PA owned practices?

[jonasons]

You do make a good point. My view is that of a primary care so all my experience is from that perspective.

You are also right in that you have no right to a contract. That being said, if an insurer denies to issue a contract solely on the grounds of it being owned by a PA, when state laws and Medicare laws allow it, I would think that would leave them out there hanging.

Anyway, it is a fun argument. Sometimes a bit of saber rattling from the profession may go a long way (problem is predicting which way it will take us!)

[Guest saffy]

I am thinking of starting up a cash based clinic in Texas, but have no idea if I can own it and work in it at the same time (see patients). Does anyone have any information on how this works? Texas state medical board online has absolutely no information on the legalities. If I can't have full partnership, can I have my husband be the remaining part?

 

Been working for 10 years as a PA now and want to work for myself! Any help would be appreciated.

 

Lara Merritt PA-C

[jonasons]

I am thinking of starting up a cash based clinic in Texas, but have no idea if I can own it and work in it at the same time (see patients). Does anyone have any information on how this works? Texas state medical board online has absolutely no information on the legalities. If I can't have full partnership, can I have my husband be the remaining part?

 

Been working for 10 years as a PA now and want to work for myself! Any help would be appreciated.

 

Lara Merritt PA-C

 

Typically the limiting factor is not your state, but either Medicare (CMS will only allow a PA to own 99%, but the spouse can own the other 1%). Insurers in your area are sometimes an issue, but you can answer that by contacting their provider relations or contracting department. If they tell you that they cant contract with a PA owned practice, ask for their policy in writing. Many times that will open the door.

If you want to do a cash only clinic (and let them submit their own bills for reimbursement) then neither should be an obstacle. Your only challenge is finding supervising doc, and your malpractice insurance.

By the way, with your last post on not wanting to work full time, are you sure this is the best option. You will have at least two other mouths to feed (employees) if you go out on your own. Then the billing, posting, payroll etc. Lots of other stuff that a paycheck earner doesn't have to think about. Not trying to be judgmental, but the grass ain't always greener on the other side.

Good luck.

 

Scott

[True Anomaly]

I am thinking of starting up a cash based clinic in Texas, but have no idea if I can own it and work in it at the same time (see patients). Does anyone have any information on how this works? Texas state medical board online has absolutely no information on the legalities. If I can't have full partnership, can I have my husband be the remaining part?

 

Been working for 10 years as a PA now and want to work for myself! Any help would be appreciated.

 

Lara Merritt PA-C

 

Right now in Texas PA's cannot be majority owners of a clinic. I believe they can own the building and the supplies, but not the charts.

 

As far as your husband owning the rest of it....as long as he's a physician he can. Otherwise, non-physicians owning a medical practice could amount to "practicing without a license". There is currently a lawsuit brought by the American Academy of Emergency Medicine against a corporation trying to take over several ER physician contracts in Texas- the suit is alleging that a non-physician entity owning these contracts boils down to- again- practicing w/o a license.

 

But, laws can be changed....and certainly the Texas Academy of PA's would always appreciate help and advice on this matter.

[coloradopa]

Right now in Texas PA's cannot be majority owners of a clinic. I believe they can own the building and the supplies, but not the charts.

 

As far as your husband owning the rest of it....as long as he's a physician he can. Otherwise, non-physicians owning a medical practice could amount to "practicing without a license". There is currently a lawsuit brought by the American Academy of Emergency Medicine against a corporation trying to take over several ER physician contracts in Texas- the suit is alleging that a non-physician entity owning these contracts boils down to- again- practicing w/o a license.

 

But, laws can be changed....and certainly the Texas Academy of PA's would always appreciate help and advice on this matter.

 

Look at the way the state law works in your states. In Colorado PAs cannot be part of a PC that owns a practice but they can own up to 99% of an LLC that owns a practice. The common method is to own the LLC then hire the physician through the LLC. Most states prohibit the PA from directly hiring the physician but allow a PA owned company to hire the physician (didn't say that it made sense).

 

David Carpenter, PA-C

[Guest saffy]

Thanks all for the response. I know someone who can be my SP and medical director, an office manager, two front people and an M.A. I also have an accountant (family member) to help with the books. I also have two other PA's interested in working part time at the clinic. My effort in this would be to work two days out of the week seeing patients, then the rest a few hours a day managing the business. Most of the management though I would delegate to the office manager. It may not pay in the long run...but I would like to try.

