Lindsay Wagahoff, MA | Aug 19, 2020 | 0
Choosing Your Career Path in Chiropractic: Being an Associate, Independent Contractor or Practice Owner
One of the most common questions that chiropractic students ask me when they are in the last year of their education is whether they should be an associate, independent contractor, or start their own practice after they receive their license. Before making a decision on how you want you to start your career, it’s important to fully understand the difference between these different paths so you can make the best choice for your situation.
Being An Associate
When you are an associate chiropractic physician, you are an employee of an existing chiropractic practice but do not have any ownership stake in the business. The owner(s) of the practice may be one or more chiropractic, medical or osteopathic physicians. They recruit, hire and train doctors to serve patients within the practice.
As an employee, you have a set job description, responsibilities and expectations surrounding your work. There is usually an employment contract for a period of time with set compensation structures and benefits. Your compensation may include a base salary and also a bonus or commission system based on the collections received from your work.
You are an employee of the practice and will receive a regular paycheck. The practice owners will deduct payroll taxes from your pay and you will receive a W2 to submit with your personal taxes at the end of the year.
Many associate employment contracts include a non-compete agreement that restricts the solicitation of patients when you leave the practice. It may also prohibit you from practicing within a certain distance of the practice for a period of time.
The practice owners will dictate your work hours, office systems, treatment protocols and systems. Your practice of chiropractic may be limited to certain techniques or other parameters as set by your employer. You are not responsible for hiring or training your support staff. All of the equipment, computers, software, and other practice supplies are provided by the practice you work for. Your fees and whether you will be in-network with various insurance plans will be determined by the owners of the practice.
In many cases you will notice that marketing and bringing in new patients into practice is expected within your work as an associate chiropractor. However, some associate positions do not require the doctor to perform the work required to attract new patients within the practice. Instead, the practice has employees who serve that role, marketing the practice’s services to the community.
Being an Independent Contractor
Many individuals within the chiropractic profession are confused about the terms “independent contractor” (IC) and “associate physician.” Contrary to popular belief, these terms are not interchangeable and describe different roles, business and tax structures.
An IC is the owner of their own practice. The practice may be a sole proprietorship or corporation type structure. As an IC, you may provide chiropractic services in one location or many, for short (such as in locum tenens work) or for long periods of time in a space-sharing agreement. You will need to have your own compliance manual, HIPAA policies, human resources policies, and be knowledgeable about various regulations that pertain to the health care business.
A common IC arrangement occurs when an existing practice has additional room, equipment and/or patients that need to be seen. Instead of hiring an associate physician as an employee of the practice, they lease space and/or use of equipment to an IC who uses it to serve the existing practice’s and/or the IC’s patients. Different than an associate position, the existing practice cannot dictate how or what the IC doctor does in their work. Any treatment, protocol or procedure can be performed, limited only by state and federal statutes.
In this type of arrangement, the IC is expected to do the work to bring in their own patients, decide how and what to charge for their services (including whether to be in-network with insurance), have separate accounting from the existing practice and determine their own work schedule. The existing practice does not add the IC to the payroll and does not take care of any employment taxes for the IC. As a separate entity, you will have to determine your business structure, retain an accountant and determine how to comply with tax regulations.
To stay in compliance with any fee-splitting laws, the IC reimburses the existing practice for use of the space or equipment with a flat-fee rate per day, week or month. This flat-fee must not be a percentage of collections or be construed as such through a graduated rate based on the number of patients seen. The IC must pay the same rate whether they saw one or one hundred patients during the designated time frame.
Another type of common IC relationship is one of a locum tenens or temporary relief doctor. You may work for an agency or be contracted individually by an existing practice to fill in for another chiropractic physician who is unable to work due to maternity leave, illness, death or other situation. There should be a contract that specifies your pay per hour or per day for your work, sets expectations for how long you will be contracted to provide services and restricts your ability to solicit patients to another practice. Locum tenens work can last for just a day to a few weeks but does not last more than 60 continuous days due to Medicare regulations (1).
Being a Practice Owner
Instead of starting your own practice as an IC or being an associate physician within an existing practice, you can also start your own business from scratch or purchase an existing practice from another doctor.
As a practice owner, you may be a sole proprietor or have a corporate structure to your business. You will need to have your own compliance manual, HIPAA policies, human resources policies, handle payroll/taxes and be knowledgeable about various regulations that pertain to the health care business.
Being an autonomous business owner provides the most flexibility in your practice operations, but also can be difficult to navigate without previous practice or business ownership experience. You will be responsible for securing a commercial lease for office space (unless working out of your home), purchasing equipment, establishing all business processes and marketing systems, in addition to the regulatory and accounting responsibilities of being a business owner.
Medicare Claims Processing Manual, section 30.2.11 (www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/clm104c01.pdf)