PA owned practices?

[PACPhD]

I worked for a year for a PA owned practice in Las Vegas. He probably did about $2-3mm a year in revenue. He even has a fully operating OR in his clinic and varous surgeons do the surgery on patients for cash only. The PA was a piece of work and screwed everyone who ever worked for him. I will be taking him to court soon for about $10k. He did sell his second practice to my best friend. He is doing well. He has two SP docs he pays. He says you always need two in case there is a problem, if one dies, if one leaves, your practice stops. I think it is about $1000 a month each. There is a lot of exposure for the docs if there are any lawsuits. He just leased a new laser and derm equipment. Hired a cosmetic person. He does Botox also. He started with 12k charts and in less than a year has about 35k charts. No one really bothers you here in Vegas. Even though this is an "old boys club" for a long time and not at all as appreciative as the east coast for PAs, even the CEOs of the hospitals seem to embrace the PA owned practices. No one really goes after any of them that I know of.

[themadmedic]

This is a topic that I would be interested in learning more about, and would certainly attend a breakout session on...

[ventana]

bump......

 

what about an occ health cash basis clinic?? Avoids all the billing, insurance issues and overhead with that...

 

sort of a combo of a minute clinic and simple occ health (DOT and Drug screens)

 

one provider

[EMEDPA]

bump......

 

what about an occ health cash basis clinic?? Avoids all the billing, insurance issues and overhead with that...

 

sort of a combo of a minute clinic and simple occ health (DOT and Drug screens)

 

one provider

 

hard to do occ med without insurance. it's all work comp after all.....

[JenGintheED]

I do know a PA with his own occ med practice, but nothing like what you are describing. He has contracts with companies and does business at the companies' sites. The AZ paperwork was a pain - he had to have a board member visit each site where he would be practicing without a physician on site and get approval. But he seems very happy with his practice, and appears to be doing very well.

 

He also did an occ med residency - a physician program gave him an empty slot.

[Guest docmartin]

He also did an occ med residency - a physician program gave him an empty slot.

 

What program is this? I have a PA friend who wants to do this route but every program he has looked at says that you have to be a physician to apply to the residency program.

[JenGintheED]

Doc, I don't know... but I'll send him an email right now asking him.

 

 

done...

[JenGintheED]

[i went to] the University of Cincinnati. I think I broke the mold though and

I'm not aware of any other non MD students they have taken. Duke has

one for PAs.

 

Hope this helps.

[ventana]

Anyone know the regs for opening/owning a practice in Mass??

[IDFTIGER]

What about practices in NY?

[jmj11]

IFirst, you’re right about different states having different rules. Washington really had no ruling on the subject. They deferred to the Medicare rules which have the 99% rule (your spouse, can own the 1%).

Second, your right, a Doc has to be on hand for 10% of the time (in Washington State in a medically served area, medically underserved areas have different criteria). Frankly, I didn't want to practice w/o a doc anyway, just for perception purposes (I have 12 years of practice). So I hired a doc as an employee, who happens to be my medical supervisor. Relationship between the Doc and PA is paramount here. I went through two other docs before finding one that was a good preceptor, respected the PA profession and was good person.

Financing the start up was another challenge. A lot of banks, thought they have great medical finance programs, don't like to finance PA owned groups. I had to present my BP to 3 different banks before I got past that.

Malpractice is another hurdle. Our state malpractice carrier (WSPI) wouldn't cover any practice that was majority owned by a PA. So I again had to search around on that. Finally settle with GE Medical Protective.

 

 

Scott Jonason, PA-C

Lacamas Medical Group, PC

www.lacamasmedicalgroup.com

 

 

Hi Scott,

I'm digging up this old topic again and am looking at your expertise.

 

I started out trying to create a PA-owned urgent care clinic, but (as you know) before I could secure a SP, an NP (who didn’t not need a relationship with an MD) took the same office space and opened one. She has asked me to be her partner, but the expense of an SP (for me only) would be make that impossible, so she is looking for another independent NP.

