Private Practice Olio

[smalltownpsych]

Are there any rules of thumb for how much you actually make in a private practice? Like let's say you net 200k a year...

I think if you net 200k, then you make 200k. Then you gotta pay the taxman. If you meant gross, then it really depends on what your expenses are. It gets a little confusing too since I pay myself a salary and then other “expenses” that are personal such as insurance and IRA and HSA.

At this point, I tend to look at everything month to month. 20k a month minus rent, utilities, website, EHR, credit card fees, office supplies, and the big one…employee salaries. Maybe 5k for my situation for next month, so I make 15k x 12 = 180k. Maybe even as much as 7k so 150k. 50k of that is being paid to me in salary so then I would have at least 100k that I wouldn’t have to pay all the taxes on. Some of that I will take out to pay personal bills and just spend which will be counted as income. Some of it will be going to invest in stuff I mentioned above. I also want to build up some in the business I think so I can invest in growth. Typical private practice would probably not think about the growth part as much.

Also, I made almost zero dollars in Dec. through February and then 5k, 8k, 10k, 11k. So a real accounting has to account for that period of time, and the capital investments during that time too. In other words, I have no idea how much I will have made until it all washes out at the end of the year. I just know that I have positive cash flow, increasing revenue, and I have about 8k in business credit card debt that I will probably take care of sooner rather than later and most importantly can pay my own personal bills. Fortunately, we haven’t been spending much because all we do right now is work. Now next year, if all goes well, will be even more complicated.

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[WisNeuro]

Are there any rules of thumb for how much you actually make in a private practice? Like let's say you net 200k a year...

If you net 200k, as STP said, that's how much you make. How much you take home after taxes is variable. If you're an LLC taxed as an s-corp, depends on how much you pay yourself as a reasonable salary, subject to payroll taxes vs. how much you pay yourself as owner out in dividends.

 

[AcronymAllergy]

If you net 200k, as STP said, that's how much you make. How much you take home after taxes is variable. If you're an LLC taxed as an s-corp, depends on how much you pay yourself as a reasonable salary, subject to payroll taxes vs. how much you pay yourself as owner out in dividends.

And to add to this, overhead can vary pretty substantially from one practice to the next, depending on things like whether you have any employees, whether you need to buy things like testing supplies, and whether you have a physical office vs. work from home 100% virtually. As a gross estimate, and others can chime in here, I think 20-30% overhead could possibly help you plan things out such that you hopefully wouldn't be underestimating your expenses. Although again, that could vary based on how much you bring in (e.g., if you only bring in $30k for the year, you may need to spend much more than 30% of that for overhead). If you're a solo practitioner with a very small footprint, it could be much less.

 

[WisNeuro]

And to add to this, overhead can vary pretty substantially from one practice to the next, depending on things like whether you have any employees, whether you need to buy things like testing supplies, and whether you have a physical office vs. work from home 100% virtually. As a gross estimate, and others can chime in here, I think 20-30% overhead could possibly help you plan things out such that you hopefully wouldn't be underestimating your expenses. Although again, that could vary based on how much you bring in (e.g., if you only bring in $30k for the year, you may need to spend much more than 30% of that for overhead). If you're a solo practitioner with a very small footprint, it could be much less.

Definitely true, as to BB's post, I was assuming he was talking about his income after paying for overhead, otherwise we're mis-uing the term net. But yeah, I'd say that's a good estimate for overhead, I've swung a few good deals, so my overhead is lower than that at the moment, but that is definitely not the norm.

 

[borne_before]

Yeah I think I meant gross.

 

[WisNeuro]

Yeah I think I meant gross.

Ah, that's a different story. Need to subtract overhead any other deductible expenses to find your net. AA gave a rough guideline, but you can bring that percentage down depending on how you do things. Such as, not having a billing company take a large chunk o yo ****.

 

[smalltownpsych]

And to add to this, overhead can vary pretty substantially from one practice to the next, depending on things like whether you have any employees, whether you need to buy things like testing supplies, and whether you have a physical office vs. work from home 100% virtually. As a gross estimate, and others can chime in here, I think 20-30% overhead could possibly help you plan things out such that you hopefully wouldn't be underestimating your expenses. Although again, that could vary based on how much you bring in (e.g., if you only bring in $30k for the year, you may need to spend much more than 30% of that for overhead). If you're a solo practitioner with a very small footprint, it could be much less.

