Provided by:  Jennifer Kirschenbaum, Esq.
January 22, 2020
 
 
Question:

Jennifer, 

My employer is paying me 40% collections, how do I know if this is market? 

Thanks, 
Dr. P

Answer:

First, the best resource I can share on what is or is not market is the MGMA DataDive Tool.  Or recommend you speak with colleagues or recruiters on what is out there in your geographic region.  

Second, I cannot even begin to answer until I understand the question, and here, I do not understand what the question is because I do not know what "collections" means.  "Collections"' is amorphous - is if Gross or is it Net?  If "collections" is every penny that comes in, then that means "Gross" and if it means Gross, then what portion of the Gross.  Let's assume (safe bet) we are talking "Gross" attributable to your services.  Well, the 40% of Gross Collections may be grossly over-market.  Whereas, if we are talking "Net", then we need to understand what "Net"' means.  "Net" means Gross minus stuff.  With most things in life, the details matter, so when we talk "Net", what is the "stuff" we are minus-ing?  Is "Net" defined as "Gross" minus refunds, repayments and/or redos?  Or does "Net" also take into account other expenses, such as the cost of consumables or equipment, or corporate/administrative expense such as billing costs?  If so, then the share of Net just got a lot lower... 

How we define "collections", Net v. Gross, makes a big difference.  The devil is in the details; details you should be mindful of BEFORE you sign.   Let's get the language right before you are subject to it.