 

Then I worked for about a year trying to persuade four different Seattle/Everett headache clinics to allow me to join them as a satellite clinic. Never could get the concept past their narrow-minded administrations.

 

Now, I am resurrecting the idea, but this time a PA owned headache clinic where I would contract with a neurologist for SP services. He practices in another city 30 miles away. I'm not worried about the market as I have a very busy headache practice and have created a wide reputation ove the past four years. I think I could do even better because my present practice (as run by my SPs) is very customer-unfriendly and they have burned many good bridges in our community. Eg. Our phone number is unlisted. My sp comes to work 1 hour late every day. He fired our billing lady and did not bill for 8 months, then hired a contract billing lady who sent all the patients to collections (even though they had never been bill to start with). So I could run a much better, patient centered practice.

 

So, I'm back to logistics, specifics etc. Here starts the questions.

 

1) You may have said already, but are you an LLC? Who co-owns the practice?

2) You mentioned the difficulty of obtaining malpractice insurance, but you were able. In a PA-owned situation, what are the premiums and how difficult would it be for me to obtain?

3) How about credentialling with insurance and federal/state payers? Did you face problems and questions because you were PA-owned?

4) I would also need a business loan for the initial operating costs. I know that you had challenges in that department . . . but any advice?

 

When I talked to people at the state gov when I was considering opening an urgent care clinic, the words I kept hearing were "We frown upon PAs opening their own clinics." I can live with their frowns :( :( but does this translate into more barriers to overcome?

 

I am especially interested in Scott's comments since he did this in Washington state, but anyone else who has insight is welcome to chime in.

 

Thanks in advance,

Mike

[EMEDPA]

Mike- I don't think scott has visited the site in a bit. his practice webpage in an earlier post lists his phone #. why don't you give him a call and arrange to drive down one day and meet him for lunch or something?

he's a very approachable guy. we have actually spoken since he started posting here.

[jonasons]

Sorry Mike,

EMed is right, I havent got back as much as I would like. Darn patients getting in the way of the fun stuff.

 

Anyway,

1) We are a PC. The old LLC really does not give you any more protection than a PC. And/But a PC precludes any "non professional" the right to ownership. These professionals will be defined by your bilaws (in our case it is a licensed medical professional, ie MD, DO, PA, NP). As far as who owns the 1%. Your wife can if you would like. Just make sure she is qualified as defined by the bylaws. In my case, frankly my wife is not qualified, but I own the rest, so who cares. Once I have a provider buy in, she steps out and problems solved.

2) GE Medical, my agent is out of the Tri Cities. Dave Smith with Western States, (800) 659-9916. For each PA about $3000, for the doc about $16K, per year for $1/3Mil coverage.

3) Credentialling wasn't a problem, but we have a doc on site, some insurers till want the doc to be contracted. Some insurers wanted to discount services by a PA like medicare and L&I do, but I was able to quell that.

4) Business loans are a dime a dozen for MD's. As a PA I got a lot of "oh, your not a real doc". Basically, there underwriters understand that you cant practice w/o an MD/DO onsite. Answer that up front. Also have some comittment from insurers that prove your ability to get some contracts.

Anyway, if you want a copy of my original BP, let me know and I can email it to you.

 

All for now, gotta go.

 

Scott

[jmj11]

Sorry Mike,

EMed is right, I havent got back as much as I would like. Darn patients getting in the way of the fun stuff.

 

Anyway,

1) We are a PC. The old LLC really does not give you any more protection than a PC. And/But a PC precludes any "non professional" the right to ownership. These professionals will be defined by your bilaws (in our case it is a licensed medical professional, ie MD, DO, PA, NP). As far as who owns the 1%. Your wife can if you would like. Just make sure she is qualified as defined by the bylaws. In my case, frankly my wife is not qualified, but I own the rest, so who cares. Once I have a provider buy in, she steps out and problems solved.

2) GE Medical, my agent is out of the Tri Cities. Dave Smith with Western States, (800) 659-9916. For each PA about $3000, for the doc about $16K, per year for $1/3Mil coverage.

