Weary of paperwork, managed care constraints, and low reimbursements, some metro-area physicians have shelved their contracts with payers and redesigned their practices.
Source: Minnesota Medical Association
Rob Bruley’s office doesn’t look much like a medical clinic. Located on the first floor of a green four-square house in the Linden Hills neighborhood of Minneapolis, it’s filled with sprawling plants, comfortable wicker furniture, and pictures of occupants from the turn of the century. In the summer, the front porch serves as the waiting room.
Bruley’s practice is as unconventional as his office. A practitioner of both traditional and complementary medicine, Bruley holds degrees in medicine and chiropractic. He also practices on a cash-only basis.
Bruley’s path to opening his own practice has taken a number of turns. A general practitioner who was part of the first class to graduate from Mayo Medical School in 1976, he did stints in California and Alaska before returning to Minneapolis to run the emergency department and continuing medical education program at Eitel Hospital in 1980—about the same time HMOs were changing the health care marketplace in the Twin Cities.
He became disillusioned about the effect managed care was having on medical practice when he practiced family medicine in Watkins, a town of about 900 people south of St. Cloud, in the early 1990s. “You end up seeing a lot of people fast, and a lot of these people are desperately ill. You end up putting out a lot of fires, and you don’t get to the bottom of the issues,” he says. “You can’t do that unless you spend the time and talk to people.” And you can’t do that in a 15-minute office visit.
Wanting to explore his interest in chiropractic after a chiropractor relieved his sciatica, Bruley enrolled in Northwestern College of Chiropractic in Bloomington in 1998.
In order to support his family, he taught cardiology at the school and worked weekend-long emergency room shifts in Deer River, Minnesota.
Moonlighting in the ER turned out to be one key to being able to open his own practice when he finished school. The other: the business courses he took at the chiropractic college. “Chiropractors have to be much more business savvy in general than physicians,” he says. “A physician can go out and sign a bunch of managed care contracts, join a clinic, and be put to work. Chiropractors aren’t guaranteed they’ll have one patient, so they have to be more business-oriented.” Bruley says one of his best experiences was having to write a business plan for one of his classes. “It forced you to think about what you want to do and how you want to do it. We didn’t have any of that in medical school.”
Today, the Bruley Center is open to patients three days a week. Bruley charges $280 per hour in 15-minute increments and takes cash or checks. The clinic does provide patients bills with ICD-9 codes that they can submit to their insurers. “Some get reimbursed on an out-of-network basis,” says Bruley’s wife, Mary, who handles the practice’s accounts. “But we tell them not to expect it.” She says 30, maybe 40 percent, of patients get something from their insurers.
Although most of Bruley’s patients have insurance, he is seeing more and more with high-deductible policies—including a number of physicians. Since opening the practice in late 2002, the number of patients he treats each week has grown to an average of 16. Bruley spends one to two hours with each.
In addition to not having to absorb the cost associated with filing insurance papers, Bruley says he’s saved money by outfitting the clinic as economically as possible. He points out furniture that used to be in his home, and file cabinets and a desk that came from a used furniture sale. He doesn’t do X-rays or lab work in the office but instead sends a number of patients to HealthEast Medical Laboratory, which operates out of HealthEast’s three east metro hospitals, where they pay a fraction of what a clinic or hospital would charge for most standard lab tests. He sends others to Northwestern Health Sciences University for functional medicine tests.
Bruley still spends one to two weekends a month in Deer River. He says that extra income and being able to create a niche practice—functional medicine, a combination of traditional and complementary medicine that focuses on understanding the causes, prevention, and treatment of complex, chronic diseases—have been critical to making his business plan work. “The nice thing about traditional medicine is that there are a lot of ways to do part-time work and make the transition rather than go cold turkey,” he says.
Farewell, Medicare
Dudley McLinn, M.D., and his three partners at Specialists in Internal Medicine in Minneapolis began cutting their ties with managed care organizations in the 1980s, when they resigned from Physicians Health Plan, the predecessor to Medica.
