- Email: [email protected]
Contract basics: What a dietitian should know
Practice THE BUSINESS OF DIETETICS
Contract basics: What a dietitian should know
ccording to the ADA’s “Report on the ADA 2002 Dietetics Compensation and Benefits Survey,” 11% of registered dietitians (RDs) work in private practice/consultation to individuals or consultation/contract services to organizations, and 2% of dietetic technicians, registered (DTR) are also selfemployed (1). When entering any relationship for the first time, especially a contractual agreement with a physician or clinic, what you don’t know can hurt you.
A
GROUND RULES Although pay is ultimately what contract negotiations and business relationships are about, knowing what the ground rules are for discussion is an important first step. Marianne Smith Edge, MS, RD, FADA, ADA President-Elect and owner of MSE & Associates, LLC, a nutrition management consulting company in Owensboro, KY, which provides services to health care facilities and corporations throughout the country, says the first thing a dietetics professional needs to know is what the ground rules are. What do they need? Mary Hise, PhD, RD, an assistant professor at The University of Kansas Medical Center in Kansas City, KS, says that one strategy that has helped her when bargaining is to understand the other party’s point of view— knowing what they need and what their expectations are. “I think that has made me better, as far as negotiating contracts and working with other people. When I do that, I am better able to make an agreement.” For example, Smith Edge says, “if a doctor asks a dietitian to see a patient, is it on an as-needed basis or a continuous
This article was written by Jim McCaffree, an Editor with the Journal at ADA headquarters in Chicago, IL. doi: 10.1053/jada.2003.50107 428 / April 2003 Volume 103 Number 4
basis?” Another issue to work out is insurance paperwork. Will the dietitian have to file a claim with the patient’s insurance provider, or will the doctor file a claim with the insurance provider, then pay the dietitian? If that is the case, Smith Edge says, a dietetics professional will want to negotiate with the physician for the highest possible reimbursement rate. What are the parties providing? If the doctor wants to contract with the RD, will the doctor provide office space, or will the RD? Smith Edge says that a dietetics professional should go into the relationship realizing that it is a business relationship. “I think what happens sometimes is that if the dietitian knows the doctor personally, it is assumed that the doctor is going to be ‘nice’ to us because we’re friends, but we have to remember it is a business situation, and that all contracts should be viewed as business, and make sure that what is good for one party is good for the other.” Dietetics professionals are also occasionally called by businesses that want to provide nutrition counseling for their employees. In these cases, it is important to know what time commitment that company wants. Smith Edge says that no-shows are a risk in private practice, whether working with a business or an individual. Often, if the client is a noshow, you can’t charge for that visit. How to minimize that risk? “I would want to establish a guaranteed fee for myself whether the client showed or not,” Smith Edge says. What do you need? Mary Hise recommends that dietetics professionals do homework on salary and hourly wage, versus consulting pay: “I would take a look at what is being paid in your area and region for different consulting work and for basic salary levels and then work from there,” figuring in such expenses as liability insurance, mileage and other travel expenses, and
any educational components you need to perform the services. You have to either add those expenses in your total fee or your hourly rate. When negotiating pay or reimbursement, Hise advises, “Aim high, don’t sell yourself short, then work down.” “When you contract for services for an agency, small hospital or nursing home that doesn’t need a dietitian on a fulltime basis, the first thing you establish is the time commitment the facility will require,” says Smith Edge. She says that some facilities will spell out how many hours per week they will need from a contract dietitian, but before a dietitian agrees to that number of hours, the dietitian should look at what the facility expects from a contract dietitian, the acuity level of the resident population, and to be sure that the dietitian can fully provide that service in the number of hours that facility has requested. “I think what’s happened sometimes over the years is that we have really wanted business so we’ve agreed to accept the number of hours a facility offered, knowing up front that we may not be able to actually provide all the services they need, and I think that’s first and foremost.” Smith Edge continues: “It’s okay to walk away from business if you truly believe you can’t perform the service they require in the amount of time they require. So you have to be up front about what you can provide and how many hours you think it will take, and then negotiate the fee.” The key, according to Smith Edge, is including a clause that the facility understands that if more time is needed, the dietetics professional will negotiate on a monthly basis with the administrator that, due to circumstances, additional hours might be needed. Again, it is important to know what the facility will offer in terms of space and access to charts. WHEN THINGS GO WRONG Often, things can go wrong in a relationship, whether it’s business or love. The