3) Credentialling wasn't a problem, but we have a doc on site, some insurers till want the doc to be contracted. Some insurers wanted to discount services by a PA like medicare and L&I do, but I was able to quell that.

4) Business loans are a dime a dozen for MD's. As a PA I got a lot of "oh, your not a real doc". Basically, there underwriters understand that you cant practice w/o an MD/DO onsite. Answer that up front. Also have some comittment from insurers that prove your ability to get some contracts.

Anyway, if you want a copy of my original BP, let me know and I can email it to you.

 

All for now, gotta go.

 

Scott

 

Thanks a lot. Maybe I will get the chance to zip over the big hills and see your operation.

 

Mike

[EMEDPA]

Thanks a lot. Maybe I will get the chance to zip over the big hills and see your operation.

 

Mike

 

it's a nice setup. scott sent me some info on the practice and I have refered a bunch of (insured) pts his way in the last month or so.

[jonasons]

Thanks a lot. Maybe I will get the chance to zip over the big hills and see your operation.

 

Mike

 

 

 

Glad to have you Mike. Just drop me a line sometime.

 

One caveat to this whole PA owned practice. Your SP will always have you by the short hairs. In my case our Doc, a great guy and provider, has had a family Emergency that requires he move his family back down south to be by his wife’s family. Anyway, that puts me in a scramble to find someone to fill his shoes. Don’t get me wrong, I respect his family value, and frankly if I was in the same position, I would drop everything and do the same. It is just that it really puts the pressure on us to find the right mix of person/provider that matches our practice style and goals. Not finding somebody will either force me to close till I did (financially devastating) or to sell out to the Hospital (they are already licking their chops, "Lets us know it there is anything we can do!!!! But, if you decide you need to sell we would be very interested").

 

Point is, be careful who you jump into bed with. Have some sort of velvet rope that will keep them comfortably in place, but somewhat difficult to leave.

 

Finally, for all you starry eyed budding entrepreneurs, sometimes a paycheck and a good nights sleep, is worth more than all the trials of ownership. Just remember, it is not only your welfare that you risk, it is your staffs and your patients that will be displaced and disheartened should you fail. That being said, I wouldn't change anything, but I am a glutton for punishment.

[jmj11]

Glad to have you Mike. Just drop me a line sometime.

 

One caveat to this whole PA owned practice. Your SP will always have you by the short hairs. In my case our Doc, a great guy and provider, has had a family Emergency that requires he move his family back down south to be by his wife’s family. Anyway, that puts me in a scramble to find someone to fill his shoes. Don’t get me wrong, I respect his family value, and frankly if I was in the same position, I would drop everything and do the same. It is just that it really puts the pressure on us to find the right mix of person/provider that matches our practice style and goals. Not finding somebody will either force me to close till I did (financially devastating) or to sell out to the Hospital (they are already licking their chops, "Lets us know it there is anything we can do!!!! But, if you decide you need to sell we would be very interested").

 

Point is, be careful who you jump into bed with. Have some sort of velvet rope that will keep them comfortably in place, but somewhat difficult to leave.

 

Finally, for all you starry eyed budding entrepreneurs, sometimes a paycheck and a good nights sleep, is worth more than all the trials of ownership. Just remember, it is not only your welfare that you risk, it is your staffs and your patients that will be displaced and disheartened should you fail. That being said, I wouldn't change anything, but I am a glutton for punishment.

 

Oh, I've thought about that a lot, finding the right SP. That's why I am in favor for a situation where a PA (after x number of years in practice) can cut that cord . . . but back to reality. The piviotal issue is finding the right SP. They must be as secure in the area as possible. Plus it would be nice to have plan Bs and plan Cs.

 

I think I remember that one of your docs as being foreign born. This may not be some kind of rule, but as I have talked to about 10 docs over the past three years, the true blue American docs are most resistant to my concept. It is a huge paradigm shift for them, thinking of PA ownership. It has nothing to do with business sense, but more of the caste system, “PAs exist only to extend or serve the powerful doctor.” However, the two foreign docs that I’ve talked to, see things the way any business person would see it. I scratch their backs (payment, referrals to them for non headache neurological problems) and they scratch mine (acting faithfully as an SP).

