

        Yes, this is how it works at my practice (private practice - not hospital-affiliated). I am paid 45% of collections. I honestly don't even know what I'm billing - the only thing that matters is how much I bring into the practice (ie "collections"). After my first month working, I received a check for $900. That was rough. The next month, it was $3000. The next month, it doubled again - and so on
        If you started getting a check in January and continued to double you’d be getting over $1.5M a month by November. Solid gig.

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        • #19
          Originally posted by ACN View Post
          Our charges are high thus collections based on contracts about 30%
          You can charge whatever you want and that percentage will change accordingly. What matters is the net collection rate. I’m surprised a few have responded here with their gross collection rate.

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          • #20
            Originally posted by lakeswim View Post

            Yes, this is how it works at my practice (private practice - not hospital-affiliated). I am paid 45% of collections. I honestly don't even know what I'm billing - the only thing that matters is how much I bring into the practice (ie "collections"). After my first month working, I received a check for $900. That was rough. The next month, it was $3000. The next month, it doubled again - and so on, even though I was working the same amount of hours and seeing the same number of patients. I also know that one doc who moved to another state (the one I replaced) is still receiving checks from her collections (due to lag from insurance companies), and she left the practice three years ago.
            Are you in your first year out? Here’s why it matters that you know what you are billing, and more specifically what your actual A/R is based on contracted rates. Your doubling thing isn’t going to last forever as I’m sure you are aware. What if your revenue cycle management people were doing a bad job? How would you know?

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            • #21
              Originally posted by ENT Doc View Post

              Are you in your first year out? Here’s why it matters that you know what you are billing, and more specifically what your actual A/R is based on contracted rates. Your doubling thing isn’t going to last forever as I’m sure you are aware. What if your revenue cycle management people were doing a bad job? How would you know?
              I'll be honest in that I don't particularly want to know how much I'm reimbursed for certain procedures. I'm afraid it will affect the way I practice since I'm paid exclusively on collections. Before this job, I was in a salaried position, and I liked making clinical decisions in a financial vacuum. For me it's not necessarily about making the most money I possibly can but doing what I think is best for the patient. This is part of the reason I see patients every 15 minutes, which is a pretty leisurely pace for my specialty. For what it's worth, I'm four years out.

              I have seen the billing/collections for the other four partners in the practice, so I know where I stand in comparison based on their schedules and the number of patients they are seeing per week. I've leveled out at a certain amount of income per month, and it feels about right for my specialty (based on MGMA data).

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              • #22
                Originally posted by lakeswim View Post

                I'll be honest in that I don't particularly want to know how much I'm reimbursed for certain procedures. I'm afraid it will affect the way I practice since I'm paid exclusively on collections. Before this job, I was in a salaried position, and I liked making clinical decisions in a financial vacuum. For me it's not necessarily about making the most money I possibly can but doing what I think is best for the patient. This is part of the reason I see patients every 15 minutes, which is a pretty leisurely pace for my specialty. For what it's worth, I'm four years out.

                I have seen the billing/collections for the other four partners in the practice, so I know where I stand in comparison based on their schedules and the number of patients they are seeing per week. I've leveled out at a certain amount of income per month, and it feels about right for my specialty (based on MGMA data).
                You don’t have to look at the individual negotiated rates of certain procedures to do basic A/R analysis, nor should doing that analysis shape your medical decision making. It certainly doesn’t with me. It’s about efficiency and accountability on the business aspect of things. That has nothing to do with what you are talking about, which I agree with. The foundation on which a practice should be built is good patient care. Following this, one should make sure the business side is functioning efficiently. And you don’t even have to be the one doing it. Another partner could. Making sure admin contracts are simply incentivized well helps too.

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                • #23
                  Originally posted by lakeswim View Post

                  Yes, this is how it works at my practice (private practice - not hospital-affiliated). I am paid 45% of collections. I honestly don't even know what I'm billing - the only thing that matters is how much I bring into the practice (ie "collections"). After my first month working, I received a check for $900. That was rough. The next month, it was $3000. The next month, it doubled again - and so on, even though I was working the same amount of hours and seeing the same number of patients. I also know that one doc who moved to another state (the one I replaced) is still receiving checks from her collections (due to lag from insurance companies), and she left the practice three years ago.
                  Kinda crazy not to know what you're billing. You could be doing well or getting killed and wouldnt know. Its also trivially easy for the most part. You can work harder or get money you're already owed, lots of older practices were terrible at this.

                  Yours doesnt sound crazy, but just sounds like usual temporal displacement of income.

                  Work smarter not harder kind of idea.

