Fair Deal?

[Barbaros]

I am chiropractor in the midst of  negotiations with a MT, hoping that we can reach an agreement soon.  She has a small private practice and is looking to rent space in my office (Chicago Loop,  brand new with a dedicated massage room).  We have agreed to a monthly rent of $300 (she provides table, linens, oils, music etc).I have also asked if she is  interested in treating some of my patients (when her schedule allows) for a flat fee of $30/hour or $15 per 30 min.  I believe this is fair and reasonable based on my research from this forum, surveys of my colleagues and career services at two local massage schools, and AMTA member demographics information. For all the MTs out there, how does this sound?  What would you change?  Thanks

 

[Johner]

Fair Deal?

I have to honest, I don't think I would go for that deal.Your asking her to pay $300 per month, provide everything she needs to do her job, I assume she'll have to launder her own linens as well and keep the space clean and decorated as well, then she gets 50% of the standard rate if she treats your patients.I think the rent amount is great considaring she'll be providing everything for herself. It's the 50% along with the rent that concerns me. It seems likely that her presense in your building in general has the potential to bring you more business, and her. Maybe I'm off base and some more experienced therapists might have a totally different opinion than me. I just feel there is probably a more fair solution than your offer. I think either a perceneforum.xxxe of the massage fee, or a set rent, but I'm not sure about doing both.

 

[matt !]

Fair Deal?

I am chiropractor in the midst of  negotiations with a MT, hoping that we can reach an agreement soon.  She has a small private practice and is looking to rent space in my office (Chicago Loop,  brand new with a dedicated massage room).  We have agreed to a monthly rent of $300 (she provides table, linens, oils, music etc).

This is fair... I've been in a situation - chiro and massage therapist working together in one office (I will PM you on that), and this is fair to the MT and fair to the chiro.  Especially, since usually a chiro office is a little more load than the therapist would normally go for.

I have also asked if she is  interested in treating some of my patients (when her schedule allows) for a flat fee of $30/hour or $15 per 30 min.  I believe this is fair and reasonable based on my research from this forum, surveys of my colleagues and career services at two local massage schools, and AMTA member demographics information.

I don't think this second part is fair. If you want your clients to see her, then send them to her and let them pay her direct.  In my personal opinion that is the best thing for both you and the patient.

~*~

After talking via multiple PM's to Citychiro, I retract my original statement that the second part was not fair, as much as it is not the best of situations in its current state.

Just wanted to make sure that I give credit where credit is due.  I find myself guilty of making too quick an assumtion that all would stay the same.

Since I found out you are willing to make changes in the agreement as you are able, for the benefit of both parties in regard to this second section, then I think it may work.

 

[tehabwa]

Fair Deal?

Personally, I'd jump on this arrangement in a heartbeat. Since she has her own clientele, she'll basically just be renting space from you, and $300/month is what I was paying down here in southeast texas in a chiro office that had little to no patients coming in. I was expected to supply all my equipment and launder my own linens. That's fair for both of you.For sending her clients, as long as you're not really booking ahead of time, and you are working around her down-time if she doesn't have a client at that time, I see no problem with that payment structure. You said she has a small private practice, that means there are times she won't be busy. I'm assuming you bill insurance for the patient and pay the therapist out of your own pocket, risking whether or not the insurance will pay you back. That's no risk for the therapist; they get paid whether you do or not. That would allow her to build her practice as well as yours. I personally don't see a problem with it.

 

[Ant]

Seforum.xxxgnant, You are correct, I would bill insurance for the massage services she provided for my patients and pay her the fee regardless of whether or not I am reimbursed. As for scheduling the patients, I have asked that she provide massage services to my patients within seven days of notification.  I felt this would be the best situation for me ( I can offer massage services from a licensed professional), the therapist (she can build her practice and make some money from my patients on the side) and patients (since most will be able to use their insurance benefits).

 

[Bob Dollen]

Fair Deal?

I think it is more than fair, especially if you handle the insurance.You are filing down time - exactly what an independent therapist needs. Just like flying off-peak times on an airline and other time constrained businesses, a discount is applied.

 

[kaynoxdemon]

Fair Deal?

