Payroll Options: 3 Ways Group Practices Pay Their Clinicians

Thinking of adding clinicians to your practice or joining a group?

Building a group practice can be extremely lucrative and a great way to grow your client base. This may seem daunting at first and adding clinicians means taking on increased responsibility as a practice owner. One of the most common questions we get from our group practice customers is “How do I make sure my new clinicians get paid?”. As always, SimplePractice aims to make this process easy with the Insights section in your account.

Note: If you will be paying clinicians, it’s critical to know your state’s employment laws, and we recommend consulting an accountant or lawyer to make sure that you are fully compliant. You can consult your local professional association for advice. Also make sure you understand the legal and ethical requirements for managing pre licensed clinicians.

The 3 most common payroll models: Hourly, Service-Based, or Percentage-Based.

We work with thousands of group practices and have seen that the three most common types of group practice payroll models are Hourly, Service-Based, and Percentage-Based. Each model has its pros and cons, and we’ve compiled them here to help you find the right fit for your practice.

1. Hourly

Clinicians are paid a set fee for each hour of work they complete for your practice.

Pros:

  • Simple to calculate, as payment isn’t dependent on service or clinician type—which can vary greatly.
  • Tends to be the most accurate model because the only factor is time.
  • The hourly pay model is legal and compliant in nearly every state.

Cons:

  • Depending on the laws of your state, hourly clinicians may be eligible for overtime pay and/or mandatory breaks. Be sure to review your local laws for hourly employees.
  • You will need to establish and maintain a system for tracking hours, including time in client sessions and writing notes.
  • You will have to pay your employees before the insurance company pays you. If you don’t accept insurance, this isn’t an issue.

You can easily calculate using a timecard software, your calendar, or SimplePractice’s Appointment Status Report. This report allows you to filter by clinician and date to see the  billing codes they’ve used, helping you estimate how many hours they’ve worked.

2. Service-Based

With the Service-Based payment model, clinicians receive a set rate for specific services they provide. This means that all clinicians charge the same price for the same services; for example, everyone in your practice charges $100 for CPT code 90834.

Pros:

  • Simple to calculate.
  • Fees are consistent for the whole group. This standardizes billing and makes it easy for you to track your most requested services.

Cons:

  • Clinicians may be limited on which services they can offer and how much they can charge.
  • If you take insurance, be sure to review restrictions on service-based pay in your state.
  • You will have to pay your employees before the insurance company pays you.

You can easily calculate these figures using SimplePractice’s Appointment Status Report. Filter by clinician and date to see which billing codes your clinicians have used. 

Appointment Status Report - SimplePractice

3. Percentage-Based

One of the most common payroll models is the Percentage model, but this option can get complicated. The group owner pays clinicians a percentage of the total amount of payments they receive from both clients and insurance payers.

Pros:

  • Pricing is flexible. Clinicians can charge different rates for different services, as payment is based on their chosen rates and contracted rates with payers.
  • You pay your clinicians when money comes in. You don’t have to pay your clinicians before insurance reimbursement.

Cons:

  • Calculating totals at the end of the month can be difficult. You need to count totals from clients and insurance payers.
  • Time of client payment matters so much more. Employees aren’t paid until the client pays their fee, causing confusion and delays if you bill monthly or allow later payments.
  • Your clinicians will have many more questions about their paychecks, since there are many more inputs that inform their final amount.

You can calculate this fee by using the Payments Received by Clinician report in SimplePractice. Filter by clinician and date to see the amount received. Make sure that you close Pay Periods every cycle, as they do not automatically close. Organizing with Pay Periods helps you see your payments for a certain time frame to better help you manage your payroll.

Payments Received by Clinician Report - SimplePractice

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