Profit-sharing dispute

September 10, 2010

Learn how to profit share in your practice.

Q: Our internal medicine practice has 4 office sites, 1 in each of four cities. Each doctor covers 1 or 2 of the offices on the same day each week. There is disagreement about whether the way we share earnings lets all doctors have the opportunity for a high profit share. Each office consistently has different demand for new patients and treatment plans. We have tried different ways to allocate our professional earnings-net charges produced, RVUs, patient encounters-but none has solved the problem. How can we develop a way to more closely credit the doctors for value of service?

A: Determine the profitability of classifications of your procedures and treatments by consolidating similar groups of services. For example, Group A: office visits and hospital visits; Group B: consultations/pre-op clearance; Group C: office procedures; Group D: immunizations and injections; Group E: laboratory. Apply dedicated expenses required to produce each of the groups of services and calculate the profit ratio for each group. Credit each doctor with the profit ratio for collections attributed to him or her for each group within the accounting period on a running average. Caution: Stark Law may apply to the allocation of profits for clinical laboratory testing, so be certain to consult qualified counsel. Use a rotating schedule for each doctor to serve all offices.

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