Details to Work Out as Independent Contractor

[lilharibo]

Hi all. Thank you in advance for your input on this topic!

I'm opening up discussions with a chiropractor that has a room in her practice for use by a massage therapist. She is a relatively new chiro and I've been an MT for about 2 years. Neither of us has worked out the details of a independent contractor agreement/relationship in the past. I'm hoping to develop a list of specifics that we would need to discuss and determine before working together.

These are a few specifics I've already thought about. I'd love to hear your comments on any of these:

--Rate: Who sets it?
--Rent versus perceneforum.xxxe
--Linens: Who provides them?
--Billing: Who does it and how?
--Insurance: To accept it or not.
--Booking clients: Who is responsible for booking clients?

What details have you had to work out as an independent contractor/sole proprietor? What's worked? What hasn't? Thank you!

 

[mommy811]

Details to Work Out as Independent Contractor

As a chiropractor and massage therapist myself (dual license) and in practice since 1992, I can let you know what I have done in the past.

There have been three times I have rented a room to a massage therapist in my practice. All three times were in order to help me pay my rent.

In 1996 I opened my private practice. I rented a room in my office for about 7 years (1996 - 2003). I originally charged $300 and then raised it to $350 the last year (when I started getting a bit busier and knew it was time to prepar to take over that room) -- During this time I had 3 therapists who rented the room. The first stayed one year, the second stayed one year and the third stayed almost 5 years. Each had their own key to their own room in my office. I had the doors keyed so the therapist could only get into the front door and the therapists private room --- but could not access the other rooms within the office. It worked out great. My stuff was still locked up that way, and I had mine keyed to where I had access to the entire office, even though I did not go into her room. When each left, they gave back the key, and I had it destroyed, and the front lock re-keyed to be inaccessable to that key - all the while, my key continued to work. It is a little expensive, but worth it for the owner of the office. You just need a locksmith to make it right.

If the chiropractor has room, she may also want to consider renting to an acupuncturist. I did this with another spare room I had for the period of 1 year. The acupuncturist needed a stopping off point for about 1 year in our state and was slowly working his way back to Louisiana. I knew it was a way-point, for him, but it was win-win for both of us.

Because the therapist rented the space, she (generic, as all three were female) would come and go as she pleased, provided all of her linens and booked her own clients. I referred to her as I was able, by providing a card and encouraging the chiropractic patients to see her. I have a cash practice so no insurance was handled and no billing.

Note: Although I had my massage license early on in this process, I did not practice massage in the office until around 2002. At that time, the massage therapist I was working with and I had a conversation and were in agreement that I would not affect her business if I started taking on private massage clients in the same office. I had been doing some massage work part-time somewhere else and had met a neurologist who wanted to refer clients for massage only, but to me. The MT I was working for was very confident in her work and it did not offend her, so I went ahead and followed though with the plan. The only reason she left my office, was because she had been in practice for almost 20 years, had been having some hand issues and wanted to go into more spa-y, energy and crystal work. My office did not have running water within, so it was incompatable with her new plans. I went up on rent about the same time, and it helped to move the process along for both of us. Otherwise, I think the break-up of our practices would have dragged on a lot longer. We remained colleagues and I continued to refer clients to her and told her stragglers who came by up to about a year later where she went. It all worked out well. She has since passed away.

The main inconvenience your chiropractor is going to have is knowing rather or not you are planning on sticking around. Unfortunately MT's have a bad habit of cutting bait and running when the going gets rough. For many it is a different mind-set. "Oh, I'll rent and see how I like it" not "Now I have to make this work". If you find that you are not planning on staying for years, just be sure to let her know when things start to falter. That way she can have a back up plan. Unless she is made of money, she is depending on you, like you are depending on her. It really is a two-way street, and you can make it easier on her if the communication lines are open.

 

[Jayrverlohr]

Details to Work Out as Independent Contractor

This is a contract. Everything is negotiated.

--Rate: Who sets it?

Negotiated

--Rent versus perceneforum.xxxe

If you pay rent, you are not a contractor, you are a lessee, and the landlord sets the terms. Those may be negotiable, but it creates a whole different dynamic.
% or per service fee is negotiated.

--Linens: Who provides them?

You, unless you are charged a product or supply fee for each use.

--Billing: Who does it and how?