Have you noticed that difference?

 

Mike

[jonasons]

I think the perception is much different in primary care as apposed to specialty practice. Since in primary care, the difference between what we do and what the docs do is very thin. That is not the case in most specialty clinics.

 

I really notice the difference in the newer grads. Most FP residency programs have PAs as staff providers so most of the young docs have usually good experiences with the PAs. Also, many providers would rather work for another provider, rather than some administrator who has no real concept on what it takes to practice medicine. So the professional knowledge and respect is already known. There are a lot of primary offices that have had PAs for years, so again, there are some seasoned Docs with good experiences that dont have a problem. Again, choice of working with a pier or for some admin puke. You see how the differences in perceptions are much different in Primary Care.

 

I do see how the acceptance of your concept would be more appreciated by the business minded specialist rather than a clinically minded. Unfortunately the old axiom of great Docs make terrible business persons has survived for decades for a reason. In this, I can agree with you that many foreign trained Docs do seem more open to the business necessities of a practice.

 

Another difference between the primary care and specially is the amount of money involved. Frankly, primary care works very hard for enough money to cover expenses and maybe have a little bit left over for bonuses. Specialist can have business practices that can literally cost them tens of thousands of dollars and not realize it because their revenue to overhead ratio is so much higher. This, in effect encourages poor business practice and principles, as well as the maintaining the status quo. You have seen this first hand in your current practice. But how do you tell somebody who is making $3-400K per year that they are idiots? “so what if I left $20-30K on the table?” That is logic that is difficult to counter.

 

Anyway, back to work for me. Gotta pay for a Christmas party for about 40 people.

[jmj11]

I think the perception is much different in primary care as apposed to specialty practice. Since in primary care, the difference between what we do and what the docs do is very thin.

 

I think I know what you mean by the above . . . but then again I've heard this before and it may be another PA misconception. I think that PAs can mature in specialty practice to where there is a thin line or the PA can surpass the MD specialists in knowledge and quality of care. I do believe that there is actually a good niche for sub-sub speciality for PAs. I'm in a (Internet) group of about 10 PAs and NPs who are headache specialists.

 

Yes, I work in neurology. No, I don't know as much about Parkinson, MS, Seizures or dementia as my SPs. But I am learning. But I know far more about headache than they do. They send me headche patients if they can't manage them.

 

I knew a PA in OB/GYN who had a sub/sub speciality in sexual abuse, from a forensic stand point and from an emotional recovery standpoint. In her practice, if a patient had been raped, or sexually abused the OB/Gyns would say that the PA knew far more about it and have that patient see her.

 

Others out there may have other examples.

 

The challenges that I have, is that I do not know of another PA-owned speciality clinic. I do know of a couple of NPs who have their own speciality practices (no cords attached).

 

Mike

[jonasons]

Great Point.

Another great example, I don’t know Joe Monroe is a member here. But he used to be the only Derm in a large multispecialty clinic here in Vancouver WA for many years. Joe does a lot of lecturing, and if I am not mistaken was the driving force behind the Derm Specialty Association for PA's.

 

I used to work with a Doc that used to get so miffed if he sent someone to the specialty office and the saw a PA instead of the "real Doc". After a while, when he got tired of having to wait for months to get his patients in, he finally gave the PAs a chance. Finally started to realize, that they were getting the care and eval they needed, and didn't have to wait forever to get in.

 

Another example are the diabetic care specialists. I have seen PAs be the local DM specialist in IM groups were the docs would send their difficult to control Diabetics to the PA for fine tuning.

 

Back to the old question. How do we and do we really want to cut the cord. Professionally I think many of us would feel comfortable with it, but would it do more harm than good. One bad out come from a PA is not equal to one bad outcome from a real doc. So does that mean we have to be even better practitioners, or just better communicators?

 

On another current thread someone asked where the PA profession is going. This is where we are going if we are going to stay competitive with the NPs. The difference between us and them (the NPs) is we need to become more independent w/o threatening the Docs. The only way to do that is with their blessing. Otherwise, the same fierce independent battle that has both won and cost the NPs will alienate us with our MD/DO piers rather than ingratiate us.

