A Nurse Practitioner in NJ has written in with a couple of questions regarding negotiation for office space and collaboraton fees.
Here’s my situation-I have been working as an independent contractor for the last 2 yrs seeing patients in their homes for disease management teaching/coaching. I wanted to expand that concept. I though of getting my own clients through advertising etc, but also wanted to be able to treat patients at home if unable to reach
their PCP and then ultimately have my own practice. I called a MD recently to try to see if he could be my collaborative physician for this venture. He wants a proposal. I thought I might work for him 1 day per month instead of paying him. What is the going physician fee for collaboration? Also how do we negotiate office space usage?. Looking forward to hearing from you.
For those of you who have experienced this, what have you found? Feel free to comment below, or contact me with your thoughts.
{ 34 comments… read them below or add one }
The going rate in our area (South LA) is $100/hour including travel time. Some people pay a % of their take home net receivables such as 5% if they make enough money.
As for renting office space – it all depends on if you have to pay part of electricity, gas, water, phone, internet, salaries of employees, etc. It would probably be figured on the amount of square footage you would be accessed to use as your own if any and figure out that amount as compared to the entire square footage in the office and do the % of the monthly expenses.
Good luck,
Nina Ravey, FNP-BC
I am from NC and it may be totally different here. From what I have heard the rates vary from $500 – $1500 a month and some use the percentage of collections method. I am relatively new in Practice. Just opened in December. My collaborating physician has agreed to payment based on amount of money collected and has it gradually increasing until the practice builds.
I am also from NC and my collaborating MD didn’t ask for anything. I offered him 500 a month and an “hourly rate”…I will most likely pay him 100/hr for face to face meetings when they are a requirement. I still haven’t opened my practice and he is not “officially” my collaborator, but he has agreed. My rent will be $15 a square foot…but my practice will be in a rural area. Seems like you’d come out a little cheaper by just paying your MD instead of working a whole day for him. Ya’ll tell me if I’m wrong, but assuming an lowball reimbursement of $60 a patient, and if you were able to see 20 people a day for him…you’d make his practice about $1200 that day. Seems like you’d be better served staying at your site and building your own practice! Jan D.
Jan,
A lowball reimbursement in my state for medicaid (99213) is about $35.00! I’d love a lowball of $60!
I’m surprised at your rates for rent…$15.00 a sq ft seem rather high to me. In our area, which is also rural (WA State), that would be unheard of. Even for a brand new space, in another town, it was under $5.00 sq ft.
This is interesting…
Barbara
I agree. I think you would be better off staying in your own practice and building it and agreeing to a fee with your supervising physician. My rent runs just under $10 a sq ft, which for the area I felt is pretty good. I live in a somewhat rural area, however it is a coastal town.
Sherry K
Yes, I’m sure medicaid will be a killer, but most of the people I will see will have private insurance (at least if I can believe my own market research). I hope to do a lot of procedures which should get my numbers up. Not positive, but hopeful. Regarding the rent..I’ll bet it’s all over the place according to area. I wonder what the NP’s in private practice in NYC pay??! Jan
How are other NP’s financing the start of a new practice?
Boy you guys are all over the place! For Wilsonville Oregon where my practice is rent runs 18-22.00 a sf, plus triple net fees, (for grounds maintenance).(This adds about 25% more to the rent) Most places want a 3-5 yr lease. This is why I am in a tiny space. I cannot afford a 1300 sf space. I bought a non plummed sink for 100.00, and keep it in my exam room.
Medicaid pays for me 35.00 per rvu. I am not sure if they are using the most up to date 2008 RVU rates. But I do get paid 87.00 for a 99214. I believe it is about 60.00 for a 99213.
But remember for all of you, please negotiate with your insurance companies for better reimbursement. You are not stuck with the “rates”.. When your contract comes up for renewal negotiate for a higher rate per RVU, and make sure the companies are using the most utd RVU rates.
Carla
Oh, and for Cecilia,
I would love to hear also how all the NPs finance their start up. It cost me about 15,000. 7,000 dollars up front from savings for initial rent, malpractice insurance, licensing, and furniture, and then over the last 5 mos I have spent several thousand on an EMR (Amazing Charts), a second computer, advertising, vaccine and supplies for the practice.
I now have one employee- an ma/front desk person who is working 18 hrs a week. She costs about 1,000 a month. I have set up payroll for myself and her with ADP (like Paychex)… Minute Clinic is a large retail clinic, and also uses ADP, and I have heard other good things about them. They will handle payroll, tax deductions, and set everything up for tax issues at the end of the year.
I am single and pay for my own health insurance, home mortgage, and other bills all out of my practice income. I am almost in the black after 6 mos. I am getting about 5 new patient calls a week, and still would say 80% of each patient visit is a first time visit. So we are still building a base.