Today, the physicians work with insurers on a fee-for-service basis but don’t sign contracts in which they agree to be paid a negotiated rate. And last July, the group opted out of Medicare.
“Throughout the 1980s, we discovered that managed care was not the kind of practice we wanted to have,” says McLinn, who looks more like a business executive in his suspenders and pinstriped shirt than a practicing physician. “A lot of people made money off managed care, but people didn’t get care.”
Although the physicians were able to make a go of it without the guarantee of patients that goes along with managed care contracts, Medicare reimbursement put a different kind of squeeze on the practice. “Probably 50 to 60 percent of the patient contacts we have are Medicare patients, and we were getting paid about 38 cents on the dollar and overhead was 48 cents,” he explains. “So 60 percent of our patients weren’t even covering our overhead, and Medicare patients require more time.”
In trying to find a way
to serve their Medicare
patients yet remain financially viable, they created the Senior VIP program in 2002. For $1,200 a year, seniors receive a physical—a service not covered by Medicare—as well as amenities such as free parking and visits from their physician in the hospital. (The practice is located in the Minneapolis Heart Institute building next to Abbott Northwestern Hospital.)
McLinn says the program worked well because participants got the personal attention they wanted and the practice could bill Medicare for covered services. “But there was this overriding threat from Medicare that maybe some of the benefits—same-day appointments, comprehensive medical care—maybe we cover that,” he says. “Of course, they don’t. But the problem is, who are the judge and jury? They are.”
Rather than change the way they practice, the physicians severed their ties to Medicare for two years starting July 1, 2005. That’s meant signing a contract with each patient indicating that he or she understands that the practice is no longer part of Medicare and that the patient is responsible for the bill. It’s also meant creating a new tiered system of services provided to patients on a cash basis.
Patients can sign up for one of four levels of care. The most comprehensive one costs $3,000 a year and includes an annual physical, hospital care from their primary care physician for as many days as they’re in the hospital, office visits, lab work, same-day appointments, and parking. The second level costs $1,500 a year and includes all but the physical and hospital visits. The third, for $800 a year, includes office visits only. The fourth option is for patients to pay as they go. “None of these amounts is staggering,” says McLinn. “But they do make a difference in terms of our bottom line.”
Since opting out of Medicare, McLinn says the practice has retained about 75 percent of its former Medicare patients who felt the type of care and attention they were getting was worth the price. “There were some patients who couldn’t quite come to grips with this, but every day we’re getting phone calls from them,” he says, adding that they are making arrangements to provide care to long-time patients whom they know can’t afford the tiered system. In the end, he expects the practice will keep about 90 percent of its former Medicare patients.
McLinn says having an established practice (three of the four partners have been in practice for more than 25 years) and providing the type of service their patients are willing to pay for have been the fundamental reasons for their success thus far. “We see 10 to 15 patients per doctor per day,” he says, adding that most of their new patients are referrals from existing ones. “Ninety percent of the time, patients say they can’t see their doctors long enough, can’t talk to them. We sit with our patients until they’re sick of us,” he explains, adding that one of the partners is on call all day, every day.
McLinn says he’s heard from a number of other physicians who are curious about opting out of Medicare and expects to see more of his colleagues follow his path. “They want to know how it’s going and how we’re doing,” he says. “We’re doing great.”
Changing Face of Medicine
Frustrated with the time limits and payment schedules imposed by their employers, Elizabeth and Mark Hagberg got out of family medicine and opened a “medical spa” that does the vast majority of its business on a cash basis.
Graduates of the University of Minnesota Duluth family practice residency program, the Hagbergs got their first taste of corporate medicine working for Kaiser Permanente in the late 1980s and early 1990s. Practicing out of small clinics on the island of Oahu in Hawaii, they soon found themselves caught up in Kaiser’s struggles with how to pay their physicians—on salary or according to the time spent with patients. “Sometimes it was really frustrating,” says Elizabeth Hagberg. “I liked treating my patients and felt I was making a difference. But at the same time, if you feel overworked and need more staff and can’t adequately see everyone you need to see, it becomes frustrating.”