 

More questions than solutions I am afraid.

[jmj11]

Scott, EMEDPA or any other Washington PA . . . I know that I've read somewhere about the SP must be in the practicing PA's office 10% of the time or "by other arrangement" but where is that stated? I've read through all the Washington State legislation about PA practice and it simple states that the SP does not have to be in the same site as the PA.

 

Thanks, in advance, Mike

[jmj11]

Questions for Bob

 

Okay, as someone who had been contemplating clinic ownership, I have several questions.

1. What was your motivation to do this? What do you personally believe are the right motives for tackling ownership?

2. What is your arrangement with MDs? Do you have an in-house MD that you hired, or do you contract with a sp?

3. I’ve heard of 2-3 PAs having a difficult time getting financing? What’s your story for financing?

4. Of the PAs that I personally know, who own their own clinics, a couple say that their income has fallen (since working as an employee) one, however, ended up selling his practice after five years for a huge profit. What’s your perspective? It appears on paper that I could do much better with my own clinic, paying my own expenses but . . .

5. I know when my clinic now (with two MDs and myself) moved, we had to start the insurance credentialing process all over and it took months. You mention taking a long time, but did any refuse to do business with you because you are PA-owned?

6. Did you have any opposition from local MDs? If so, were they able to throw any obstacles in your path?

Those are for starters.

My interest started because I love where I live and PAs here are paid far below what I was use to. However, when my SPs got word that I was leaving last spring, they suddenly came to the table with much more reasonable salary. Now my motivation is my philosophy of practice is very different from where I work. Our practice is Physician-centered. The docs show up an hour late. They do many things that are not customer-friendly (aggressive billing practices where many of my patients never received a bill until a collection agency came to visit them.) Our practices is also in the stone age as far as EMR. I had used them for years before coming here and I see a lot of waste of money. And lastly, I spend 90 minutes commuting each day. I would like to start a practice on my island where I could bike to work.

 

Mike

[EMEDPA]

Scott, EMEDPA or any other Washington PA . . . I know that I've read somewhere about the SP must be in the practicing PA's office 10% of the time or "by other arrangement" but where is that stated? I've read through all the Washington State legislation about PA practice and it simple states that the SP does not have to be in the same site as the PA.

 

Thanks, in advance, Mike

 

that is my understanding as well- 4 hrs/week unless by "special arrangement"

one of the facilities I work at in wa has pa's 24/7 and 8 hrs of day shift doc coverage/day on most days although occassionally a pa will fill a doc shift on days.

[jonasons]

Hi Mike,

Hope you're having good holidays.

 

First, on the 10% rule, I have done a bunch of searches but I also can’t find it. I did find something on the DO med licensing that requires 25% onsite supervision, but they have always had more stringent requirements than SPs that are MDs. I know I have read it, but I just couldn’t find it. Maybe an Urban Legend?

 

To your other questions.

 

1. For me it was part entrepreneurial and part arrogance, that I could build a better mouse trap. Heck, treat your staff and your patients right and the rest will take care of itself. (Mostly right). Honestly, I wanted to build a practice that recognized PAs as colleagues and "near" equals that didn't put limitations on how much I could earn. Too many practices have great relationships with their PAs, but they put ceilings on the amount you can earn. Case in point. A friend of mine had one of the busiest practices in a large FP group. With his bonus, he started making more than some of the lowest producing MDs. He would bring in over $400K to the low producing MD who was bringing in $300K. With bonus he should have made nearly $120K, but since that would have equaled the MD salary (who wasn’t making bonus because of low production) so they capped it. Didn't make business sense to me, pay a Doc $120K to bring in $300K but not pay a PA the same to bring in $100K more. It didn't take long for that PA to move onto greener pastures.

 

 

2. In my case, the MD is an employee with the option of partnership buy in after a year. This is the velvet rope philosophy; make it comfortable to stay but uncomfortable to leave. In the end, they will always have some level of control over you so it is prudent to always have a back up short term SP if needed.