Seforum.xxxgnant,



As for scheduling the patients, I have asked that she provide massage services to my patients within seven days of notification.

That would still be good, but there are certain "prime times" that clients like to schedule during. For me, they're usually between 9am - 11am, and 3pm - 6pm. I probably wouldn't schedule insurance patients at these times, because the cash patients like to schedule, and the therapist would make more money from cash patients. I also uphold a cancellation policy, and have found that when people are only coming in because their insurance is billed have a tendency to no-show. Don't be surprised if she wants to enforce a cancellation policy, billing the patient for the time that another patient / her own clients could have scheduled.

 

[Scotty J]

Just for the fact alone that you care enough to research this as much as you have to make sure you are fair is something to be applauded.  Thank you for the respect.As a business owner that both sub-lets and has IC's, your offer is very fair.  Most IC's only look at what is being charged for the service compared to what they are being paid.  They tend to forget how much overhead is involved in the set up  and maintaining of a large practice. Chances are high that the MT would not be able to provide the same ammenities on their own...hence why they need to rent from you in the first place.  They are able to offer a portion of your ammenities at a fraction of the cost and with little or no financial risk which is normally associated with start up. As the owner of the practice, you are paying for the advertising to attract the clients you would be passing on to the MT.  Advertising is an investment that involves the risk of no returned interest.  That is a large consideration in the amount of commision that you deserve as the owner.  In other words, the therapist took no risk in gaining that client from you.  They just had to be there to provide the service.Thanks again for the respect you showed in your interest in keeping it fair!

 

[lola1234]

Fair Deal?

I'm pretty much with the consensus here. The rent per month is an awesome deal. 'Tho I've not graduated yet, $300 in a downtown location (a prime location) would be great (too bad you're not offering it 11 months from now!).Seforum.xxx, however, does bring up some important issues with regards to the prime time for scheduling appointments; but even that is manageable with a 7-day window.Kneadful - while I understand your perspective as an owner, from the perspective of a practicioner, if the deal isn't in MY best interests, then no matter how much money you invest, it wouldn't make sense for me. Additionally, the money spent in overhead, rent, advertising, insurance, etc., would have been spent by the owner to begin with and would not solely be directed for my (or a MT) benefit.But CityChiro - I will also extend my thanks for being fair in your offer as well as your concern in offering as fair a deal as possible. I hope I'll be as lucky when I'm job hunting.

 

[Pompal 09.]

Fair Deal?

Seems like the majority rules that the agreement the chiro wants to make with the MT is fair all the way around. If you've done your research, then suffice to say that you probably have.The only comment I would make is DON'T forget that it's a two-way street on advertising/bringing in clients for the other practitioner. Not only is the chiro advertising and referring his clients to the MT, but I believe that the MT is probably also advertising still and her clients could very well be referred to the chiro for treatment. I have had several clients who have replied they have never sought after chiro treatments or have even considered it as a possible relief solution when I have asked them if they ever considered seeking the advice of a chiropracter out to help relieve some of their discomfort. Once they realize this is a viable option, I then give them the business card of a great chiropractor I know which they readily accept.Because I feel that the advertising/referring is a 50/50 split, I believe the MT should get a little more perceneforum.xxxe than what's indicated in the current agreement. Be well,Jen

 

[TheAnswerMan]

Well, with what jen just stated above...if she refers her clients to the chiro, can she ask/tell him how much she'll let him charge her clients?  I don't like the deal.  Will she have to work on them for $30 every visit or just the first visit in from your referral?I know that he said he would pay her $30 reguardless of what insurance pays but who cares.  I think she should not cut herself that short.  All he is doing is sending her the referral.  Of course that's great to get a referral but if she has to work on them every time for $30, it's not a fair rate.  When she gets busy working on clients who are willing to pay $60-$75 for an hour, who would want to say yes to $30 for the hour?  (which i assume is close to the going rate in chicago) Sounds to me like you should just make her an employee or an IC.  Pay her a fee for each client and not worry about the rent part.  Seems to me like you can't have a rent situation and also give her a reduced rate for some clients.  Maybe I'm off here but I wouldn't like the offer.  I don't have a problem with the $30 for an hour.  My problem is $30 for an hour but she also has to pay rent.  

