Independent Contractor

Becoming an independent contractor offers the freedom of having your own space without the burden of owning it. It is essentially an “office within an office,” where you are leasing space from another doctor.

As an independent contractor, you:

• Form a contractual relationship with a doctor
• Establish your own practice
• Work independently within that doctor's office.
• Obtain a business license and set up a legal form
• Have your own practice name
• Establish your own office hours
• Do your own advertising
• See your own patients or those referred by the other doctor

In some cases, the doctor may even turn over certain hours of business to the independent contractor. Make sure your specific arrangements meet the needs of both parties.

Independent Contractor Benefits

• Gives you the freedom to work independently – with a safety net
• Keeps your overhead low while you’re getting started
• Allows you to learn about having your own practice
• Provides insight into how another doctor operates

Independent Contractor Considerations

Should you go the independent contractor route, there are things you’ll want to keep in mind, including:

• Finalizing Your Arrangement. Make sure you include a section dedicated to payment arrangements. The best arrangement is a straight sublease at $X per month. You may also consider additional rent based upon a percentage of collections, in addition to the base rent. If you’re considering this option, put a cap on the percentage. Everything is negotiable in this kind of arrangement.
• Negotiating Your Contract. Make sure you define:
  • What happens if you see the other doctor's patients or they see yours? (For malpractice reasons, each practitioner should only see the other practitioner’s patients in an emergency.)
  • What facilities, equipment and staff are you entitled to?
  • Who will get new patients/walk-ins/referrals? (The fairest is to alternate.)
  • Who will retain patients if you leave? (Since you are independent, this should be you, but this should be spelled out.)

NOTE: Make sure you have your own attorney review any contract before signing. 

• Creating Your Company. You must set up your company in one of the forms discussed in the legal options section. Setting up as a sole proprietor is probably easiest in this circumstance.
• Know the legal and tax implications. The IRS has very specific guidelines about independent contractor status that you need to review if you are considering this option. The risks of misclassification fall on the business owner, not the employee. The risks include:
  • Retroactive overtime
  • Interest and penalties imposed by the IRS
  • Attorney’s fees and legal costs