Hagberg felt that same frustration when she and her husband returned to Minnesota in 1992 and worked at clinics in the Twin Cities. “They wanted us to see a patient every 15 to 20 minutes. I had an older patient population, and by the time you got them in the door and talked about their medications, 20 minutes was up.”
Both physicians wanted more control over their work and their lives as they juggled career with the demands of raising three children. “Both of us felt that if we wanted to work hard, we wanted to work hard in our own clinic,” says Hagberg, who became interested in dermatology while working in Hawaii and thought about joining an established dermatology practice in the Twin Cities. “Then I started learning about Botox and lasers and what they could do. One piece of information led to the next. I got very excited about the possibilities of all the technology that’s available with laser treatments for skin diseases and cosmetic procedures.”
With a large investment, which covered startup costs including the purchase of Sciton lasers and remodeling of a former urology office in the Southdale Medical Center in Edina, they opened Skin Rejuvenation Clinic P.A. in January 2005. The idea was to create a practice where the majority of offerings weren’t covered by insurance.
But starting out wasn’t easy. Unlike dermatologists or plastic surgeons who move into nonsurgical cosmetic work, the Hagbergs didn’t have an existing practice from which to draw patients. And advertising proved to be more expensive than they thought. (They’ve since found the best form is recommendations from satisfied patients.)
Hagberg says she, husband Mark, and an esthetician see about 50 patients a week. She hopes to one day have three full-time estheticians at the clinic and to build the business to the point where she and Mark each spend about two-thirds of their time there so they can have more flexibility and be home with their kids when they’re needed. So far, seeing patients and running the clinic has proved to be a more-than-full-time venture for Elizabeth; Mark currently works in the emergency department at Hutchinson Medical Center in addition to putting in hours at the clinic.
Although the practice does 99 percent of its business in cash, Hagberg says they do a small amount of work that’s billed to insurers—a reminder of what she left behind. “It’s a huge exercise in frustration,” she says. “No matter what insurance a patient has, getting them compensated if a mole is removed takes an exorbitant amount of time on the phone and doing paperwork.”
Hagberg says she’s talked to several physicians who are interested in starting similar practices or adding cosmetic, cash-based services, including a cardiologist from Chicago, an ER physician from Minnesota, and some family medicine physicians from the southern part of the state. Her take on the experience: “It’s a lot more freeing,” she says. “I don’t have someone telling me how long I can spend with patients. I can be here as much or as little as I want. I’m the boss.”—Kim Kiser
RENTON, Wash. (AP) - When Chuck O'Brien visits his doctor, they talk about his aches and pains, his heart problems and his diet, but never about his health insurance.
That's because his doctor only accepts cash.
Dr. Vern Cherewatenko is one of a small but growing number of physicians across the country who are dumping complicated insurance contracts in favor of simple cash payments.
When O'Brien leaves the exam room, he writes a check for $50 and he's done - no forms, no ID numbers, no copayments.
"This is traditional medicine. This is what America was like 30 years ago," said O'Brien, 55 and self-employed, who believes he has saved thousands of dollars by dropping his expensive insurance policy and paying cash. "It's a whole world of difference."
Is this the health care wave of the future? Probably not, experts say. Most people are content with monthly premiums and $10 copays; nine out of 10 doctors contract with managed-care companies.
But cash-only medicine is becoming an increasingly attractive option for doctors frustrated by red tape and for the 43 million Americans who lack health insurance.
"It's a terrible indictment of the collapsing health care system," said Arthur Caplan, chairman of the medical ethics department at the University of Pennsylvania Medical School. "Insurance and managed care were supposed to streamline - instead what they've done is add so much paperwork and bureaucracy they're driving some doctors out."
Health insurers downplay the trend, while emphasizing recent efforts to mend tattered relationships between doctors and managed care companies.
"I don't look at it as a threat," said Mohit Ghose, spokesman for the industry group America's Health Insurance Plans. "It's just a different way of practicing."