 

[Terry]

Fair Deal?

I agree with Terab about the volume issue. When I started on staff with a chiro, he had 8 clients left on book for massage. Within 6 months I had constant full book and within a year an overflow into night hours, requiring a second therapist on board...so when would your MT be able to use the office for her clients? She'd be paying rent from your reduced rate. You would be getting her rent, and insurance reimbursement. Seems a scale of diminshing returns for her, as her business with you increases...also a big chance for early burn out.Some people love having the availability of adjustment and massage in one trip. Some chiro's enjoy having their clients massaged pre or post adjustment. If she is fighting to get her own clients in, for her full fee, to make your rent, that is going to leave you with big holes in your scheduling...which means return visits at possibly inconvenient hours for your patients. I agree with those who say either rent or split. Perhaps if you started with the rent and discount deal, with an agreement scaled to gradually decrease towards eliminating her rent as she took on more of your patients, that might be very beneficial for both sides.

 

[Nala]

I have to side with the other therapists who say rent OR split...  not both.  I am in a situation where I send many of my clients (who my advertising $$$'s &/or client referals) to the Chiro's in my office. They benefit from my referals as much as I benefit from theirs.I am also curious, when you state that you will be billing insurance for your patients, and paying the MT a set fee for these bookings, will it be mostly L&I and auto?  

 

[Byron C]

I also agree with the rent or % split.  Having both seems confusing on who's responsibilites are what.  What would she be getting for her %?Also, billing insurance does complicate things.   I agree with Seforum.xxxg.  In my experience, persons with insurance coverage, on average, are more likely to take advaneforum.xxxe and no show or cancel with hardly any notice.  This is potentially an issue that you and the therapist may not want to deal with.  Especially if she has paying clients that could have taken the appointment.  What about when you lose out on getting paid for PI or MVA cases?  Will you be willing to absorb the loss?I get paid the same regardless of what the insurance pays.  I would not be willing to take a loss if the insurance doesn't pay.    

Perhaps if you started with the rent and discount deal, with an agreement scaled to gradually decrease towards eliminating her rent as she took on more of your patients, that might be very beneficial for both sides.

 This sounds fair also.  Might be a good consideration.  But, she would be losing her tax deduction of rent, which is one thing I don't like about being an IC.  She might not want to lose that.I would look at the options and opinions listed here, as well as your own, and come up with a Pro/Con list and see what mutual agreement you can come up with.Hopefully we have all been of some help to you.

 

[Pompal 09.]

Fair Deal?

Citychiro, I appreciate your willingness to ask.  Thank you.

We have agreed to a monthly rent of $300 (she provides table, linens, oils, music etc).

This sounds very reasonable.  Am I to assume the etc means advertising?

I have also asked if she is interested in treating some of my patients (when her schedule allows) for a flat fee of $30/hour or $15 per 30 min.

This does not sound reasonable to me.  I believe to be fair, the patients should be expected to pay her regular rates, especially if you are filing for insurance payment.  

One of my concerns is that in filing insurance you are most likely filing for the full billable amount that insurance will pay in your area -- reasonable and customary -- and receiving payment for that amount.  She, on the otherhand, is doing the bulk of the work and most likely receiving 50% or less of what is being billed plus paying you rent on top of it.  I agree with Gutehands that it seems to be a scale of diminshing returns for her, especially if she starts to see more of your patients and less of her clientele.  I also agree with Terab about the volume, will she have to work a reduced fee each time your referral sees her?

For example:  If R/C in your area allows $65 billed for massage.  You will make 54% or $35 on the referral in addition to the $300 rent.  If the MT works on 12 of your patients in a month billing at $65/session.  She will have made $360 on those 12 referrals (basically covered her rent).  You will have made $420 plus her $300 rent for a total of $720 paid to you.      

For all the MTs out there, how does this sound?  What would you change?  

If I were the MT I would want a cap on the monthly amount.  

She would pay you $300/month to rent the space plus you would make a perceneforum.xxxe (30% - 40%) of the billable massage fee's until the monthly cap is met.  I think a $600 cap is reasonable (doubles her rent).  Paying you 40% of the billable massage she would have to work on 12.5 referrals each month or about 3 referrals a week in order to reach that cap.  

