Some providers dream about it: A totally cash-based practice. A virtual provider utopia where the frustrations of dealing with third-party payers don’t exist.
Some providers dream about it: A totally No more appeals, no more rejections, fewer staff, lower malpractice premiums, and less worry over unpaid claims—sweet freedom! Or is it?
Certainly, feeling freedom from the constraints of insurance carriers makes it seem like less is more. But it’s true that becoming a solely cash-based practice can also mean less income and fewer patients. It’s time to weigh the pros and cons.
Before making any final decisions, it would be wise to consider your local economic climate. Is it conducive to a successful cash-based practice? Which insurance companies are most prevalent in your region, and what successes are other participating providers having with reimbursement? Regardless of whether to choose to operate as a cash-only practice, or bill insurance, a proactive approach to establishing and maintaining your main source of income is necessary.
The cash path
Begin by looking at the definition of a solely cash-based practice: In this model of operation, any form of insurance, Medicare, Medicaid, workers’ compensation, or personal injury coverage is not accepted. Payment for services is strictly cash, debit card, credit card or personal checking. Medicare patients are turned away and referred to a doctor who is properly enrolled in Medicare and equipped to bill on the patient’s behalf.
Next, determine your ease and the ability of your team to enforce the collection of payment on every visit. Prospective patients must be informed up front and in person of your written policy (yes, there must be a written policy), to collect payment at each visit.
Small, difficult-to-read print at the bottom of initial paperwork is not acceptable. Be certain to include a “patient financial responsibility agreement” as required patient paperwork to be signed before they are seen or treated. Sure, you can offer payment plans (or prepayment plans) if your state allows, but these must be managed meticulously to be compliant with regulations.
Ideally, patients should be informed when they make their appointments of your written policy, and what forms of payment can be accepted. Posting reminders near the front desk is also a good idea. There will always be patients who give excuses for why they cannot pay.
Sometimes these excuses are legitimate; unfortunately, they are often not. Create scripting with your team to provide professional—and friendly—responses to these scenarios, as they continue to execute your written office policy.
Being free of dealing with third party payers doesn’t mean freedom from all aspects of their requirements. For instance, your coding and documentation must meet necessary guidelines as a patient may submit the charges to their insurance carrier for reimbursement. Even though you are a non-participating provider, the payer can request a patient’s record at any time, and you’re enjoined to maintain the same level of documentation and service standards expected of providers who submit charges themselves.
It is likely that a patient who fails to receive reimbursement based on poor coding and documentation standards by their doctor will go elsewhere. Your chiropractic board also expects you to meet the requirements of documentation and medical necessity laid out by your state rules. Unquestionably, when you are transitioning to a cash-only practice, you should expect to lose some existing or potential new patients who rely on their insurance to afford care. In fact, their insurance co-payment may even be more than your fee. This is why some doctors find the temptation of taking on the responsibility of submitting their services for them is too strong to resist.
The insurance path
Now consider the matter of accepting and billing insurance, and then waiting to be paid. The reality is, the cons of this debate are already out there. These are the reasons to consider shying away from billing insurance altogether.
But then again, as discussed above, doctors who run cash-only practices and those who have a more traditional style and work with third-party payers are still subject to many of the same guidelines. The only added responsibility is to collect co-pays and deductibles and bill the payer while remaining within the payer’s established guidelines of establishing medical necessity.
There are a lot of prospective patients out there with many forms of coverage that apply to a variety of services. These patients will most often try to abide by their payer’s distinct guidelines to make the most of the benefits they have. If you are not listed as a participating provider for any payer, you can stunt your own growth as a practice when patients are searching for someone in their network.
Although it may be argued that patient care and satisfaction is the ultimate indicator of a successful practice, the fact remains that without consistent and comparable reimbursement for care, no practice can survive.
There are other options available than going either strictly cash or strictly insurance. Many successful providers treat mostly cash patients, making an exception for Medicare and workers’ compensation patients.
In fact, some of the most successful practices are made up of a healthy blend of both cash and insurance patients. This does not mean you have to accept every insurance plan, but a willingness to bill some insurance plans—without solely relying on them—will leave you in good financial standing regarding reimbursement.
Finally, whether you are cash or insurance based, or combination of the two, you must pay heed to the rules that apply to everyone in the health care industry. To ensure a healthy, thriving practice, remember that compliance with all the rules, documentation to meet the standards, coding correctly, and billing and collecting properly are the elements that tie it together.
Kathy Mills Chang is a certified medical compliance specialist (MCS-P), a certified chiropractic professional coder (CCPC), and a Certified Clinical Chiropractic Assistant (CCCA). Since 1983, she has been helping chiropractors improve the performance of their practices. She leads a team of 30 at KMC University and is a foremost expert on Medicare, documentation and CA development.
Nicki Brooks is a Certified Physician Practice Manager (CPPM) who entered the chiropractic field in 1999 as a Chiropractic Assistant. In the ensuing years, she held a variety of positions in the health care industry acquiring a diverse toolbox of skills. She joined KMC University in 2016.