 

I wasn't sure if I could out right own it or had to form an LLC. So does anyone know for sure in Texas if I can go the LLC route and own 99%? Just wondered if anyone else here on this board in Texas owns their own clinic and how they did it. And no, my husband is not a physician so him owning 51% will not work.

 

I am just tired of working for people who do not give a crap about me or their employees.

[Contrarian]

The LLC is "formed" and you are a "member"... NOT owner...

[Guest saffy]

The LLC is "formed" and you are a "member"... NOT owner...

 

I am still researching all this........thanks for the clarification. :confused: :)

[Contrarian]

Limited liability, meaning that the owners of the LLC, called "members," are protected from liability for acts and debts of the LLC.

 

The distinction seems to be... the LLC is a separate "Distinct" entity. The "members" are separate entities, but usually "employees." If the LLC is sued and held liable... it is the LLC that pays. The LLC can be sued into bankruptcy. The members may be sheltered (if the "corporate veil" is maintained).

 

A Professional Limited Liability Company (PLLC or P.L.L.C.) is a limited liability company organized for the purpose of providing professional services. Usually, professions where the state requires a license to provide services, such as a doctor, chiropractor, lawyer, accountant, architect, or engineer, require the formation of a PLLC. Exact requirements of PLLCs vary from state to state.

 

http://form-a-corp.com/professional_corps.php

[Guest saffy]

Limited liability, meaning that the owners of the LLC, called "members," are protected from liability for acts and debts of the LLC.

 

The distinction seems to be... the LLC is a separate "Distinct" entity. The "members" are separate entities, but usually "employees." If the LLC is sued and held liable... it is the LLC that pays. The LLC can be sued into bankruptcy. The members may be sheltered (if the "corporate veil" is maintained).

 

A Professional Limited Liability Company (PLLC or P.L.L.C.) is a limited liability company organized for the purpose of providing professional services. Usually, professions where the state requires a license to provide services, such as a doctor, chiropractor, lawyer, accountant, architect, or engineer, require the formation of a PLLC. Exact requirements of PLLCs vary from state to state.

 

http://form-a-corp.com/professional_corps.php

 

You are a gem, thank you for the info and link! :)

[Guest chrisw.vamp]

We're working on establishing Physician-owned clinics where PA's can be part owners. A Texas chain of physician-owned business' where the physician not only participates as a partner, but will receive their initial investment back in 14 months, and 3x that original investment at 24 months. Email me at chrisw.vamp@gmail.com if interested. The ROI is pretty attractive.

[coloradopa]

Thanks all for the response. I know someone who can be my SP and medical director, an office manager, two front people and an M.A. I also have an accountant (family member) to help with the books. I also have two other PA's interested in working part time at the clinic. My effort in this would be to work two days out of the week seeing patients, then the rest a few hours a day managing the business. Most of the management though I would delegate to the office manager. It may not pay in the long run...but I would like to try.

 

I wasn't sure if I could out right own it or had to form an LLC. So does anyone know for sure in Texas if I can go the LLC route and own 99%? Just wondered if anyone else here on this board in Texas owns their own clinic and how they did it. And no, my husband is not a physician so him owning 51% will not work.

 

I am just tired of working for people who do not give a crap about me or their employees.

 

My advice for what it is worth is to find out the answer from a lawyer versed in medical practice. This is something that you want to find out is not allowed after you have taken the loans out. Also you should work with a professional to develop a business plan to see if this is a viable business under realistic prospects. There are plenty of physicians (much less PAs) that have gone under by not understanding all of the factors in running a business.

 

Overhead and the lag on initial billings (ie insufficient capitalization) are the number one cause of initial business failure. For example if you have four staff for a small office you may not be able to generate enough overhead. That is why a realistic business plan is essential.

 

David Carpenter, PA-C

[Contrarian]

You can buy Business Plan Pro... (Cost- $200)

 

Follow the software program and complete a business plan. This software performs all of the basic and complex business calculations automatically based upon your responses to questions. The software also gives you access to business prose, and actual business plans that were previously written. The software allows you to change the "assumptions" on the fly so that you can see what minor differences in your performance/expectations will do to your "bottom line." (Costs- whatever your time is worth)

 

Then get some help from SBA-SCORE. (Cost- Free)

 

Then get some help from a professional business planner. (Cost ~ $600- ~$1,500 based upon how much you have done in #2).

 

It is true that insufficient "Capitalization" is the killer of dreams...

 

You can mitigate this by remaining "slim" in the beginning. To make this work, you only really need:

2 Docs (contracted as your SP. 2 because if 1 gets sick, moves, dies, etc you can still operate)

A receptionist/MA (hopefully a relative)

2 PAs (You and a fill in when you need down time)

2 (8x10) exam rooms with exam tables, sinks, B/P cuffs, etc.

