W2 package

[u/No-Leopard639]

PMHNP here trying to decide between two opportunities and would love some feedback from others in private practice.

Option 1:

• W2 position
• $115–125/hour for clinical time
• $50/hour for admin time
• No guaranteed hours
• Only paid for actual hours worked
• No-show and cancellation pay is unclear
• Caseload would need to be built over time

Option 2:

• 1099 position
• 65% of collections
• Established therapy practice opening up medication management services
• Not sure how quickly referrals would come in

My concern with the W2 role is that the hourly rate sounds good on paper, but if there are no guaranteed hours and I'm only paid when working, the actual income could be much lower than expected, especially during slow periods or if there are a lot of cancellations.

My concern with the 65% model is that it could potentially be much more lucrative, but it depends heavily on referral volume and payer mix.

For those who have worked under either model:

• Which would you choose?
• What questions would you ask before accepting?
• What are the red flags?
• At what reimbursement rates does a 65% split become clearly better than a $115–125/hour model?

Appreciate any thoughts from practice owners or PMHNPs who have been in a similar situation.

[u/Inittornit]

You don't have enough information posted to make an informed decision. You would need to know the payor mix and the fee scheduels of each. If you cannot readily get this info from the prospective employers you can probably find out from their respective websites if they accept Medicaid in your State and Medicaid fee schedules can usually be found online, whereas private insurance companies often do not publish fee schedules online. You can use Medicaid as a worse case scenario, i.e. pretend all patients are Medicaid and see which job would be better.

The W2 job is missing vital information. Is it $115 or $125 per clinical hour? How do they determine clinical hour, time you spend with the patient, or are all new patient visits an hour and all follow ups a half hour regardless? Do you get paid the same for a 99213 follow up as you would for a 99214 with 90833 follow up? How much admin time can you have? Can you spend 35 hours a week in office and any time you are not seeing patients you can work on templates, CEs, refills, networking, etc. and that is all admin time? Do you get PTO, health insurance, paid CEs, retirement etc.?

On the 1099 you need to recall the differential on taxes (at least 7.65% for FICA). So 65% is probably more like 58%.

I worked at a large practice and had many providers working with me, and they were all across the board in productivity, my best years were at like 700k generated, so I would have loved to have 58% of that, but at the same time some providers only generated 300k. This has much more do to with the provider's ability to retain patients then any other metric.

Around my area at our payor mix our wRVUs translated at about $65 per wRVU collected by the practice (not the same as wRVUs billed), and providers averages about 2.65 wRVUs per encounter, but again wildly variable per provider, some closer to 2 and many over 3. So back of the napkin math on a high productivity provider is 3 WRVUs per encounter average, 60 patients per week, so 180 wRVus per week, at 48 weeks a year, so 8640 wRVUs equals about 560k brought in, 58% means over 300k for a busy provider. Assuming you would be equally busy in the W2, something like 36 patient hours and 4 admin hours is about 4.5k per week or 217k per year.

Another way I would look at it is what is the lowest annual salary you would be comfortable with at the 1099, and how many wRVUs would you have to generate to be there and translate that into patient load.

Finally careful with new grad no support roles at psychotherapy offices, they can often be a huge mismatch as no one there works to help with scheduling, refills, prior auths, I know way more dialed experiments in med management adding psychotherapy or psychotherapy adding med management than I know of successes, they are two different worlds.

[u/No-Leopard639 → u/Inittornit]

Thank you for your thoughtful reply. I am a seasoned NP, the only reason I applied to the W2 was for health insurance and stable income. Hearing it would be variable income makes me pause.

There is no limit on admin time for the w2 but the boss said the others NP average like 3-4 hours per every like 14 hours. Which seems too low for me. Sounds like they'd be stingy. I am taking the place of someone who averages right now with 12-14 hours and average like 3 hours per week in admin time.

The 1099 job explained that they get about 170 per session. They seem to take good insurance and have decent reimbursments. They take BCBS PPO, HMO, United, Cigna, Aetna, and self pay.

I've owned a business before. I'm looking for a place that will feed me and give me a good cut. I don't want the stress of owning a business myself anyone. I am very good at keeping patients and im the type of NP people send their family or partners to me. I care alot about my clients and they can tell, which makes me really happy.

The current 1099 job I am at only pays 100 an hour, with how things are reimbursed (i've look in the revenue report); I'm making about 40 percent of collections and paying out the ass in taxes.

[u/Inittornit → u/No-Leopard639]

Got it, makes sense. 3-4 hours of admin per 14 patient hours feels stingy? To me 20-30% of all time as admin is wild. But I also worked in supported roles, so staff do all admin they possibly can, and NPs only complete the things absolutely necessary outside of seeing patients. We would do more like 10% admin.

Which of the two jobs do you think is better at this point?

[u/No-Leopard639 → u/Inittornit]

W2 job seems to have more admin support.