20-30% sounds low to me, but then again we chose a prime spot and strategy is to go big or go home. My biggest expense so far has been rent and since me and my wife have been the free labor we’ve been keeping it at about 30%. The next move will be office support and that will be more expensive and that could take me up to 40%. We had to get our revenue to a point where we could justify the additional expense. Capital expenditures such as testing and office furniture can be factored in different ways depending on accounting stuff. I put about 8k of it on a card so I can just factor whatever the payments are until that is paid off. I‘ll let the details be worked out by the finance folks.

One key point that AA made, I believe, is that at different levels of scale those numbers will flux. I also think that you have to factor some of this into your planning. My investment in office personnel will help me spend more time generating more revenue and the percentage is less an issue then. For example, when I brought in 10k and expenses were 30% then I make 7k, at 20k and 40% I make 12k. Rent and one full time office staff is a pretty fixed expense
and I could potentially get revenue up to 30k with that setup and then it would be only about 20%.

 

[smalltownpsych]

Update. Hired two part time office staff so now have someone there pretty much every day. My personal gross revenue will be a little over10k so that’s continuing to go up, the practice billed 25k although about 8000 is actually a pre-payment for August. Going forward, I have monthly billed clients for about 10k a month and I should be able to bill around 10k with fee for service clients. Interns and psych nurse will add about 1k in net revenue and that should grow a bit over time. I know that summer is typically a little slower so am hopeful for continued growth. Hoping to get a few more comprehensive care clients because that can be really profitable and effective and the direction I am heading. Not marketing that aspect yet, just getting what comes my way from connections. I think over the next few months the business bank account will continue to grow. Also, just ordered a WISC because I got a testing client. I am actually waiting for a paying client to show up before I order the test. Got an MMPI last month. Maybe next month I’ll need a WAIS.

So finances are a little confusing but it looks like about 20k in revenue after paying NPs cut and about 7k in expenses. 5k for my pay and that leaves about 8k to start growing bank account. Except, I probably need to realistically take 5k of that out for “income” and begin paying back the personal loan/investments. I think we put in 20k to start and then added another10k in the second month. Current expenses are pretty fixed so if revenue increases over the next couple of months, that will be good because I think we are just turning the corner into profitability.

 

[foreverbull]

For those who switched from sole proprietorship/partnership to S-corp, at what income level does it benefit you to switch?

How much more admin work and fees are there in an S-corp vs. proprietorship/partnership (the latter after setup requires no paperwork other than maintaining income/expense/deductions records)?

Does it involve a bunch of new paperwork with existing business accounts as well (ie banking)?

Just weighing my options. Partnership has worked fine for me, but I wonder if I’m paying more taxes as a pass-through rather than having a corp with a payroll.

Of course there is the issue of personal liability without the corp shielding you, but that’s why we buy malpractice insurance and is relatively rare (for lawsuits in general at ~2% of psychologists last I saw, then on top of that, exceeding the million+ would be very unlikely in an ethical practice) so I’m not sure that that is enough of a reason for the burden of changing over.

 

[WisNeuro]

For the S-Corp election, really depends on your net levels and what your current taxes are like. It's definitely worth it to sit down with your Tax person to look at what this looks like for your personal situation and actually run the numbers at several different levels of net income. Also, how low of a salary can you "reasonably" pay yourself to leave the rest of the net profits out of payroll taxes.

My additional admin fees are pretty minimal. Taxes are similar, but I personally know my tax guy. I pay for a payroll service, which is petty cheap on monthly. If you're savvy, you can do it your self with software, it's just not worth my time to do so vs. the cheapness of having someone do it for me. Electing it is pretty much as easy as choosing a date and filing some paperwork with the IRS.

But yeah, I'd just schedule a sitdown with a tax professional and bring in your current numbers.

 

[PsyDr]

Protip: IRS form 2553.

*You owe me.

 

[WisNeuro]

Protip: IRS form 2553.

*You owe me.

Also, you should hear back and get confirmation about this. If you don't have that confirmation, chances are, didn't get filed.

 

[smalltownpsych]

For those who switched from sole proprietorship/partnership to S-corp, at what income level does it benefit you to switch?

How much more admin work and fees are there in an S-corp vs. proprietorship/partnership (the latter after setup requires no paperwork other than maintaining income/expense/deductions records)?

Does it involve a bunch of new paperwork with existing business accounts as well (ie banking)?