Medical establishment leaders don't object to doctors working for simple cash.
"This is America. One size does not fit all," said Dr. John C. Nelson, president-elect of the American Medical Association. "We certainly support the physicians' right to do that."
An obstetrician-gynecologist in Salt Lake City, Nelson easily recalled times when he believed managed care rules prevented his patients from getting the best treatment. He said cash-only doctors are driven by the desire to practice medicine without interference.
"There is a great intrusion by third parties into the patient-physician relationship," Nelson said. "We can understand their frustration."
Cherewatenko, a broad-shouldered 45-year-old who wears black jackets and red stethoscopes at work, switched to cash out of desperation six years ago. His suburban Seattle practice was hemorrhaging money, and he and his partners realized they were spending hundreds of thousands of dollars just to process insurance paperwork.
"We said, 'Let's cut out this administrative waste,"' Cherewatenko said. Before, he charged $79 for an office visit and got $43 from an insurance company months later, minus the $20 in staff time it took to collect the payment. Now he charges $50 - and he never worries about collection costs, because patients pay in full after every visit.
Cherewatenko sees fewer patients now. His whole office would probably fit inside his old waiting room. But he says the freedom is worth it.
"Accounts receivable is zero. It's a great feeling," Cherewatenko said. "I feel like I'm a real doctor again."
He started a group called SimpleCare to spread the gospel of cash-only medicine. The organization steers patients to doctors who offer cash discounts, and gives technical and moral support to doctors who want to start cutting their ties to insurance. Membership has grown to 22,000 patient members and 1,500 doctors. Some reject all insurance and take only cash, while others continue to accept insurance while offering discounts of 15 percent to 50 percent for cash-paying patients.
Independent of SimpleCare, doctors in California, Colorado, Minnesota, Texas, Mississippi and other states have also quit the insurance game. Some tired of the paperwork and administrative expenses. Some wanted to spend more time with patients without managed care bean-counters peering over their shoulders. The patients who pay cash range from poor to wealthy, with most in the blue-collar middle.
"When I first started, I thought it would be the elite. That's not the case," said Dr. Shelley Giebel, an obstetrician-gynecologist in Temple, Texas, who washed her hands of insurance eight years ago.
Her standard, hour-long annual checkup costs $140. Everyone pays cash.
If a patient needs extra tests or treatment, Giebel tells them upfront what it will cost.
"If it is an urgent test, we'll go ahead and do it. We're not going to delay medical care because they don't have the money in hand," she said. Often, patients return later with the money.
"It has usually not been a problem that people forgo medical care," she said.
The cash-only movement isn't just changing the way people pay, it's changing the way these doctors work. Because of managed care's low reimbursement rates, doctors on insurance contracts must limit their time with each patient.
Giebel, a typical example, said she would have to double her patient load to make ends meet if she relied on insurance - something she can't imagine. "How can you possibly talk about prevention of cancer and heart disease when you're seeing patients every 12 minutes?" she asked.
Cash-only patients rave about the quality of care.
"They take time here with you," said Jesse Rainwater, a 59-year-old church pastor from Bellevue, Wash., who credits Cherewatenko with teaching him to manage his diabetes. "They don't just bring you in and run you out like a bunch of cattle. You feel like you're loved."
The cash-only approach evokes Norman Rockwell-tinged visions of country doctors being paid with chickens. The simplicity is tempting, but the truth is many people went without preventive health care in those "good old days." A $50 charge can be powerful incentive to delay seeing a doctor until you're in pain - which can lead to more expensive health problems later.
"Medicine used to be a cash-only business, and there were certainly many people who didn't have the cash," said Caplan, the medical ethicist. Doctors who insist on cash also have an ethical obligation to help people who can't afford the fee, he said - even if it means accepting chickens.
Cash crusaders acknowledge the need for some type of insurance. Without it, expensive surgery or hospitalization would force most people into bankruptcy. But they think health insurance should work more like car insurance: you pay for the routine maintenance and little dings yourself, and insurance pays for more expensive repairs.
