Help Needed: Assistance with Utility Interruption Claim for Private Practice
Summary: I recently transitioned from a job in the medical field, anticipating a significant increase in income, only for my office to lose power for over 10 days after starting this new venture. I’m seeking advice on how to demonstrate to my insurance agent that my projected income exceeds past earnings due to this interruption.
Hello everyone,
I’m a solo psychologist running my own private practice. Last year, I was a subcontractor at the VA Hospital, but I ended that contract in December to focus on building my practice full-time. While I had dabbled in private practice, dedicating most of my effort to the VA, I fully committed in January. I worked diligently to update my LLC, secure credentials with managed care and Medicaid, market my services, and build a waitlist. Although I appreciated my time at the VA, I’m truly passionate about working in pediatrics and with children with ADHD and autism.
Unfortunately, credentialing processes with insurance companies took longer than expected, and my patient inquiries trickled in slowly through January. However, my efforts began to pay off by mid-February when I received approvals from most managed care providers. My first family appointment was scheduled for February 17, and I was finally set to start working at full capacity. Just when it seemed like things were turning around, disaster struck.
On February 17 (last Monday), a fire in the commercial junction box at my office building caused a power outage. Initially thought to require only a day of repairs, it quickly became clear that the damage was more extensive and repairs would take multiple weeks. I had to cancel my first full week of appointments, and now, I find myself in a difficult position.
I filed a claim with my business interruption coverage through State Farm, expecting compensation for my lost income from the canceled appointments. However, I’m now facing a major hurdle: how can I convincingly demonstrate my projected income to my insurance agent? The canceled appointments were my first two weeks of fully booked work, and I fear my historical data might misrepresent my actual earning potential.
My local agent suggested I create a table with patient initials, scheduled dates, appointment types, and expected charges, which I did. Yet, this isn’t sufficient for State Farm. They require harder evidence to support my claim. The agent acknowledged this was just a starting point but could not advise me on what else to provide.
I can’t share my appointment calendar or correspondence with clients due to privacy regulations, and when my agent asked for last year’s tax documents, I explained that my income will differ dramatically now that I’ve transitioned to my practice full-time. Last year’s figures simply won’t reflect my true earning potential starting this month.
The agent then suggested I have my tax preparer submit a profit/loss statement for the year. The issue? I handle my own taxes, and until now, the process has been straightforward as I haven’t required professional assistance. My initial income this year has been minimal because I was in the startup phase. I don’t have the resources to hire a CPA yet, nor do I have ample income to track.
Here’s my situation: the power is still out, I’m depleting my savings, and I feel stuck with State Farm. Should I draft a profit/loss statement based on my knowledge of my calendar and the appointments I’ve had to cancel? It would show pure loss without profit—how would this be different from the initial table I created, except it looks more official?
The income loss agent keeps emphasizing the need for the profit/loss statement to proceed with my claim, but my building management can’t provide a reliable timeline for repairs. Each day, I receive vague updates about ongoing work without a clear completion date.
I’m in a tough financial spot with dwindling funds and limited time. Although we can manage for a little longer, our savings are rapidly running out. Any advice or insights on
I’m really sorry to hear about your situation; that sounds incredibly frustrating and stressful, especially after the hard work you’ve put into establishing your practice. Here are a few suggestions that may help you navigate this claim process and provide the information your insurance company needs:
Detailed Documentation: Since you’ve already created a table of patient initials, scheduled appointments, and types of sessions, you can enhance that by writing a brief narrative explaining the context of these appointments. Include details about your marketing efforts, any correspondence with potential clients, and the fact that you had an overflow of appointments lined up. This narrative can emphasize that your practice was poised for significant growth right as the disruption occurred.
Projected Income: You could put together a projected income statement for the upcoming months, based on the fully booked calendar you had in place (even if it was just for one week). Include your average session fee multiplied by the number of appointments you had scheduled. Additionally, you could estimate future clients you were likely to book based on the interest you’d been receiving leading up to the interruption.
Peer Statements: If possible, gather statements from colleagues in your field, especially those who have experience with similar situations. They can provide estimates of how much income can be expected for a practice at your level, especially given the demand in your specialty.
Referral to Tax/CPA Professional: Even though you’re managing your taxes yourself, consider reaching out to a local accountant or CPA who specializes in small business or healthcare practices. They may offer a free consultation to help you draft a basic profit and loss statement or guidance on how to present your situation to the insurer without breaching HIPAA.
Insurance Adjuster Consultation: Request a more detailed discussion with your State Farm adjuster or supervisor. Sometimes speaking directly with someone who has a more comprehensive understanding of your policy can help clarify what they need.
Legal Advice: If the situation doesn’t improve and financial distress grows, it might be worth consulting with a legal professional who specializes in insurance claims. They can provide guidance on how to proceed and protect your rights during this process.
Local Resources and Support: Look into local resources that may assist business owners during hardship—there may be grants, community funds, or non-profits that provide financial assistance for private practices facing emergencies.
While the situation is undeniably tough, documenting your claims with as much detail and professionalism as possible should help convey the legitimacy of your income projections. Hang in there—your perseverance in building your practice is commendable, and hopefully, this setback will be resolved soon.