Just weighing my options. Partnership has worked fine for me, but I wonder if I’m paying more taxes as a pass-through rather than having a corp with a payroll.

Of course there is the issue of personal liability without the corp shielding you, but that’s why we buy malpractice insurance and is relatively rare (for lawsuits in general at ~2% of psychologists last I saw, then on top of that, exceeding the million+ would be very unlikely in an ethical practice) so I’m not sure that that is enough of a reason for the burden of changing over.

I started out as s-corp so not sure if there is much involved. I don’t really think so although I am supposed to have some meetings and stuff to meet the requirements of a corporation. The meetings happen all the time, just not good at documenting them. Also, articles of incorporation and bylaws or some such I’m supposed to follow. I really need to meet with my accountant again who helped set up the corporation and knows a lot more about this stuff than I do.

 

[AcronymAllergy]

For the S-Corp election, really depends on your net levels and what your current taxes are like. It's definitely worth it to sit down with your Tax person to look at what this looks like for your personal situation and actually run the numbers at several different levels of net income. Also, how low of a salary can you "reasonably" pay yourself to leave the rest of the net profits out of payroll taxes.

My additional admin fees are pretty minimal. Taxes are similar, but I personally know my tax guy. I pay for a payroll service, which is petty cheap on monthly. If you're savvy, you can do it your self with software, it's just not worth my time to do so vs. the cheapness of having someone do it for me. Electing it is pretty much as easy as choosing a date and filing some paperwork with the IRS.

But yeah, I'd just schedule a sitdown with a tax professional and bring in your current numbers.

Seconded. I don't know if there's a hard-and-fast number for everyone, although there will be for you with respect to what they cost vs. what you'd save in taxes. The best way to be sure is just to sit down with a CPA. If you don't have one already, often the first time you meet with one you're considering hiring will be somewhat brief but free.

When I was still employed full-time elsewhere, the CPA I spoke with suggested the break even number with them for a side-gig would've been somewhere around $70k, IIRC; below that, and they said just stick with pass-through sole-proprietorship and file everything on my regular W-2. But it was a short conversation, so I'm sure there were numerous variables I was missing.

 

[WisNeuro]

Seconded. I don't know if there's a hard-and-fast number for everyone, although there will be for you with respect to what they cost vs. what you'd save in taxes. The best way to be sure is just to sit down with a CPA. If you don't have one already, often the first time you meet with one you're considering hiring will be somewhat brief but free.

When I was still employed full-time elsewhere, the CPA I spoke with suggested the break event number with them for a side-gig would've been somewhere around $70k, IIRC; below that, and they said just stick with pass-through sole-proprietorship and file everything on my regular W-2. But it was a short conversation, so I'm sure there were numerous variables I was missing.

Yeah, I've seen and heard 70-80k thrown around for when the S-corp election should be considered. So, essentially anyone working FT or mostly FT should be above this number at this level.

 

[smalltownpsych]

Update. We just ran our first payroll. Apparently everyone got paid so 5 months after opening and almost a year after first starting this process, we are a real fledgling company with actual employees. I am pretty sure we are in the black, but my accounts payable person (aka, spouse and business partner) is a little busy with her other full-time job. She got a raise today from that boss because I think he is worried that I'll steal more of her time. He probably doesn't need to worry because we haven't paid her anything at all so he is way ahead of the game. I think she is just happy that I haven't bankrupted us. I am hoping that we can actually make it worth her while down the road. The amount of time, effort, and stress is going to be quite a bit to make up for. Heck, she already had to help support me while I was a starving student. I better not remind her of that part just now.

 

[smalltownpsych]

Hit the six month mark and the company bank account increased by 4K month over month. Next month I am conservatively projecting about 25k in revenue with 18k in expenses so bank account should grow again. I think I need to draw about 5k in addition to the salary that is already factored in to get back to what I was making in prior job so next month it looks like I should hit that mark. One of the new interns billed 1400 last month so am pleased about that. Almost makes up for my 700 dollars worth of supervision hours per month. 😉
Its all about investing in their potential and building a solid team for the next steps.

 

[smalltownpsych]

October update
My projection from last month was on the mark. 25k in billing. My Psych NP quit so that was kind of a negative. However, that 25k projection was factoring in about 3-4K in billing from her and she only billed 450 before she bailed. So my billing from therapy and mentoring services was better than expected and my expenses will be lower since about 3k would have gone to her. On Monday I will be able to total up the expenses for the month and also see where the bank account total lands. Interviewing a couple of Psych NPs but am beginning to think that I might not want to deal with that anymore and that I might not need to. Besides, like I told one of my interns, psychotherapy and psychosocial rehabilitation is more important than medications anyway so maybe we just focus on that.

