Practice Management

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  • 1.  Buy-Out Formulas

    Posted 01-19-2021 17:09
    Everyone,

    We are going to start work on a review of our current buy-out process for Shareholders and wondered if you would share any basic formulas that you use for the professional side of your practice. Do you have a fixed amount, some form of deferred compensation or do you use a formula and if so what is the formula? Thank you!

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    James S Hueber, CMPE, MBA
    COO
    Colorado Imaging Associates
    303-416-1360
    j.hueber@ciapc.com
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  • 2.  RE: Buy-Out Formulas

    Posted 01-19-2021 18:09

    Hi James

     

    We have a deferred comp formula that is a rather crudely estimated payout of their share of AR.  The first chunk is equal to a regular monthly draw, and the remainder is paid over 18 month.  The amount is reduced for failure to give the required 180 days notice (except in case of death or disability), and for short term shareholders (< 3 years).

     

    Dave

     

     

           David Smith, FACMPE  |  Executive Director  |  785.393.8387

    5800 Foxridge Dr.  Ste 240  |  Mission, KS  66202  |  www.uickc.com

    p-uic-horizontal-03a

     

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    Original Message


  • 3.  RE: Buy-Out Formulas

    Posted 01-20-2021 09:52

    James

     

    For Radiology Associates, Inc we have a formula for buy-out. This is only available to partners who have been a partner for at least 5 years. Partners less than 5 years do not get a buy-out.

     

    1. Calculate the ratio of collections to gross charges for several months that are fully adjudicated. Apply this ratio to your outstanding gross AR to arrive at net realizable AR
    2. Add all AR for flat fee work that has been performed but not paid
    3. Subtract all AP for services/supplies/unfunded retirement etc
    4. The total will be net value
    5. Divide by number of "qualified" partners ( longer than 5 years)
    6. The practice has the option of paying a lump sum, adjusted for present value, or pay over a 5 year period.

     

    Paul Coogan

     




    Original Message


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