Hi Carla, I had visited your web site and really liked it. As a matter of fact, I had requested for you to contact me few months ago, but I guess with your new practice you are extremely busy. Rigt now I do independent work for an med ins company and that is my business. But I want to set up practice within next 1-2 years. I have been reseasrching etc but still have not put things into place. As they say, one may not see a profit for the 1st 2 yrs or so. hang in there.
Hi Clavel,
I am sorry, I did not see where you asked for me to contact you. Thank you regarding the website. I still am going to get some better pictures, including one in front of my car (as I do housecalls, and my lettering and log is on my car window, in my labcoat, and one in my exam room with a baby or another patient. One great thing about my website, is it is attached to many many key words. Some one can type in health clinic, or medical clinic, or urgent, or medical clinic wilsonville and my entire website link will come up, or the dex knows or yellow page ad… so it links me to all sorts of places..
Do you have an email you want me to contact you at? Or you can go on my website, and go under “contact me” , and it sends it directly to my regular email..
I would love to answer any questions from what I have learned by not going around, but going “through” the learning process.. Take Care, Carla
Hi. I think trading a days work/clinic coverage/call coverage instead of paying the physician for collaboration may be the way to go. If physicians really want to pick up extra hours/$$$ they can find that type of work. In my opinion, what independent physicians are really short of is…time. This is your true bargaining chip. If they are solo providers they are often on call many/most nights of the week unless they are part of a larger call group. Most physicians work long hours to support their lifestyle. Offer first to take call for him. This would be something you could do from home that wouldn’t cost you time in your own clinic. If you do work one day a week in his clinic, your value to him will probably be higher if he gets to be off that day. In reality, you are not going to collect $60 per visit. Don’t see it as money you don’t make. See it as a trade that allows you to do what you want to do on your terms.
Just my 2 cents,
Cindy
As for rent, shop carefully. I have four locations and spend months looking at the local commercial market before I bite. I like using craigslist and officespace.com to look for space. Because I don’t run a full service medical office my needs are less that what you might be looking for but I am a firm believer in keeping your overhead low. I pay on average $9 to $15 per square foot/year. This includes my satellite office in high-rent Redmond, Washington. Looking for space has almost become a hobby to me…I really need to get a life!
Cindy
Carla, can you give me some more details on Amazing Charts. I am looking into a system and it looks like a good deal.
Grace
I just discovered this web site and I wish something like this was around 30 years ago when I started my practice. I have seen lots of NP’s try to open practices and frankly most have failed. So, you have to do your homework and I think you have to start small. The first office I had I rented and sublet an office within to psychologists and massage therapists. Let someone else help you pay your rent. They were totally independent of me – own phone, made their own appointments, collected their own fees. This could cut your rent by a third and could bring in traffic to your office that you might not otherwise see. In the beginning I had a collaboarative MD. I never paid him. I never worked for him. I did sent him referrals. Find out what the MD’s in your area need and fill that need. Do they need help with call? Do they need referrals? It sounds like you are offering too much. Don’t pay them if you dont have to. Find out waht they really need and fill that need if you can. And then – get the laws changed in your state that require this relationship. We hated the concept of collaborative MD’s and so, in NH we got the law changed. I haven’t had a colloaborative MD for over 15 years.
The office I previously worked at had Amazing Charts, so I am familiar with it. I also wanted to say I am researching private practice as well. Some rental space, at best that I have seen has been $10-$12/sq. ft. and I have also heard of arrangements where rent is based on 25% of earnings (to which I hope their is a cap). Some who only do minimal consulting rent space by the hour. I don’t know what collaborative MDs should be compensated, mine has not asked for anything, but I have not actually “started” yet either. I will not be accepting insurance (they won’t pay for a holistic practice as far as I know). Start up costs are unreal….but I have learned a few ways to decrease some pf them, at least initially. Does anyone have any ideas of how to assess marketability and time commitment to run the business? I am not looking to work full-time, although I know there will be additional hours for running the business that are not patient contact hours. Thoughts?
In regards to Nancy,
First of all, congratulations that you started your practice 30 yrs ago! How progressive and brave you were. I completely agree about starting small. I want to get a massage therapist who really needs a space to come in a couple days a week, and it will also bring business in for me, and allow us to advertise an entire new service, with discounts or specials, and help the massage therapist too. And an acupuncturist or psychologist would have a great space to come in once a week too! I am keeping my overhead super small, although in this area the rent space prices are double what they are in the Portland area ( I am in an affluent suburb 20 miles south)..but I got a pretty good deal.. I would like it to be 300 dollars less a month, but other than that utilities are paid with a one year lease. I just need help with the keeping track of bills..my biller is offsite, and I am going to need an in house biller to help me. It is just not working. I have no idea what she is doing or what she is not doing. And she sent out some inflammatory bills, and lost me some good patients. Carla , Oregon
I have a speciality private practice (incontinence center) just outside NYC. NPs have to sell themselves and their value to a practice. If you are thought to be taking away patients rather than building a practice, they will never accept you. I advise you to find a niche. Something MDs dont have time for, like, smoking cessation, diet programs, etc.