 

[neurotic_cow]

I am sure this has been discussed ad nauseam but nothing has popped up with my searches, so please forgive me! I am seriously looking at making the jump from an AMC setting to private or group practice. What is a fair pay agreement/split specific for neuropsych? Any advice would be greatly appreciated!

 

[medium rare]

I am sure this has been discussed ad nauseam but nothing has popped up with my searches, so please forgive me! I am seriously looking at making the jump from an AMC setting to private or group practice. What is a fair pay agreement/split specific for neuropsych? Any advice would be greatly appreciated!

Are you wanting to do self-pay or insurance?

 

[neurotic_cow]

The practices I’m looking into do a combo of both. I’m primarily geriatric focused and both practices REPORTEDLY have a good referral base for dementia evals with about a 50/50 split of self pay and insurance for those. I say reportedly because I have trust issues from my current bait and switch employment situation.

 

[Pragma]

The practices I’m looking into do a combo of both. I’m primarily geriatric focused and both practices REPORTEDLY have a good referral base for dementia evals with about a 50/50 split of self pay and insurance for those. I say reportedly because I have trust issues from my current bait and switch employment situation.

I’ve never taken below 70% but it was always part time and awhile ago. I’ve heard 60 thrown around as a number.

 

[medium rare]

I would recommend you find space to rent or sublet for yourself and get paneled on the insurances you want to be on. Ask around about which area insurances pay the best and are easiest to work with. While you are waiting for those to be approved, get yourself set up with whatever EMR you want to use and learn it fluently (or old school paper charts - whatever you prefer).

Start getting the word out that you will be accepting referrals beginning at the date you choose and let PCPs, neurologists, psychiatrists, sleep medicine, other psychologists and neuropsychs, therapists, local academics know you have immediate availability. Let your state and local psych associations know as well. Seriously, the demand is so high that you don’t even have to meet these people in person, necessarily. Just email, phone calls, a one-page brochure about your practice will get you referrals. As long as you do a decent job, you will continue to get referrals and be busy sooner than you think.

You don’t need to let another practice take a percentage of your income when it’s doable enough to get your own practice established. It may take a bit longer than joining an established practice but will be worth it, IMO. The fact that you will have immediate availability will make you appealing as you start out. I don’t do testing and I frequently get calls inquiring if I know anyone who can/does and I’m always looking for new, competent folks to refer to.

If you absolutely feel you need to join a group, I would not agree to less than a 70/30 split. And, do not sign a non-compete.

 

[neurotic_cow]

I would recommend you find space to rent or sublet for yourself and get paneled on the insurances you want to be on. Ask around about which area insurances pay the best and are easiest to work with. While you are waiting for those to be approved, get yourself set up with whatever EMR you want to use and learn it fluently (or old school paper charts - whatever you prefer).

Start getting the word out that you will be accepting referrals beginning at the date you choose and let PCPs, neurologists, psychiatrists, sleep medicine, other psychologists and neuropsychs, therapists, local academics know you have immediate availability. Let your state and local psych associations know as well. Seriously, the demand is so high that you don’t even have to meet these people in person, necessarily. Just email, phone calls, a one-page brochure about your practice will get you referrals. As long as you do a decent job, you will continue to get referrals and be busy sooner than you think.

You don’t need to let another practice take a percentage of your income when it’s doable enough to get your own practice established. It may take a bit longer than joining an established practice but will be worth it, IMO. The fact that you will have immediate availability will make you appealing as you start out. I don’t do testing and I frequently get calls inquiring if I know anyone who can/does and I’m always looking for new, competent folks to refer to.

If you absolutely feel you need to join a group, I would not agree to less than a 70/30 split. And, do not sign a non-compete.

As much as I would love to do that, I am fresh out of postdoc and have essentially zero capital with which to set something like that up. And what little I do have saved, I have been putting away so I can hopefully afford to buy a home, though that’s getting further and further out of reach. I need to do my research on how to open something like that before jumping in head first. My current employment situation is not good, and I need an exit strategy. Unfortunately I live in a rural area and there are no other hospitals around, which is why I’m looking into already established practices semi-nearby so that I can jump ship and still be able to support myself while I figure out my next moves (setting up my own practice). I would consider moving out of state to work at a different AMC or something, but my partner has said if that’s what I want to do, I’ll be going alone.