IMO, that is fair.

 

[Live free or Die]

Fair Deal?

I think it helps to look at this slightly differently.A massage therapist has her own space, on which she pays rent. Her clients, her overhead. Risk, reward, all the usual buisness platitudesOn her slow days or downtime, she is on-call at the day spa next door and she can pop over when it suits her schedule. The day spa pays 50% of the $60 rate. Therapist has no marketing costs, no other expenses.That sounds like a good deal, and it not too different than what many therapists do to make ends meet.It seems to me our chiro friend is being frowned upon because he is acting as the both landlord and day spa owner in the above scenario. It does not seem "fair" that one party makes money two ways off the same person.Is this less "fair" than two different parties making money different ways off the same therapist?

 

[gina c]

Fair Deal?

I think it helps to look at this slightly differently.

A massage therapist has her own space, on which she pays rent. Her clients, her overhead. Risk, reward, all the usual buisness platitudes.

On her slow days or downtime, she is on-call at the day spa next door and she can pop over when it suits her schedule. The day spa pays 50% of the $60 rate. Therapist has no marketing costs, no other expenses.

However, along these lines your scenario doesn't take into account that the referrals she is seeing in her rented space will be using equipment and supplies that she is expected to supply and pay for herself.

It seems to me our chiro friend is being frowned upon because he is acting as the both landlord and day spa owner in the above scenario.  Is this less "fair" than two different parties making money different ways off the same therapist?

I'm not saying it is fair or unfair that the chiro wants to get as big a piece of the pie as he can get or that acting as both landlord or day spa is wrong or unfair.  I'm suggesting it is in the best interest of the MT to limit what the chiro can make off of her on a monthly basis.  Why should the MT not make the bulk of the money?  She is the person doing the hard work, taking the time to work with each patient.  Reducing her fee certainly doesn't reward her for her hard work and time.  

As for what is or isn't "fair".  

What I don't think is "fair" is the idea that he is offering to pay her a reduced rate for his referrals, then bill insurance and collect 50% or better of the fee charged simply because it is insurance work.  

The biggest expense in insurance billing is having the right person checking the patients insurance policy to know whether massage is covered, keeping track of it and making certain the insurance company is paying the claims on a timely basis -- which has nothing to do with the MT -- but rather the office staff the chiro has hired to perform this duty.  Most offices file claims electronically in bulk, either in-house or through a service, the cost involved in this is probably 10% - 15% of the monthly amount billed.  If he were to track what the actual expense is of filing massage claims it is probably less than that on a monthly basis.  Why should he be making more off of her work than she is?

IMO, as far as his overhead needs these should be met with what he is charging in rent.  

 

[mukeshgupta]

I certainly don't think we're frowning upon the chiro, he asked our opinion of if we thought it was fair.  We answered.  I for one, wouldn't work a side job while trying to build my practice.   Why would I want to build business at another business for 1/2 the price while trying to start myown practice?  Who even says she wants to have this set up. Maybe working on them one time at the reduced rate is ok but why try to build business somewhere when you'll be getting cut short on a regular basis by your "landlord".I'm not saying she shouldn't help take care of a client by charging a cheaper rate, or that she should say no way, I'm not going to do that.  What I am saying is that he shouldn't ask her to pay rent and then ask her to work on his clients for 1/2 her normal rate....on a continual basis.  Maybe once, or twice....but that's it.

 

[nuttercanadian]

Fair Deal?

What I am saying is that he shouldn't ask her to pay rent and then ask her to work on his clients for 1/2 her normal rate....on a continual basis.  Maybe once, or twice....but that's it.

I'd think that once or twice is already too many times.  If I paid $30 the first few times, I wouldn't want to pay more the next times.  And those next few times will probably be when the insurance won't cover the massage.

 

[striker]

Fair Deal?

Good input by all...I get the feeling that the chiropractor doesn't plan on coming back and checking out the rest of our feedback to him after his second post though.Just a hunch I have (which I hope I'm wrong about). Regardless, this was a good topic to discuss amongst ourselves as it gives us some good information to "chew on" should we consider a similar setup for ourselves down the road. Be well,Jen