I made a deal with the MD that if he refers his patients to me for incontinence that he can bill for my services at his rate (100%) and that he can pay me based on the amount collected.
I was also able to secure 2 contracts for annual physical exams with 2 local utilities companies that employs 300-400 employees which increases his revenue and exposure as well.
I dont pay a penny out of pocket for using the space, phone, lights as well as the secretarial staff and medical assistants and he allows me to precept students too.
Get more business savvy, and sell them your value. Make them a proposal and show them on paper what you are worth to their practice.
Would love to know more about how you decide what to pay your collaborating MD in the states that require one. When you say a percent of income, what percent? 5% sounds high to me.
I am so glad I stumbled upon this website as I work hard to get my new clinic off the ground. Leslie
I would also like to hear about collaborating physicians. Here in Florida we cannot even prescribe controlled substances, let alone get this law changed. Is there anyone in florida paying a collaborating physician? I would be interested to see how much is paid in Florida.
I am from IN and reimbursement from Medicaid is only about $30!!!!!!!!!!!! Medicare is a little more. I want to open my own practice. I have a good practice built up in an office with a private practice physician. Unfortunately, the practice is owned by the hospital. Recently, they have shown disapproval for me haveing my own patients and the want other doctors who aren’t as busy to take my patients!!!! The Drs. are whinning that we are the busiest practice and they cannot get any new patients because of us.
I have found a great place to begin, but I need to know a few things. What percentage of my patients need to be traditional insurance to off-set the number of medicaid and medicare? Also, how much should I pay a collaborater?
Hello Vicki,
There is no set percentages – it all depends on your own situation. That said, I’ve heard it said many times that one should aim for 70% commercial and 30% government. Depending on the area you are practicing in, those numbers may not work. I’ve been open for 2 yrs and don’t have those percentages (I’m in an area with a high percentage of government plans and few commercial plans) and we are still doing okay. It’s slowly changing.
As far as what to pay a collaborator…it varies. Some pay, and some don’t. Some exchange time for payment, others just provide the service, and still others want a some sort of remuneration.
It would be best to speak with several of your local colleagues and see what is the norm for your area.
Hope this helps,
Barbara C. Phillips, NP
http://www.NPBusiness.ORG
http://www.NPBusinessOwner.com
I am a psych np and starting a private practice in Manhattan and wondering if anybody knows what the going rates are for collaborative agreements here and particularly with psychiatrists. From the prior comments, sounds like 500/mo plus 150 dollars/hour would be pretty fair for face and telephone time. Is anybody paying a percentage of collections?
Also, does anybody have experience with a Medicare only house calls practice? I am trying to find reimbursement guidelines for psych for np’s.
None of my local collegues are in private practice- all working in agencies.
Thanks, Mona
Our practice was approached by an Adult Day Care who owuld like us to open a clinic within their daycare. What do we have to do so we don’t violate any startk laws? Do we have to pay rent if they are willing to give us the space for free? We would be the providers for those attending.
I’m in Bethesda, MD and looking for another NP for clinical practice and a collaborative physician (to fulfill my state requirement). Anybody know of anyone?
My experience has been primarily in peds/adolescent/young adult and lactation.
Please feel free to email me. Thanks
Kathy, I seeking the same thing too! Please email me too, I’m one year away from finishing my FNP program. If you are not hard set anchored to MD, I may have an alternative option for both of us, that can circumvent the collaborative requirements.
JT
I have just opened up a clinic in Tennessee and am looking for a new collaborative physician…thank you for all the comments…on fees for services…I am paying a very good price for my office…just $1 per square foot but it is an old building and needed renovations…I spent about 3000 at Home depot. I had about 10,000 besides that to start and am still struggling because getting credentialed and reimbursement takes such a long time. I have been working a second job to help. In the newer part of town, it was $5 a square foot…this is a small town…
Does anyone have any advice on adding xray to their practice…where do I go for regulations etc…
(I apologize in advance for this been so long, this is my first Blog Post here and I feel I need to start by describing my complex situation)…
This will be walk-in, (sign in on any available 20 minute slot) and be seen for goodness sakes! Area Physicians will love to send clients in need, directly from their offices, rather than having to make an appointment 1-2 months out. Maybe the area Docs will donate some stuff to help me 
NO computer except for my personal use. Call me paranoid but I feel on paper, in a chart, locked in my office is the safest one can get. The only real overhead is rent plus I plan to pay a new collaborating physician $500 per month. I’ll buy supplies as needed. I’M STARTING TINY, PINCHING EVERY PENNY, BUYING ALL USED/BARGAIN STUFF CHEAP, AND GOING TO PUT THE MONEY IN THE BANK. I’ll open a healthcare spending account and buy catastrophic health insurance. Oh, I plan to work 12 hours (extended patient hours) per day 7a-7p with six 20min breaks built in for me throughout the day, 4 days per week (NO Fri, Sat, Sun).