TLDR: I need a different job and the only option I have right now is to join already established practices.

 

[WisNeuro]

Agree with others, 50/50 is a complete non-starter. Even early in my career I wouldn't have touched 50/50. At this point in my career, anything below 70/30 would be an instant no from me. But, at the end of the day, it comes down to leverage. It looks like in your situation, if you don't want to open up your own PP, your leverage is pretty much non-existent.

 

[medium rare]

As much as I would love to do that, I am fresh out of postdoc and have essentially zero capital with which to set something like that up. And what little I do have saved, I have been putting away so I can hopefully afford to buy a home, though that’s getting further and further out of reach. I need to do my research on how to open something like that before jumping in head first. My current employment situation is not good, and I need an exit strategy. Unfortunately I live in a rural area and there are no other hospitals around, which is why I’m looking into already established practices semi-nearby so that I can jump ship and still be able to support myself while I figure out my next moves (setting up my own practice). I would consider moving out of state to work at a different AMC or something, but my partner has said if that’s what I want to do, I’ll be going alone.

TLDR: I need a different job and the only option I have right now is to join already established practices.

Don’t sell yourself short. I started private practice right out of postdoc with minimal capital. Ask around, you can probably find an office to sublet a half-day to a day/week to begin for minimal cost.

Are there other psychology practices around? See if they would be open to subletting you space. Inquire with primary care practices - they are generally happy to have a psychologist on site and may be willing to rent you an office in the practice. Executive suites are generally affordable and flexible. Your upfront costs can be minimal and still allow you to get going.

 

[WisNeuro]

Don’t sell yourself short. I started private practice right out of postdoc with minimal capital. Ask around, you can probably find an office to sublet a half-day to a day/week to begin for minimal cost.

Are there other psychology practices around? See if they would be open to subletting you space. Inquire with primary care practices - they are generally happy to have a psychologist on site and may be willing to rent you an office in the practice. Executive suites are generally affordable and flexible. Your upfront costs can be minimal and still allow you to get going.

One caveat is, for neuropsychological evaluation, the startup capital is increased a good deal compared to a general therapy PP if you do not already own testing materials/forms/licenses/etc.

 

[WisNeuro]

What are your thoughts on photocopied test materials? I’m currently in a reputable hospital-based neuropsych fellowship that primarily uses printouts of photocopied test materials. They do have the original kits/stimuli, but don’t regularly use these or purchase new record forms.

Coming from a state forensics practicum where we had to account for every single record form (because 1) tax dollars paid for them and 2) they invariably would be submitted to the judge), I feel a little uneasy about using photocopied copyrighted materials now. Is this the norm in private practice or other hospitals?

Lot of different thoughts about this. Personally, I am doing more and more legal work these days, and in such work, if there is an official form for that test, that's what gets used. Clinically, I use of a lot of things that are not copyrighted, but a few things that are, like Logical memory, which I use the forms for. Personally, this is an ethical grey area that I do not care about. As in, if I know about someone in the community using photocopied forms without buying official ones, I am not reporting that person to the board. I follow board actions and I have not seen that as a reported issue ever in my current state.

So, in essence, clinically, I use forms, but could care less who does and does not. I would recommend using the forms if you are doing legal work and may have to share raw data with other neuropsych experts.

 

[Therapist4Chnge]

Using photocopies is not something I would recommend, but some people do it regularly. In a pinch I've seen people use a photocopy and then when they received more protocols they stapled a protocol to the photocopy. I don't use photocopies because some/many of my cases may end up on the legal side, and it's not worth the hassle of having to explain why a photocopy was used; it's not a good look. While I don't think someone would file a board complaint over it, it's best to not put yourself in that position. As WisNeuro mentioned, there are many non-copywrited options out there for most things, so I'd go that route before photocopying.

 

[Sanman]

I am curious. I know that we can charge a fee for preparing and mailing out medical records. Do we have the right to charge a materials fee for testing cases or is that supposed to be covered in the clinical services? I have never seen this be done but I have also never seen that specific issue addressed.

 

[PsyDWannabe]

I am curious. I know that we can charge a fee for preparing and mailing out medical records. Do we have the right to charge a materials fee for testing cases or is that supposed to be covered in the clinical services? I have never seen this be done but I have also never seen that specific issue addressed.