Chiro bills the client or insurance, you bill the chiro

--Insurance: To accept it or not.

Up to the Chiro, since they do the billing. Otherwise, you would be a separate business which may or may not be permitted to accept "referral fees" from another practitioner, making the whole notion of IC moot

--Booking clients: Who is responsible for booking clients?

Chiro, but you have to negotiate a mechanism for bookign when you are available, etc. YOu can't work a set, known schedule as an IC

 

[zack]

Details to Work Out as Independent Contractor

It really is a two-way street, and you can make it easier on her if the communication lines are open.

I am in full agreement with this statement and feel like the more info I have, the better our agreement will be. Thank you for your insight.

If you pay rent, you are not a contractor, you are a lessee, and the landlord sets the terms. Those may be negotiable, but it creates a whole different dynamic.
% or per service fee is negotiated.

I've read a string on this forum on whether to negotiate rent versus a per service fee or perceneforum.xxxe. I'm guessing these MTs aren't independent contractors. Maybe separate businesses? Is there a huge difference between being an IC and a separate business? Tell me if this sounds right: As a separate business I would handle ALL the details of my own work (marketing, billing, insurance, rates, booking, available hours, come as I please, etc.). Basically I would be running a biz out of a building with another biz. As an IC I would be working "under contract" with the chiro. She would handle billing, insurance and booking, mainly. I would still have flexibility based on the terms we negotiate.

(Regarding billing) Chiro bills the client or insurance, you bill the chiro

Typically, do MTs bill for the full amount (the agreed upon perceneforum.xxxe) regardless of whether the insurance was billed or not? i'm not super familiar with insurance.

Thanks!

 

[Destiny]

Details to Work Out as Independent Contractor

I've read a string on this forum on whether to negotiate rent versus a per service fee or perceneforum.xxxe. I'm guessing these MTs aren't independent contractors. Maybe separate businesses? Is there a huge difference between being an IC and a separate business? Tell me if this sounds right: As a separate business I would handle ALL the details of my own work (marketing, billing, insurance, rates, booking, available hours, come as I please, etc.). Basically I would be running a biz out of a building with another biz. As an IC I would be working "under contract" with the chiro. She would handle billing, insurance and booking, mainly. I would still have flexibility based on the terms we negotiate.

Technically, you are a sub-lessee, unless the chiro owns the space outright. Firstly, have to see if the Chiro's lease permits subleasing. As your landlord, the chiro can require you to be "open for business" during certain hours, which makes it easier for the Chiro to book clients for you, since he/she knows when you will be there. I doubt the chiro wants a tenant who comes and goes as you please. They certainly don't want an IC to do that, but they can't control and IC's schedule, but many businesses do.

This also is a good way to get around the restriction of an IC's schedule not being controlled by someone else (which is one of the criteria that would make you an employee). Booking can be done by the chiro, as can marketing of the business, and you pay an "administrative fee" in addition to your rent (such fees are common in a triple net commercial lease). YOu can and probably should advertise your own massage-only practice at that location and handle all of those appointments on your own -- scheduling, payment etc.

Typically, do MTs bill for the full amount (the agreed upon perceneforum.xxxe) regardless of whether the insurance was billed or not? i'm not super familiar with insurance.

Have no idea, but you need to check the regs in your state about billing, referral fees on insurance clients, etc.

 

[Indian Dude 713]

Details to Work Out as Independent Contractor

Hi! Another dual-licensed DC/LMT here (who ironically does neither adjusting nor massage but instead practices like a holistic MD lol!) Pueppi and R&R both made great points. I'll add my 2c.

Neither of us has worked out the details of a independent contractor agreement/relationship in the past.

Not a bad thing - just make sure to get EVERYTHING in writing

Background: I had my own private MT practice for 6 years. During that time, I also took a couple other massage therapy jobs here and there to supplement income or help others out. I worked for 3 years at a massage therapy facility (about a dozen MTs, different self-set schedules), where I could either see their clients for a % of their set MT rate, or I could bring in my own private client and rent a room for a flat hourly rental rate. Either way. My contract covered both scenarios. I saw their arrangement as fair, and I didn't negotiate any of the terms. I also filled in with a DC (chiro doc) friend of mine doing medically-oriented massage therapy in his office. He paid very well and we were buds - there was no contract involved at all, as it was more of a situation where I showed up to get adjusted (I was his patient) and he asked me what I was doing that afternoon since his MT had called out sick and had a full schedule.