THE BUSINESS OF DIETETICS management of the contracting clinic can change, and a once-sweet relationship begins to sour. While the parties involved generally try to talk things out before the situation becomes intolerable, this is not always the case. A good contract can often head off potential problems before they even come up. For example, a termination clause in the contract can be important. Generally speaking, most contracts require 30 days’ notice for termination by either party. If a facility or a physician no longer needs your services and wants to terminate your contract, that facility has to provide 30 days’ notice before termination. Of course, as a vendor, you also may give 30 days’ notice to your client. Smith Edge encourages entrepreneurial dietetics professionals who have employees
who are also dietetics professionals to insert a clause stipulating that the contracting facility may not try to hire those employees away from them. It is important to realize that a workable contract takes time and that “thinking you’re going to get something perfect and that everyone will agree to it is an unrealistic expectation,” Hise says. She goes on to say that most of the contracts that she has worked on “have taken anywhere from three months to nine months to actually get worked out—and that’s from the first time you start talking to somebody until you get the contract signed on the dotted line.” Hise likes to look beyond the bottom line, saying that one of the most important aspects of contract negotiation is trying to create a position that is satisfac-
tory in ways beyond money. “I think that figuring out your passion, figuring out what you really want to do, and pursuing that gives you a lot of satisfaction and potential for growth. That is the great thing about negotiating contracts and piecing together different kinds of jobs. The second thing is making it financially appropriate for your education and expertise.” For more general advice on negotiating in business, see Hise’s article “Negotiation Strategies for Dietitians,” in the December editition of Support Line, a publication of the Dietitians in Nutrition Support dietetic practice group. Reference 1. Rogers D, Salary Survey Workgroup. Report on the ADA 2002 Dietetics Compensation and Benefits Survey. J Am Diet Assoc. 2003;103:243-255.
www.CanolaInfo.org provides your recommended daily intake of canola nutrition information. Canola oil has been proven to help lower cholesterol and provide a better balance of nutrition in your diet. CanolaInfo’s web based nutrition information can help you help your patients to find a better balance...Check out the
‘NutritionInfo’
CanolaInfo website for Monthly Recipe and Nutrition Features as well as downloadable Patient Resources, Dietary Fat Charts, Lipid News and Research.
Canola Info
www.canolainfo.org
B o x 1 6 4 5 , L l o y d m i n s t e r, S a s k a t c h e w a n S 9 V 1 K 6 C A N A D A
306.387.6610 P
306.387.6637 F [email protected]
Journal of THE AMERICAN DIETETIC ASSOCIATION / 429
Contract basics: What a dietitian should know
ccording to the ADA’s “Report on the ADA 2002 Dietetics Compensation and Benefits Survey,” 11% of registered dietitians (RDs) work in private practice/consultation to individuals or consultation/contract services to organizations, and 2% of dietetic technicians, registered (DTR) are also selfemployed (1). When entering any relationship for the first time, especially a contractual agreement with a physician or clinic, what you don’t know can hurt you.
A
GROUND RULES Although pay is ultimately what contract negotiations and business relationships are about, knowing what the ground rules are for discussion is an important first step. Marianne Smith Edge, MS, RD, FADA, ADA President-Elect and owner of MSE & Associates, LLC, a nutrition management consulting company in Owensboro, KY, which provides services to health care facilities and corporations throughout the country, says the first thing a dietetics professional needs to know is what the ground rules are. What do they need? Mary Hise, PhD, RD, an assistant professor at The University of Kansas Medical Center in Kansas City, KS, says that one strategy that has helped her when bargaining is to understand the other party’s point of view— knowing what they need and what their expectations are. “I think that has made me better, as far as negotiating contracts and working with other people. When I do that, I am better able to make an agreement.” For example, Smith Edge says, “if a doctor asks a dietitian to see a patient, is it on an as-needed basis or a continuous
This article was written by Jim McCaffree, an Editor with the Journal at ADA headquarters in Chicago, IL. doi: 10.1053/jada.2003.50107 428 / April 2003 Volume 103 Number 4
basis?” Another issue to work out is insurance paperwork. Will the dietitian have to file a claim with the patient’s insurance provider, or will the doctor file a claim with the insurance provider, then pay the dietitian? If that is the case, Smith Edge says, a dietetics professional will want to negotiate with the physician for the highest possible reimbursement rate. What are the parties providing? If the doctor wants to contract with the RD, will the doctor provide office space, or will the RD? Smith Edge says that a dietetics professional should go into the relationship realizing that it is a business relationship. “I think what happens sometimes is that if the dietitian knows the doctor personally, it is assumed that the doctor is going to be ‘nice’ to us because we’re friends, but we have to remember it is a business situation, and that all contracts should be viewed as business, and make sure that what is good for one party is good for the other.” Dietetics professionals are also occasionally called by businesses that want to provide nutrition counseling for their employees. In these cases, it is important to know what time commitment that company wants. Smith Edge says that no-shows are a risk in private practice, whether working with a business or an individual. Often, if the client is a noshow, you can’t charge for that visit. How to minimize that risk? “I would want to establish a guaranteed fee for myself whether the client showed or not,” Smith Edge says. What do you need? Mary Hise recommends that dietetics professionals do homework on salary and hourly wage, versus consulting pay: “I would take a look at what is being paid in your area and region for different consulting work and for basic salary levels and then work from there,” figuring in such expenses as liability insurance, mileage and other travel expenses, and