You can’t charge the recipient for the test materials that you are sending them, because the understanding is that the test materials would’ve been used whether or not the records were requested. That is, you spending money on the test materials is not contingent on the records being requested by the recipients. However you definitely should charge them for the time/materials it takes to send the records, as you stated. Because if they never requested the records, they wouldn’t have spent X amount of dollars buying stamps and envelopes etc. to send it to them.

 

[AcronymAllergy]

I am curious. I know that we can charge a fee for preparing and mailing out medical records. Do we have the right to charge a materials fee for testing cases or is that supposed to be covered in the clinical services? I have never seen this be done but I have also never seen that specific issue addressed.

If you're asking whether you can charge the patient/insurance a materials fee: short answer is that if it's private pay, you can likely charge whatever you want. For insurance, that's supposedly built in to the clinical services...but has been a matter of discussion on some listservs I'm on recently, since many other professions/specialties include separate procedure codes or charges for lab and other materials.

It'd be great if we had a, "test protocols and other materials" add-on CPT code.

 

[smalltownpsych]

November update
Added health insurance for myself and our one full time employee. Expenses this month were 17k and revenue was 20k so still in the black, but not exactly raking it in. We are pretty well set with our expenses and our base team so with some steady growth, I am excited for closing out this year strong and seeing what the next year brings.
Also, wanted to add that part of the expense I’m quoting is my salary so it’s not like I’m only making 3k myself. 😉

 

[AbnormalPsych]

Part time solo PP people - you go with claims made or occurrence insurance?

 

[foreverbull]

Occurrence is more thorough CYA (but more expensive) if you select it from the VERY start and then leave private practice eventually without having to continue coverage after retiring (your practice years will be covered even with a claim made ten years after you retire), but I think most do claims-made. I did claims-made initially and then considered switching, but based on feedback I got from the Trust, it made no sense to “upgrade” due to the complication of having to purchase a beginning “tail” and spend even more than the occurrence policy even though I’d paid for insurance for the prior years. It just seemed unnecessary. I’ll just buy the retirement tail or whatever it is once I leave PP.

Quoted from a Trust rep when I asked about switching to occurrence: “Unfortunately because the claims-made and occurrence policies using different triggers you cannot switch your past years to occurrence coverage. If you wanted to transition from claims-made to occurrence coverage you would cancel the claims-made policy, buy the tail and then pay for a new occurrence policy.…”

Point being, be prepared to stick with whatever you choose because it is a bit of a pain to switch.

If anyone wants to compare the longterm price of occurrence vs claims made plus a retirement tail to see what’s more expensive after say 20 years of PP, go for it! I’d be interested to see.

 

[AbnormalPsych]

Occurrence is more thorough CYA (but more expensive) if you select it from the VERY start and then leave private practice eventually without having to continue coverage after retiring (your practice years will be covered even with a claim made ten years after you retire), but I think most do claims-made. I did claims-made initially and then considered switching, but based on feedback I got from the Trust, it made no sense to “upgrade” due to the complication of having to purchase a beginning “tail” and spend even more than the occurrence policy even though I’d paid for insurance for the prior years. It just seemed unnecessary. I’ll just buy the retirement tail or whatever it is once I leave PP.

Quoted from a Trust rep when I asked about switching to occurrence: “Unfortunately because the claims-made and occurrence policies using different triggers you cannot switch your past years to occurrence coverage. If you wanted to transition from claims-made to occurrence coverage you would cancel the claims-made policy, buy the tail and then pay for a new occurrence policy.…”

Point being, be prepared to stick with whatever you choose because it is a bit of a pain to switch.

If anyone wants to compare the longterm price of occurrence vs claims made plus a retirement tail to see what’s more expensive after say 20 years of PP, go for it! I’d be interested to see.

This is exactly the situation I am in. Was thinking of switching over to occurrence after being claims since grad school. Thanks for the info.

Also, check this out from the Trust website:

"The Trust is the only provider that offers a complimentary unrestricted tail upon retirement, death or disability. This additional coverage normally costs 175% of your last year’s premium, but we include it for free with every claims-made policy. Another benefit is that changes to your current coverage, or changes to the policy limits, apply to past years as well."

 

[Bayside]

I’m retiring and was concerned about purchasing a “tail” having been with American Professional Agency for a long time. Apparently there is no charge from them either if insurance has been active for the past 5 years.