 

3. Financing was a challenge because many banks didn't want to finance a PA facility exactly for the above reason. Honestly, for me, my landlord provided some angel financing as well as some leverage to the bank (which he sits on the Board of Directors. Not sure if I would have gotten it with out his quiet assistance.

 

4. As far as income, I do pay myself well, but I could probably do the same elsewhere without the HAs of ownership and management. In the end, having a salable asset will definitely be a plus. I have already been approach by one of the larger groups about a potential buy out. If the dollars are right, I would have a hard time saying no.

 

5. Credentialing was a long process, but as long as you can show the SP in the picture it was not a problem. Contracting is another story. Many of my contracts had to initially be signed by the doc rather than the owner. That is softening thought. Since my first year, I have signed every renewal w/o opposition.

 

6. I really had no opposition from the local Docs. I actually had a lot of assistance from the hospital because of the Health Care shortage of PCP in my area. That being said, the financial incentives that were originally promised never seemed to materialize.

 

In the end, the option to own a practice should not be about wanting to make more money. In my opinion, it should be about practice freedom and controlling your own sandbox. In my case, I took on a big chunk of responsibility because I started with three providers and 9 support staff. I now have 13 full time and 3 partime to support three and 1/2 providers. This year we are just shy of 15000 patient visits. The sucess breads more risk though. There is a lot more at risk than my personal fortune. The lively hood of all my staff and the 5000 patients that would be left wanting should I fail weighs heavily on me. It is this weight that is most people fail to factor when the decide just how much they are willing to risk. If I had to do it over, and if I didn’t have the restrictions of being a PA, having a single doc practice with 2 employees would be pretty refreshing. I could farm out the contracting, credentialing and billing and I wouldn’t have near the headaches and sleepless night. Maybe I am not quite the consummate entrepreneur that I thought.

[jmj11]

Hi Mike,

Hope you're having good holidays.

 

 

1. For me it was part entrepreneurial and part arrogance, that I could build a better mouse trap. Heck, treat your staff and your patients right and the rest will take care of itself. (Mostly right). Honestly, I wanted to build a practice that recognized PAs as colleagues and "near" equals that didn't put limitations on how much I could earn. Too many practices have great relationships with their PAs, but they put ceilings on the amount you can earn. Case in point. A friend of mine had one of the busiest practices in a large FP group. With his bonus, he started making more than some of the lowest producing MDs. He would bring in over $400K to the low producing MD who was bringing in $300K. With bonus he should have made nearly $120K, but since that would have equaled the MD salary (who wasn’t making bonus because of low production) so they capped it. Didn't make business sense to me, pay a Doc $120K to bring in $300K but not pay a PA the same to bring in $100K more. It didn't take long for that PA to move onto greener pastures.

 

This is the kind of stuff (the negative experience stuff) that has driven me crazy over the years. I've seen several practices bite the dust, break up etc. because they were doctor-centered. The docs treated the front staff like they were "untouchables" from Mumbai--working them to death, treating them with dis-respect and paying them so low that they are perputually looking for a new job. So many times I've seen the same thing, like you've mentioned where hard working PAs are capped.

 

I took a job in Marquette, Michigan about 15 years ago where I was to be paid on a nice productivity pay (33%).PA before me had earned 10K extra. I worked like a dog because I had seven dependents. I was expecting a much larger bonus . . . then the docs decided to "do away" with the bonus because if they had paid me according to the plan, I would have made 120K, which "no PA deserves to make." However I brought $360K into the practice. Of course I left. It just does not make good business sense and when will they learn?

 

I would love to have a practice were I find the best support person or persons that I can find (they can make or break a practice) and make it the best job of their life. I would treat the front staff, the janitor, the same way that I would the local neurosurgeon . . .with respect.

 

I had the opportunity to work in the same office as one such good doc (he was Ob/Gyn and I did not work for him. He treated the women at his front desk like saints. They would die for him. They made his practice a great success.

 

Happy New Years!!! I'm off to a family-oriented party. It's great to party with your 4 teenagers!

 

Mike