any educational components you need to perform the services. You have to either add those expenses in your total fee or your hourly rate. When negotiating pay or reimbursement, Hise advises, “Aim high, don’t sell yourself short, then work down.” “When you contract for services for an agency, small hospital or nursing home that doesn’t need a dietitian on a fulltime basis, the first thing you establish is the time commitment the facility will require,” says Smith Edge. She says that some facilities will spell out how many hours per week they will need from a contract dietitian, but before a dietitian agrees to that number of hours, the dietitian should look at what the facility expects from a contract dietitian, the acuity level of the resident population, and to be sure that the dietitian can fully provide that service in the number of hours that facility has requested. “I think what’s happened sometimes over the years is that we have really wanted business so we’ve agreed to accept the number of hours a facility offered, knowing up front that we may not be able to actually provide all the services they need, and I think that’s first and foremost.” Smith Edge continues: “It’s okay to walk away from business if you truly believe you can’t perform the service they require in the amount of time they require. So you have to be up front about what you can provide and how many hours you think it will take, and then negotiate the fee.” The key, according to Smith Edge, is including a clause that the facility understands that if more time is needed, the dietetics professional will negotiate on a monthly basis with the administrator that, due to circumstances, additional hours might be needed. Again, it is important to know what the facility will offer in terms of space and access to charts. WHEN THINGS GO WRONG Often, things can go wrong in a relationship, whether it’s business or love. The
THE BUSINESS OF DIETETICS management of the contracting clinic can change, and a once-sweet relationship begins to sour. While the parties involved generally try to talk things out before the situation becomes intolerable, this is not always the case. A good contract can often head off potential problems before they even come up. For example, a termination clause in the contract can be important. Generally speaking, most contracts require 30 days’ notice for termination by either party. If a facility or a physician no longer needs your services and wants to terminate your contract, that facility has to provide 30 days’ notice before termination. Of course, as a vendor, you also may give 30 days’ notice to your client. Smith Edge encourages entrepreneurial dietetics professionals who have employees
who are also dietetics professionals to insert a clause stipulating that the contracting facility may not try to hire those employees away from them. It is important to realize that a workable contract takes time and that “thinking you’re going to get something perfect and that everyone will agree to it is an unrealistic expectation,” Hise says. She goes on to say that most of the contracts that she has worked on “have taken anywhere from three months to nine months to actually get worked out—and that’s from the first time you start talking to somebody until you get the contract signed on the dotted line.” Hise likes to look beyond the bottom line, saying that one of the most important aspects of contract negotiation is trying to create a position that is satisfac-
tory in ways beyond money. “I think that figuring out your passion, figuring out what you really want to do, and pursuing that gives you a lot of satisfaction and potential for growth. That is the great thing about negotiating contracts and piecing together different kinds of jobs. The second thing is making it financially appropriate for your education and expertise.” For more general advice on negotiating in business, see Hise’s article “Negotiation Strategies for Dietitians,” in the December editition of Support Line, a publication of the Dietitians in Nutrition Support dietetic practice group. Reference 1. Rogers D, Salary Survey Workgroup. Report on the ADA 2002 Dietetics Compensation and Benefits Survey. J Am Diet Assoc. 2003;103:243-255.
www.CanolaInfo.org provides your recommended daily intake of canola nutrition information. Canola oil has been proven to help lower cholesterol and provide a better balance of nutrition in your diet. CanolaInfo’s web based nutrition information can help you help your patients to find a better balance...Check out the
‘NutritionInfo’
CanolaInfo website for Monthly Recipe and Nutrition Features as well as downloadable Patient Resources, Dietary Fat Charts, Lipid News and Research.
Canola Info
www.canolainfo.org
B o x 1 6 4 5 , L l o y d m i n s t e r, S a s k a t c h e w a n S 9 V 1 K 6 C A N A D A
306.387.6610 P
306.387.6637 F [email protected]
Journal of THE AMERICAN DIETETIC ASSOCIATION / 429