 

[calimich]

Announcing Psychology Connect: Psychologist-to-Psychologist Referrals

The National Register of Health Service Psychologists is excited to announce a new psychologist-to-psychologist referral website, Psychology Connect. As the professional home for health service psychologists, we are inviting ALL licensed psychologists in the United States to participate, not just National Register members, and making this service available at no charge for all to use.

With Psychology Connect, psychologists will be able to send and accept referrals nationwide in a variety of formats including telepsychology and PSYPACT. If you are interested in participating, please sign up on https://Connect.NationalRegister.org.
We hope to gather enough licensed psychologist participants across the country to launch the referral matching in late 2022 or early 2023. We are particularly interested in psychologists in rural and traditionally underserved areas.

If you have any questions about this service, please contact [email protected].

 

[Therapist4Chnge]

I’m retiring and was concerned about purchasing a “tail” having been with American Professional Agency for a long time. Apparently there is no charge from them either if insurance has been active for the past 5 years.

Great to know. The tail stuff can def get confusing. My prior employer paid for tail malpractice insurance, though when I opened my own gig I did claims made. They wanted to make sure they were in the clear and after talking with APA Trust I went w. claims made. It's a fraction of what med mal is, so I guess we should be thankful for that.

 

[PsyDr]

Part time solo PP people - you go with claims made or occurrence insurance?

Occurrence.

If anyone wants to compare the longterm price of occurrence vs claims made plus a retirement tail to see what’s more expensive after say 20 years of PP, go for it! I’d be interested to see.

Pretty sure an insurance company has priced that in. But your calculations should be focused on cost relative to potential cost of a lawsuit.

 

[foreverbull]

This is exactly the situation I am in. Was thinking of switching over to occurrence after being claims since grad school. Thanks for the info.

Also, check this out from the Trust website:

"The Trust is the only provider that offers a complimentary unrestricted tail upon retirement, death or disability. This additional coverage normally costs 175% of your last year’s premium, but we include it for free with every claims-made policy. Another benefit is that changes to your current coverage, or changes to the policy limits, apply to past years as well."

Interesting! Can you link this? In their website article comparing the types, they don’t actually specify who gets the free tail and don’t say they guarantee it with all claims-made policies.

From their website comparison article:
“If you have a claims-made policy for several years and buy the tail when the policy is terminated, the total cost begins to approach the rate of a comparable occurrence policy. Fortunately, many claims-made policies offer free tail coverage for death, disability or permanent retirement, a feature that can result in considerable cost savings if you qualify.”

I’d be happy to see it if it is the case!

 

[foreverbull]

Occurrence.


Pretty sure an insurance company has priced that in. But your calculations should be focused on cost relative to potential cost of a lawsuit.

And your risk over time given x number of clients seen over however many years you practice, if we know the numbers, I suppose. I would hope that one could minimize risk of a lawsuit and payout from said lawsuit via ethical practice.

 

[Sanman]

And your risk over time given x number of clients seen over however many years you practice, if we know the numbers, I suppose. I would hope that one could minimize risk of a lawsuit and payout from said lawsuit via ethical practice.

Ethical practice is great, but likability matters more than competence. Work on your people skills if you don't want to be sued.

 

[PsyDr]

And your risk over time given x number of clients seen over however many years you practice, if we know the numbers, I suppose. I would hope that one could minimize risk of a lawsuit and payout from said lawsuit via ethical practice.

Ethical schethical. The law doesn't care about ethics. It cares about "reasonable" and "community standard of care". APA ethics is not a defense in a lawsuit, unless you're in one of those states that codified the ethics code into law.

Ethical practice might be a partial defense while you're being sued, but it is not protective from a lawsuit being filed. The real cost is usually in the legal fees of defending yourself.

A better way of minimizing risk of payouts (and inheritance tax) is putting your assets into FLPs, trusts, or other financial instruments which cannot be pierced.

 

[AbnormalPsych]

Interesting! Can you link this? In their website article comparing the types, they don’t actually specify who gets the free tail and don’t say they guarantee it with all claims-made policies.

From their website comparison article:
“If you have a claims-made policy for several years and buy the tail when the policy is terminated, the total cost begins to approach the rate of a comparable occurrence policy. Fortunately, many claims-made policies offer free tail coverage for death, disability or permanent retirement, a feature that can result in considerable cost savings if you qualify.”

I’d be happy to see it if it is the case!

