Can you go without disability insurance?
Q. Having just started out in practice, I'm scraping by financially, so I decided to postpone getting disability insurance. Are there less-expensive alternatives?
A. Not really. You definitely need coverage-a policy that will replace about 60 percent of your current earnings. Look at it this way: If you're just scraping by, you probably don't have the assets to carry you through an extended illness.
If you own your practice, add an office overhead expense policy (available through group associations). While it won't replace lost income, it will pay ongoing operating expenses while you're disabled, such as staff salaries, rent, leases, and, in some cases, business loan payments. With these bases covered, you'll need less disability insurance.
Sharing an ancillary service with a co-investor
Q. I'd like to offer ancillary radiology services. However, my office is too small for the equipment, so I'd like to rent space in a building next door. Another solo practitioner would share the facility and costs with me. Is there anything wrong with this arrangement?
A. Yes. The Stark law prohibits doctors from owning radiology services unless they are provided in the same building as the doctor's medical office or in a "centralized location." To qualify as a centralized location, the space must be owned or rented by the referring doctor on a 24/7 basis. It can't be shared with a co-investor.
The only way to co-own the radiology equipment is for both of you to have medical office space in the same building as the radiology suite. Even then, you may not be home free. Check whether your state has its own laws on doctor ownership of ancillary services.
Determining a productivity bonus
Q. Should a physician's productivity bonus be based on his gross patient billings or on his net revenue?
A. As a rule, productivity bonuses are based on net revenue. Gross billings-before third-party adjustments are factored in-just aren't a meaningful figure.
A policy for unused sick days
Q. What's the best way to handle unused sick days? Should I allow employees to accrue them?
A. You can let them carry over unused sick time, to a maximum of 60 days. It will encourage good employees to stay with you, especially if you don't provide disability insurance.
Another option is to factor unused sick days into a holiday bonus. But don't share the details of how you calculate it. That way, you'll have the flexibility to even out some of the inequities in your attendance policy. (For example, you probably expect your back office staff to come to work with a minor cold, whereas you'd tell employees with direct patient contact to stay home. Or you may allow parents to take time off when their kids are sick, while staffers without children have to take up the slack.)