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                  • #24
                    Originally posted by ENT Doc View Post

                    You can charge whatever you want and that percentage will change accordingly. What matters is the net collection rate. I’m surprised a few have responded here with their gross collection rate.
                    I'm clearly missing something as this is something I never understood...Why do some practices have such different gross charges regardless of what is negotiated with insurance companies? If you know XYZ Insurance will only pay $300 for a specific visit, why charge $500? I'm assuming it has something to do on the financial/accounting end of running a practice? And also, to your point, I also never understood why some practices speak in terms of gross collections as that seems to be all over the place given the what different practices "charge", whereas net collections would be a more apples to apples comparison, especially within a certain specialty. It would also give you insight in to whether Practice A has better collections practices than Practice B (assuming same specialty).

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                    • #25
                      Originally posted by ENT Doc View Post

                      55% of gross maybe.
                      Maybe I am misunderstanding something but 55% of the net collections is my keep. I do not look at RVUs or charges or any of that stuff. Just how much cash flows into the practice from my efforts.

                      Also the junk from the insurance companies and ACOs add up.

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                      • #26
                        Originally posted by Ozarka View Post

                        I'm clearly missing something as this is something I never understood...Why do some practices have such different gross charges regardless of what is negotiated with insurance companies? If you know XYZ Insurance will only pay $300 for a specific visit, why charge $500? I'm assuming it has something to do on the financial/accounting end of running a practice? And also, to your point, I also never understood why some practices speak in terms of gross collections as that seems to be all over the place given the what different practices "charge", whereas net collections would be a more apples to apples comparison, especially within a certain specialty. It would also give you insight in to whether Practice A has better collections practices than Practice B (assuming same specialty).
                        My understanding is that it's a combo of one insurance has a rule saying you won't charge anyone less + some insurances actually do pay out that high amount

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                        • #27
                          Originally posted by Ozarka View Post

                          I'm clearly missing something as this is something I never understood...Why do some practices have such different gross charges regardless of what is negotiated with insurance companies? If you know XYZ Insurance will only pay $300 for a specific visit, why charge $500? I'm assuming it has something to do on the financial/accounting end of running a practice? And also, to your point, I also never understood why some practices speak in terms of gross collections as that seems to be all over the place given the what different practices "charge", whereas net collections would be a more apples to apples comparison, especially within a certain specialty. It would also give you insight in to whether Practice A has better collections practices than Practice B (assuming same specialty).
                          Correct. As for why gross charges are used, I don’t know. Maybe to create an upward pressure on the insurance companies with negotiations. And to overcharge the uninsured.

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                          • #28
                            Originally posted by Lordosis View Post

                            Maybe I am misunderstanding something but 55% of the net collections is my keep. I do not look at RVUs or charges or any of that stuff. Just how much cash flows into the practice from my efforts.

                            Also the junk from the insurance companies and ACOs add up.
                            So your compensation is based on the billing and collections, insurance contracts, payer mix, etc. What influence do you have over those processes?

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                            • #29
                              Originally posted by ENT Doc View Post

                              You need to clarify what you mean here and what you’re getting at. Is this a contract/job with a bonus based on collections? Is production gross or contracted obligation? As others have pointed out, collections are rolling. And I would think about patients vs payers very differently in that regard if an owner. If you want to think about it from an accounting perspective:

                              Bill/Gross $500
                              Contracted $300

                              $300 goes to A/R, starts aging typically in 30 day increments

                              Insurance owes $250, patient owes $50
                              Insurance pays on day 25, patient pays on day 62

                              Collections:
                              Month 1 - $250
                              Month 2 - $0
                              Month 3 - $50

                              Rinse and repeat across multiple encounters with different contractual rates with different deductibles/copays/etc. Collections are on a cash basis.
                              Excellent answer. Would just clarify that collections are on a cash basis only if elected by the physician or practice. 99% of the time, cash basis is elected. We just signed on a new clients whose prior (ahem) “tax preparer” chose “accrual”. Obviously didn’t work with a lot of physicians. Now we are presented with the moral dilemma of whether to go through the onerous (expensive) process of filing Form 3115, Application for Change in Accounting Method, for a physician with a side hustle generating ~$50k gross per year. Forgive me, spiritrider, but I am strongly leaning toward simply checking the “Cash” box for this year.
                              Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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                              • #30
                                Originally posted by ENT Doc View Post

                                Correct. As for why gross charges are used, I don’t know. Maybe to create an upward pressure on the insurance companies with negotiations. And to overcharge the uninsured.
                                Thank you for confirming and for clarifying. As far as overcharging the uninsured, I guess having a knowingly higher charge for something makes sense (not saying it's ethical). Who knows, maybe it pads the ego for admin or whoever to say we had $xx,xxx,xxx in gross billings this year!

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