I am in a collaborative practice agreement with a physician in MO. The hospital who employs us both recently terminated all contracts with Out-Patient Physicians due to Stark Laws. The hospital is assisting the other Physicians/ANPs establish Independent Practices. My Collaborating Physician is the ONLY Psychiatrist, who is LEAVING and can’t collaborate with me once his office is closed, therefore my position is being eliminated, probably end of Dec., therefore I’m up a creek ~ WAIT! NO I’M NOT!!! Once my head cleared out, I saw this as ‘THE PERFECT STORM’ for ME to go Independent (Not heard of in this area)! I have been working on this non-stop for several weeks. I have a Healthcare CPA experienced with LLCs. I have an RN, Attorney. Today I found an 1100 square foot office space for $750/month – leased by a local Physician who knows me and my collaborating very well, and very much wants to do everything he can to help me with this, he thinks its great! He is calling in a contractor to remodel, brand new, to my specs. He only requires first month rent (no deposit, etc), he said we’d work that out. I think it includes utilities, need to clarify and have a list of questions for him when we meet for the first time next week with the contractor. I purchased a beautiful used solid cherry L shaped desk and 3 chairs from a friend for $275. I need to purchase a computer and industrial fax/copy machine (I have a computer guy who rebuilds, sells, and maintains these items for CHEAP. I’m going to hook up a web cam in the waiting room so I can see who walks in from my desk. I’ll need a basic phone – patients will understand they will need to be seen, rather than have me answer or return their call. My two primary goals this week is to find a collaborating physician (I’m rural, in a Psychiartic HPSA, so looking at Family Practice Physicians, need to clear that with MO Board of Nursing on Monday), and have the no-compete clause waived from my employment contract with the hospital. I can’t see where they would have a leg to stand on to deny waiver of no-compete clause because they are helping other Physicians go Independent, and I will be providing relief to the entire community by promptly seeing my clients, preventing overloaded ERs, Urgent Care, and PCPs in the middle of a Pandemic Flu. The real satisfaction is MY clients will NOW be able to be seen when THEY NEED to be seen rather than ‘when there is an opening in the schedule,’ and They will no longer have to continually fight with their insurance companies. They may seek reimbursment from their insurance if they choose. I am a Psych NP and the only other MH provider in this rural town is a community MH facility, already booked out 3 months, plus they are adding MH Court clients to relieve the jails, so count on MH clinic booked out 6 months (and they are short staffed on top of it all). I would be the only other MH ANP providing meds, etc in this area (Hopefully the beginning of an NP revolution around here)! I am opening a cash only, $50 per 20 min. visit = $150 per hour and that adds up fast. I have built a massive client base in 3 years primarily through client referrals – almost have the entire fire dept now, have several entire case manager client loads, numerous employees at same companies, entire families – except younger than 18, etc. (NO red tape, collections, denial of payment, uhhh and MCR/MCD mistakes (called fraud)…NO EMPLOYEES ARE NEEDED
Long story short – I’m starting off without ANY debt so I guess I start in the green rather than in the red. Things are moving so fast my hair is blowing back! All questions, suggestions, or any problems at all with this plan will be cherished!
Thanks!
Oh, and I know I have licenses, and so much more to do
Hi Julie,
In terms of Xray, check with your regulatory board. The regs may be within the board of medicine or under licensure for radiology techs. Look carefully not only at the regs, but standards, who is required to take and read the films, reimbursement and any limitations that may be in place for you as the NP.
Keep us posted as to how it goes.
PsychANP,
This is sounding good. Make sure you have some back up plans as well. I assume you already know these patients will be able to pay? I know the need in my community for your expertise is great, but many of them would require someone who take insurance. Again…this will vary from community to community.
Keep us posted.
How do you find a collaborating physician? I am in Indiana and I practice in psych.
Hi Tammy,
There are several posts on this topic and I would encourage to to search this blog. Additionally, here is an article I wrote in the newsletter asking this very question.
How do I find a collaborating physician?
http://www.nursepractitionerbusinessowner.com/public/292.cfm
Hope this helps.
I am from MA. I have concerns about the health of my collaborating MD and its impact on his ability to continue to practice. Does anyone have ideas on how to find a collaborating MD? Still hoping supervision will soon be in our past.