O'Brien, a freelance marketing specialist, switched from a comprehensive health plan with $300 monthly premiums to a catastrophic plan that costs $75 a month, with a $2,000 deductible. He pays out-of-pocket for routine checkups, and his insurance will kick in if he ever needs expensive care.
The promise of a simple cash payment lured him to Cherewatenko's office, but the doctor's personal attention keeps him coming back. The $50 exams are just part of the bargain for O'Brien. Cherewatenko recently met him for coffee to talk about improving his diet - including an admonition to cut back on caffeine.
"How often does your doctor go out and have a cup of coffee with you?" O'Brien asked.
Cash-only or Concierge Practices Viable Options? This file is available in PDF format which requires Adobe Acrobat Reader, a free download available from Adobe. Please click here to view the file in your current browser window, or right click on the link and select 'Save as' to download and save to your computer.
Most outpatient physicians hate insurance companies (including Medicare). Their pay scales are insulting, and the necessary overhead makes seeing patients minimally profitable. Some physicians have decided to go “old school” and eliminate the insurance companies.
When Chuck O’Brien visits his doctor, they talk about his aches and pains, his heart problems and his diet, but never about his health insurance. That’s because Dr. Vern Cherewatenko is one of a small but growing number of physicians across the country who are dumping complicated insurance contracts in favor of cash.
Is this the health care wave of the future? Probably not, experts say. Most people are content with monthly premiums and $10 copays; nine out of 10 doctors contract with managed-care companies. But cash-only medicine is becoming an increasingly attractive option for doctors frustrated by red tape and for the 43 million Americans who lack health insurance.
“It’s a terrible indictment of the collapsing health care system,'’ said Arthur Caplan, chairman of the medical ethics department at the University of Pennsylvania Medical School. “Insurance and managed care were supposed to streamline — instead what they’ve done is add so much paperwork and bureaucracy they’re driving some doctors out.'’
When O’Brien leaves the exam room, he writes a check for $50 and he’s done — no forms, no ID numbers, no copayments.
“This is traditional medicine. This is what America was like 30 years ago,'’ said O’Brien, 55 and self-employed, who believes he has saved thousands of dollars by dropping his expensive insurance policy and paying cash. “It’s a whole world of difference.'’
Health insurers downplay the trend, while emphasizing recent efforts to mend tattered relationships between doctors and managed care companies.
Cash visits make great sense for patients and physicians.
Cherewatenko, a broad-shouldered 45-year-old who wears black jackets and red stethoscopes at work, switched to cash out of desperation six years ago. His suburban Seattle practice was hemorrhaging money, and he and his partners realized they were spending hundreds of thousands of dollars just to process insurance paperwork.
“We said, ‘Let’s cut out this administrative waste,”’ Cherewatenko said. Before, he charged $79 for an office visit and got $43 from an insurance company months later, minus the $20 in staff time it took to collect the payment. Now he charges $50 — and he never worries about collection costs, because patients pay in full after every visit.
Cherewatenko sees fewer patients now. His whole office would probably fit inside his old waiting room. But he says the freedom is worth it.
“Accounts receivable is zero. It’s a great feeling,'’ Cherewatenko said. “I feel like I’m a real doctor again.'’
He started a group called SimpleCare to spread the gospel of cash-only medicine. The organization steers patients to doctors who offer cash discounts, and gives technical and moral support to doctors who want to start cutting their ties to insurance. Membership has grown to 22,000 patient members and 1,500 doctors. Some reject all insurance and take only cash, while others continue to accept insurance while offering discounts of 15 percent to 50 percent for cash-paying patients.
Independent of SimpleCare, doctors in California, Colorado, Minnesota, Texas, Mississippi and other states have also quit the insurance game. Some tired of the paperwork and administrative expenses. Some wanted to spend more time with patients without managed care bean-counters peering over their shoulders. The patients who pay cash range from poor to wealthy, with most in the blue-collar middle.