Now that life has taken other twists, I now work with my husband (a DC doc who DOES adjust), and since I had more experiences with fellow LMTs, I was in charge of finding an IC LMT to work in our office. First time I'd ever been on that end of the ballcourt, so I Googled for LMT contracts based in Texas - some massage therapy companies or hotels or whatever have posted their contracts in DOC or PDF format on the web, so I looked for a similar situation to ours, and played the careful copy-paste game, making changes as I needed to. So now, we have an excellent LMT working with US.

So, I'll answer these questions based on my experience as an LMT myself, as well as the "employer" side of the table. ("Employer" in quotes because she's not an employee but I don't know what else to call us LOL.)

I'm hoping to develop a list of specifics that we would need to discuss and determine before working together.

Excellent idea.

--Rate: Who sets it?

Like R&R said, it's usually negotiated. However, it's often already set by the facility/clinic; they already know what they want to pay you, and they may accept or reject anything above that. You don't have much to lose by asking, though! That's the cool part about negotiation - EITHER side can reject and/or counteroffer, including you.

--Rent versus perceneforum.xxxe

Great question, lots of answers. Seems like it should be straightforward, but it's not always so clear.

When I worked at the facility, my expenses were both - there was a flat room rental fee ($10/hr at that time, mid '00s, included the table, music, room, utilities, receptionist and the use of the credit card machine, while I brought my own sheets, oils, pillows, etc), as well as a "referral fee" if it was THEIR advertising that got me the client. Now, if I brought in my own private client from the outside, I owed $10 for room rent and charged the client whatever I wanted and kept the rest (no CC machine access or receptionist, though).

When I worked with the DC, it was a straight amount per hour for every massage I did.

With the LMT at our clinic, it's one of 3 scenarios...
1) We refer one of our patients for massage. We offered her a set rate per hour that was BASED on 50% of the actual cost the patient paid for the massage. So let's say the patient pays $60/hour, our LMT's rate is $30. However, it's a SET $30, not stated as 50% - that way, if WE decide to offer a coupon or promo, she still gets the same $30 for that hour of service. (We actually charge--and pay--higher than that; that was just an example.)
2) She brings in a private client from the outside who pays her directly. We then charge a set hourly rate for room rent, which covers pretty much everything she needs - since I had a fully-functional MT studio before, I just moved it all into a room in our clinic and our LMT is welcome to use all of it. Fairly straightforward.
3) She brings in a private client from the outside who has great health insurance and wants insurance to cover it. Since LMTs can't bill insurance directly in our state, we decided we would bill it under us (and it would be a legit massage prescription), pay her a set rate immediately (whether insurance ever paid it or not). Same scenario applies as #1 except since SHE brought in the client, her pay is a lot higher. It's now based on 70% of what our normal massage therapy rate would be. We cut her a check and then we take whatever insurance pays out, even if that's nothing (which is why I don't scream "unfair!" if insurance pays out $150 for that massage when the therapist got paid $50 or less - because for every jackpot the doctor appears to hit, s/he's starving the rest of the time - insurance is NOT nice. At least that therapist KNEW they were going to get a check by a certain not-distant date for a certain amount - the docs don't get that).

--Linens: Who provides them?

I provided my own at the facility. The DC provided linens for me when I did massage at his office. We provide linens for our LMT. It just depends

--Billing: Who does it and how?

Depends on the state, I think. Where I am (Texas), LMTs can't access most insurance directly (except PIP auto stuff, if memory serves). Thus, the doc almost always has to do it. I think it comes down to insurance companies wanting to see diagnosis and treatment codes (and they have to match appropriately) for any claim submitted, and since LMTs can't diagnose, they can't issues a diagnosis code. Now, the facility I worked at provided their own version of a sueforum.xxxill, which is an invoice that has treatment codes on it that match services the clinic provided. The clinic doesn't bill the insurance company directly, but instead gives the sueforum.xxxill to the patient, who then can submit that to the insurance company themselves. The patient still pays out-of-pocket at the time of service, though - so what they're hoping to get out of the deal is some reimbursement from the ins co.

--Insurance: To accept it or not.