View Professional Liability Insurance Rates | The Trust

Learn more about the Trust's professional liability insurance program rates. Inquire about potential premium discounts. Call: 800-477-1200.

www.trustinsurance.com

 

[foreverbull]

Ethical schethical. The law doesn't care about ethics. It cares about "reasonable" and "community standard of care". APA ethics is not a defense in a lawsuit, unless you're in one of those states that codified the ethics code into law.

Ethical practice might be a partial defense while you're being sued, but it is not protective from a lawsuit being filed. The real cost is usually in the legal fees of defending yourself.

A better way of minimizing risk of payouts (and inheritance tax) is putting your assets into FLPs, trusts, or other financial instruments which cannot be pierced.

I’m not seeing how ethical practice wouldn’t qualify as “reasonable” and “community standard of care” in lawsuits. How does it differ?

 

[WisNeuro]

I’m not seeing how ethical practice wouldn’t qualify as “reasonable” and “community standard of care” in lawsuits. How does it differ?

Ethical practice is something you argue in front of an ethics board to your peers, the latter concepts are argued in court and judged by people who know next to nothing about the practice of psychology.

 

[PsyDr]

I’m not seeing how ethical practice wouldn’t qualify as “reasonable” and “community standard of care” in lawsuits. How does it differ?

A. APA ethics have basically no legal standing. Malpractice is a legal determination. Judges use the law.

B. Community standard of care is locally defined. Part of that definition is based on the jurisdictional set of laws and rules from your state board. Your board creates those rule, which are different than my states. The local community follows them, and adapts their use to the local community, based upon the law and local resources. Maybe your area uses outdated stuff because the law requires it, or keeps records for an unusual number of years, or is one of the 4 non-Tarasoff states, or tests in Spanish, or prescribes, or admits patients to the hospital, or can only see patients monthly due to insurance rules. It's basically the idea "if all the professionals are doing it, it's probably for a good reason", which is sorta how common law works.

C. Example 1: You’re in your state in the ER. I’m in my state in the ER. We each get a patient who is suicidal. You can admit him/her. I have to go find an physician to admit. Different community standards of practice. Both ethical, but different.

D. Example 2: Under unusual circumstances you have sex with a former patient that you haven’t seen in 2 years. It’s totally ethical. But someone sues you for it because, sex with a former patient is not something we do around here. Ethical, not consistent with the community standards of care.

@BuckeyeLove could probably explain it better.

 

[calimich]

Lots of change in February. I changed office locations for the 3rd time in ~5 years, coming back to the city I started in and out of downtown high-rise buildings surrounded by accountants, lawyers, and other white collar/allied health folks, and into a midtown craftsmen-style home occupied by exclusively by therapists. I also officially no longer accept insurance; after a ~90 day waiting period I came off the last panel about ten days ago. That was a challenging week as I terminated with several people I had seen for ~100 sessions, cutting my therapy caseload in half. I'm down to about 12hrs therapy/month and the same for assessment, now all full fee.
I have a consulting contract in hand and needed to hire my first attorney to make sure all's good, and I filed paperwork with the college to change the sabbatical from 1/2 to full year. I'm excited and appropriately nervous about the next ~18 months!

 

[smalltownpsych]

March 1 is one full year being open for business! Doors are open and schedule is full and am optimistic about next steps. Been busy enough that I haven’t had much chance to update. That’s a good thing. 20k in gross revenue last month which is exactly the minimum target I was looking at. Infrastructure is in place and am looking at how to continue to expand so I can make a little more and do more of what I enjoy. The next steps to my vision are becoming clearer so I should post on that soon to get some feedback about that.

Lots of change in February. I changed office locations for the 3rd time in ~5 years, coming back to the city I started in and out of downtown high-rise buildings surrounded by accountants, lawyers, and other white collar/allied health folks, and into a midtown craftsmen-style home occupied by exclusively by therapists. I also officially no longer accept insurance; after a ~90 day waiting period I came off the last panel about ten days ago. That was a challenging week as I terminated with several people I had seen for ~100 sessions, cutting my therapy caseload in half. I'm down to about 12hrs therapy/month and the same for assessment, now all full fee.
I have a consulting contract in hand and needed to hire my first attorney to make sure all's good, and I filed paperwork with the college to change the sabbatical from 1/2 to full year. I'm excited and appropriately nervous about the next ~18 months!

Congratulations on getting away from insurance. I am grateful that I dodged that every day.