Medicine is a business and as with any business, money matters.
By Douglas J. Jorgensen, DO, CPC
As reimbursement diminishes and more onerous documentation requirements evolve, one wonders when or if a more fair and expeditious system will come to fruition.
Obviously, some forms of reimbursement pay better than others do. Yet, how can we as physicians be impartial as to what payors we accept? Furthermore, how do we avoid feeling like we are making decisions based on one’s insurance rather than medical necessity? From a federal stance, making medical decisions based on available benefits is tantamount to fraud. Medically, it is not only a poor practice, but questionably unethical.
However, we are faced with these decisions daily. In peer review cases and in our own practices, social admissions or adjusting a diagnosis code to “help” a patient get the services covered is akin to running a yellow light or rolling through a stop sign.
However, I would argue that one must be careful in this respect as it is a slippery slope and the ramifications could be penal resulting in financial or criminal prosecution. And perhaps more devastating, one’s license to practice medicine could be permanently revoked. Ironically, this could occur with the most noble of intentions when you are trying to help the neediest patients.
A Financial Review In light of these issues making reimbursement difficult, a critical look at these and other areas germane to your practice’s financial stability need to be reviewed.
To review financial matters, one issue that must be discussed is money. It has long been a faux pas to discuss money when discussing medical care of our patients. It is rarely, if ever, reviewed in medical school and residencies are only starting to address practice management issues. This lack of preparation leaves new doctors unprepared to enter practice.
What we must all realize is that medicine is a business—a business of caring for people, but a business nonetheless. If we wish to keep our doors open, then we must be good at this business of medicine or we will no longer be there for our patients.
In the last decade, we saw many private practices being bought up by larger multispecialty groups. It seemed the days of the solo or partner type practices were over.
However, in recent years, the pendulum is shifting and more doctors are realizing that they can make it on their own, with more autonomy and discretion as to their practice’s direction, focus and financial concerns. Many doctors are still within employed venues and are paid on an incentive basis.
Knowing what your services pay and how your services are billed will give you more control and knowledge of your practice and your income in this setting as well. While antitrust issues disallow you to find out what a colleague on the other side of town charges, you fortunately have a standard by which to measure what you can charge.
The RVU or relative value unit system exists to create more uniformity based on regional, demographic data that allows you to standardize your office fees. Most practices have an RVU schedule for standard E&M (evaluation and management) services and another for procedural services.
For example, a 99213 is worth approximately one RVU. If you charged $70/RVU, the 99213 would be billed out as $70. If your procedure codes were set at $100/RVU and you did a procedure that was worth 2.5 RVUs, then the bill would be $175 (2.5 x $70 = $175). The amount designated to multiply against the RVU is up to your practice. It should never be less than what Medicare will reimburse you and really should be at least as much your best payor reimburses.
The only downside to having it set rather high is the write off at the end of the year. However, as you will see below, depending on your payor mix, it could benefit you to have higher rates in the long run.
This article will focus on issues surrounding reimbursement and help to more clearly elucidate, and correct some routine practices that could border on illegal or potentially fraudulent practice. Remember that these are general guidelines. Each state varies in its individual regulations. Thus, check with a healthcare attorney, your specific payors and/or your state and specialty medical societies for more specific information as it pertains to your particular practice issues.
Time of Service Discount
Cash paying patients are increasingly uncommon, but in more urban and suburban settings, patients with the means to do so, would prefer to avoid the hassles of dealing with their insurer. Providers often code down the visit or do not list on the encounter form all the issues that will be in the note to avoid having escalating the bill. An option available is to offer a time of service or cash discount for payment provided the same day as services rendered.
Some practices offer a 30-40 percent reduction in the total fee. Thus, a 40 percent discount for a $150 office fee would result in a cash payment to your practice of $90. No collection, no waiting for the insurer to pay you and your patient who has no insurance gets a very reasonable deal. Cash or checks are still commonly used, but most patients now use their ATM cards or credit cards for payments.