Also depends on the state (I think) as to whether this is an option. You may or may not be able to without having a doc (MD, DC, or DO) sign off on it or prescribe it. If you have the option to bill insurance directly, know VERY well what it is you're getting yourself into. Insurance companies do ALL KINDS of things. NOT all ins cos created equal; some are way better than others. None of them are great, mind you. What to expect: 1) a LOT more paperwork. Document, document, document. They may even want to see narrative reports and whatnot. 2) The waiting game. Delay, delay, delay. Even PIP is getting that way. My husband (a DC) just waited *8 weeks* to see payout on a PIP claim for a patient's auto accident. Ins cos often use 3rd parties to scrutinize the records, pass the buck, and again--delay. They have no incentive to pay out, so the process takes absurdly long. So, make sure you have enough stable income coming in besides insurance so you can pay the bills while waiting. 3) Possible audits. Ins cos now pretty much own you - they can come in and audit your records. I don't think they're limited to just their customers, either. I'm sure they need written requests and whatnot, but I've never been through any audits (knock on wood) - I've just heard the horror stories is all. 4) Ins cos have contracts that you must scrutinize thoroughly. They'll throw things in and if you're not paying attention, they'll bite you. Things like "you must accept the case of any [Insurance Company Name] customer" - that sounds OK, but what if the person is just a snipe and you don't want to deal with them anymore? Or things like "you agree to photocopy any record we want *without charge*" - yes, you must furnish anything they ask for, but you DO have a right, under state law, to charge a certain amount per page. And most importantly, all of them have a reimbursement payout schedule, regardless of what your fees are. So, all I can say is, do your homework and be careful.

--Booking clients: Who is responsible for booking clients?

That depends, too. At the facility and the DC office, they booked them. At our office, we book them. During my stint at the facility, I could bring in my own from the outside and work them into my schedule. Our LMT at our clinic has the same freedom.

What details have you had to work out as an independent contractor/sole proprietor? What's worked? What hasn't?

There's always the sticky issues of self-promotion when you're at another clinic. At the facility, I could hand out my business card freely and actively recruit their clients for my private practice (a rather odd permission, since it's a really rare freedom). With the DC, I purposefully did NOT bring my cards or promote myself or any of my services. Those patients were under his care and this was his office, and I respected that. In fact, I felt guilty when one of the patients asked if I had a card - I told her I didn't have any on me but that I would approach him about it and leave some cards with him if it was OK with him and then she could pick one up the next time she came in if he was OK with that. When I approached him afterward, I told him exactly what I typed and he said he had ZERO problem with me giving out my card if someone asked for it. I told him I purposefully left them OUTside his office and he said he appreciated that, but that he trusted I wasn't trying to steal the patient and so he was cool with it. (Although he did have an LMT who did try to steal the patients for themselves - one of those patients tipped off the DC about it and the DC did let that LMT go.)

In our clinic, I'm OK with our therapist giving someone her card if they want an outcall during a time we're not open or something. We're fairly strict about active recruitment of patients, though - we insist that we don't incur any financial setbacks because after all, it's US who got HER the patient, so that's only fair. Of course, we've never had to even bring this up (aside from going over the contract terms at the beginning), because we chose our IC not only for her natural ability and medical massage-oriented preference, but most of all for her PERSONALITY. No drama, no gossip, no flakiness, no yuppie factor, no nothing. She's reliable, friendly, VERY down-to-earth, self-motivated, flexible, and gifted. She communicates well and doesn't let her personal life consume or distract her. Perfect

I can say the biggest thing that everybody overlooks is PERSONALITY combinations. If you've got different religious, political, philosophical, etc views, or different ways of seeing the world, handing problems, resolving conflict, approaching projects, working as a team, etc, etc, and you can't at least make those differences compatible with each other, you're going to have problems. This is even more true in a small facility, where each person makes up a larger chunk of the office vibe. (Big facilities aren't exempt, though, because of the whole guaranteed clique factor.) Make sure you all get along! If one of you is a pickup-driving Texas secessionist (us) and another is an ultra-"green" yuppie (a memorable LMT applicant) you're going to clash. It won't last long, trust me. Know the various personalities up-front BEFORE going in. Saves everyone involved a major migraine

OK that was more than 2c but I hope it helped anyway! Lol
Hugs,
~Jyoti