3 computers and internet service (4 plus a tablet if you are going to use a EMR. also someone comfortable with computers)

A billing and coding program or service

2 phone and 1 fax line (Cable/VOIP works well)

Stationary

Signage

Malpractice, Business, Health, Disability insurance ($$$)

Healthcare Insurance contracts (BC/BS, Aetna, Medicare/Medicaid, etc)

Enough money in the bank account to cover ALL expenses (including salaries) for at the very least 9 months)

 

 

See... easy...!!!:rolleyes: ;)

 

Contrarian

 

btw... Disclosure: I have NO financial interest in Palo Alto Software.

[jmj11]

Important new developments for some. This is copied from Dave Mittman.

 

AAPA Wins A Decisive Legal Victory

The Centers for Medicare and Medicaid Services (CMS) has dropped its legal challenge to the ability of PAs to hold ownership rights in legal entities, such as corporations, that bill for Medicare services. On behalf of the PA profession, AAPA submitted a "friend of the court" brief in a case involving a PA in New Jersey with majority ownership in a limited liability company. The PA sought to enroll the practice in Medicare, and the local carrier denied the application. An October 30 letter from CMS to the administrative law judge stated that, upon further review, CMS made an error in denying the PA's application.

[jonasons]

Yahoo! Let here if for the good guys.

 

Times continue to change and evolve for the good of the profession.

 

Scott

[SurgPA05]

Ok a few comments/questions.

 

I'm in the middle of setting up my own contracting service for surgical assist services. How have all of the PA owned clinics been billing for Medicare up to this point if Medicare just recently said they would grant a group number to a PA owned practice?...or is this a false assumption on my part and they in fact have been giving group/practice numbers to PA owned practices and this was simply an individual case where a local carrier denied the application and it brought the issue to light.

 

I'm curious about this because as we all know Medicare will only provide dispersement for PA services to the PA's employer (a ridiculous situation that the NPs and CNSs don't have to worry about) So my understanding is that we have to create entities (PC, LLC, S-Corp etc.) and list ourselves as employees and set up all of the W2 and federal/state tax withholdings and quarterly witholdings so that on paper our employer, which is our business can then legally bill and receive dispersement. So if that is true i restate my question........if Medicare has just recently approved group/practice numbers for PA owed practices......how have PAs been receiving payment from Medicare up to this point if it is illegal for PAs to receive payment directly from CMS?

[jonasons]

CMS changed the law in April 2002 (I think), that stated PA's could own up to 99% of the company. It doesn't say who needs to own the other 1%. In my case, my wife owns the other 1%.

[SurgPA05]

My question is not how the ownership of the business is structured but how PAs who own their practice have been legally receiving payment from Medicare if a PA cannot receive Medicare payments directly and Medicare just recently ruled to allow a PA owned business to receive a group number which would allow that practice to bill on behalf of the PA?

[coloradopa]

My question is not how the ownership of the business is structured but how PAs who own their practice have been legally receiving payment from Medicare if a PA cannot receive Medicare payments directly and Medicare just recently ruled to allow a PA owned business to receive a group number which would allow that practice to bill on behalf of the PA?

PAs have been receiving payment since 1998. While the payments must be assigned to the practice the practice does not have to be owned by a physician (that was removed in 2002). The issue that the AAPA dealt with was one particular carriers refusal to assign benefits to a PA owned clinic. This has been a problem in other states that do not have an appropriate LLC or PC law for PAs. Here is an excerpt from AAPA:

"A PA in New Jersey sought to have his majority-owned limited liability company (LLC) enrolled in the Medicare program. Ninety-nine percent of the LLC is owned by the PA and one percent by a physician.

 

The local Medicare carrier denied the application, and the PA filed an appeal. The carrier again denied the PA’s application. The PA then appealed to the Department of Health and Human Services’ Departmental Appeals Board, which entailed an administrative law judge hearing the case and making a determination.

 

An attorney representing CMS filed a memorandum of law brief outlining why

he believed the PA was not entitled to have ownership rights. Some of the concerns expressed by the attorney were whether appropriate physician supervision would be in place, if the LLC had to be a group practice, and whether the LLC was acting as a leasing agency.

 

AAPA submitted an amicus curiae (friend of the court) brief on behalf of the

PA profession in support of the ability of PAs to have corporate ownership interests. An October 30 letter from the attorney representing CMS to the administrative law judge stated that, upon further review, CMS made an error in denying the PA’s application. The local carrier has been instructed to enroll the PA’s LLC."

