Check out any therapy group posts on Facebook to reveal the dilemma of joining a group private practice. “When is it fee splitting and when is it not? What’s fair when I am building my practice?”
Fee Splitting is this:
You take a portion of my income and you provide…nothing.
You’re a well-known therapist and by virtue of knowing you, I give you money. And then I may get a referral from you.
It’s not fee splitting when you, the well-known therapist provides office space, office equipment, furnishings, billing services, supervision or marketing. Then, when I give you money, I’m getting something in return.
The ethical dilemma arises when this is not spelled out by a rental and supervision contract, or a marketing effort that can be documented and tracked—like a website.
The APA, ACA and NASW all have a code of ethics that makes it clear when you can accept a percentage of a colleague’s income. But, I think there’s a very easy way to determine whether it’s a go or not. Do you have a signed rental agreement where furnishing, equipment is provided?
Start there to determine if you have a “fair deal.”
And, one other point to consider. If you don’t feel the value, are you receiving value?
In a consultation, I listened while the therapist questioned the 40% of her fee that went to the group practice.
So, we did a finance exercise. We assigned a price to each of the items her 40% of monthly revenue supported: rent, office furnishings, office equipment, billing, marketing and supervision. Then we assigned a fair market value to each of these categories. She was relieved and somewhat delighted to find out that the market value was about 7% above her monthly payments. I’d argue it may be a few percentage points higher depending on the group’s reputation.
Receiving referrals from an established clinician or group is marketing you can’t buy in a Facebook ad, blog post or business card. The informal marketing that comes from a well-respected group that’s been around a while is worth a lot which is hard to measure. That’s added value if you’re in that group!
The secret to success in a group private practice is to promote not only your work but the work of the practice you join. In the beginning, they are taking a leap of faith for you. As time goes by, you are establishing yourself not only as an individual contributor, but you are adding to the overall success of the group. This is a formula for success and…no fee-splitting involved.