 

The important part here was that while many PAs had owned practices and received Medicare assignment, there had never been an official CMS declaration on when it was appropriate for a PA to own the practice. The CMS also had never opposed ownership also. After the AAPA filed there friend of the court brief, CMS changed their mind (accompanied by some effective briefing of higher level CMS officials by AAPA). This means that CMS has now officially acknowledged that PAs can own clinics. The exact type of practice under state law is still a little unclear.

 

The one issue with PA 1st assist is that I am not sure that assist fees are assignable to the PA corporation. The PAs that do this assign the fees to the surgeon then the money is forwarded to the PA. You would have to talk to a lawyer versed in PA reimbursement to be sure. Michael Powe would also probably be able to answer your question.

 

The other issue that you should be aware of is that some hospitals are moving toward assists (PA, NP, RNFA, or SA) having to be W-2 employees of either the hospital or the practice because of accountability issues that have come up in some ORs. This seems to be a regional issue.

 

David Carpenter, PA-C

[jmj11]

I wanted to share an excellent Podcast by our own Michael Gerchufsky(from ADVANCE for PAs) on the AMA's view of PA-owned practices.

[Prospective PA]

That was a good podcast! I think it all comes down to Physician Ego Syndrome (PESsimistic)! LOL

[wolffkelly]

Greetings to the forum! I have just left the field of finance, to become a PA. I decided this inside MD School/ because of restraints in my life. But, I respect the PA Profession. I'm gald you PA's want to open your own Practice! I wanted to put in some of my expert business knowledge. ok,... By definition a business(practice) is an artificial entity/person. If medicare send money to the practice, it is the practice(entity) who is receiving the check, NOT the PA. Also, your business structue , is important as well, I.E C, S,LLC . C-corp is best. LLC and is common for practices, but, are not considered entities by most states, which, would mean the PA's ARE collecting the checks! also, sidebar, when i finish PA school, if anyone is intested i'm in the northeast, I would love to start a practice and use my years of business knowledge.

[TXRugby]

I haven't read through all the pages of this thread - but I just have to ask - what would be the benefits of opening your own practice? Are the hours going to be any more flexible? Can you really expect that much more income in a year?

 

I know that running your own business in the business world vs working for someone else is usually profitable, albeit risky. Can this really be applied to medicine? Specifically, for PA-C's.

 

I am a former Engineering major and am strongly considering going the Physician's Assistant route. I am enrolling in an EMT program next month. I'm excited, not something I felt so much when looking at my roster of classes for Engineering.

[jmj11]

I haven't read through all the pages of this thread - but I just have to ask - what would be the benefits of opening your own practice? Are the hours going to be any more flexible? Can you really expect that much more income in a year?

 

I know that running your own business in the business world vs working for someone else is usually profitable, albeit risky. Can this really be applied to medicine? Specifically, for PA-C's.

 

I am a former Engineering major and am strongly considering going the Physician's Assistant route. I am enrolling in an EMT program next month. I'm excited, not something I felt so much when looking at my roster of classes for Engineering.

 

It is an individualized (or heterogeneous) situation. What I mean, the reasons are different for different people. in many professional environments I wouldn't dream of trying to own my own practice because of the risks and hassles. However, right now I am attempting to do so one last time. I will share some of my reasons:

 

1) I love where I live and would not move for any amount of money, except for maybe a house on the coast of Italy.

 

2) I've spent most of my career (29 years) in one sub specialty, so to find another job here would be difficult and a steep learning curve.

 

With that said, I will add;

 

3) My present SPs are about a 5 on a 1-10 scale. They live in their own world and I in mine. That gives me a lot of autonomy in practice but no influence in business decisions. I've watched them make, and continue to make horrible business decisions. They have alienated much of the patient base. One of many examples is that they always come to work an hour or more later than their first patient is schedule. Also, a few years ago, when they had a shortage of money, they instantly turned all patients over to a collection agency for quick payments. Most of the patients had never received a bill and then they were being threatened by a collection agency.

 

4) I know my field very well and there is a gold mine of patients waiting to be sceen. Due to business decisions (no marketing, no published phone numbers, no Yellow Pages presence, no web page etc.) most of this market remains untapped.

 

I will stop there. I will work harder if I own my own practice and there is no doubt about that. I may also go insane or bankrupt. But, at least I know I had tried to do things better.

[rlwpac]

Does anyone have experience with owning a practice not associated with insurance?