If you do not already do so, it would behoove you to take credit cards as well, as these have become very user-friendly and most practices now accept them. The fees per transaction are nominal compared to the convenience of increasing your cash flow without a delay on the turn around time from the payor. Many clearinghouses that do electronic billing can also assist you in establishing this form of payment for your practice if you simply inquire about it.
The issue that I am most commonly asked about cash discounts is “Is this legal?” The short answer is “yes”. The fear by many is that if your third-party payors find out about this, they will demand a discount for their beneficiaries as well. They would be entitled to the discount if they paid you on the same day services were rendered. Most do not pay you for weeks to months, so the point is mute.
However, if at some point the payors reimbursement system evolves to be able to pay us on the same date we see their patients we can revisit this office policy and modify it as necessary. However, the likelihood of this happening anytime soon is small for most prefer to scrutinize claims before reimbursing them.
Again, check with your local healthcare attorney as contractual agreements with various third-party payors could present unique circumstances for your practice regarding this option. Remember, there are a good number of doctors who only accept cash and many are doing quite well. If you still want to charge a fair fee to your cash paying patients, you could opt not to give the discount and keep your fees low. However, this would work against you when you bill the worker’s compensation or personal injury cases.
Copays
Copays account for approximately 20 percent of the revenue that comes through your office. In a four-doctor practice with each family doctor grossing $250,000 (a conservative estimate), that means there is about $200,000 going across your checkout desk each year.
Some practices I have seen have a collection rate of 50 percent, some 80 percent. The goal should be 90-100 percent. The reason being, if you are losing $100,000 or even $40,000 for lack of, or incorrect copay collections, you are losing revenue that could perhaps cover several staff salaries, not to mention possibly provide production bonuses for your organization.
Key areas where copays are missed are: old insurance cards, forgot my wallet, didn’t know I had a copay, staff not asking or forgetting to collect, or you are having it waived as a courtesy to a friend or colleague.
Regarding the old insurance card, each visit should commence with a verification of insurance and demographic information. Asking is “everything still the same?” is inadequate. Instead ask “do you still live at 435 Elm Street?” and is your telephone number still 323-6434 and then check to see that their insurance card has not expired. This issue should be addressed as part of your compliance plan for your practice.
Forgetting a wallet or purse happens. Simply direct your staff to request they retrieve it from the car now or make them aware that they will be billed. Some practices will not see the patient for the next visit until the copay from the previous visit(s) is resolved. You and your colleagues need to determine the policy you would like to enforce, and stick to it.
Waiving copays have resulted in federal sanctions and private payors removing doctors from their participating provider list. Your federal and private payor contracts, in most instances, stipulate that you are to collect copays with E&M services. Not only is this part of the money owed to you, it is contractually your responsibility to collect it.
The same goes for the 20 percent due from your Medicare beneficiaries if they do not have a secondary insurer to balance bill. You must collect these monies, for it is vital to your practice’s fiscal health and part of a binding contract. Therefore, educate your staff on the importance of the copay and balance billing, as they are crucial to the vitality of your practice.
Professional Courtesy
The Office of the Inspector General in its compliance plan recommendations specifically discussed this issue. Contrary to what many consultants claim, it is not illegal. However, the point at hand is the relationship of the person you are seeing under this courtesy and how it might impact your practice. If the person you are seeing (or his/her partner, spouse, child, parent, etc.) is a referral source or someone with whom you may have a potential business relationship, regardless of how remote, you must bill him/her in the usual manner.
The perceived impropriety by the federal government is all that is necessary for this courtesy visit to be seen as an inducement and subsequent referrals or other patient encounters (use of your lab or x-ray equipment) could be seen as kickbacks for your free treatment. It is not worth the risk to you and your practice.
Another commonly used tactic to avoid a paper trail of this visit is to not document the visit. The most innocent and friendly interactions in a medical setting have the possibility of becoming potentially litigious. Thus, it is against common medical-legal thought to perform or provide medical services without documenting them. Again, check with your local attorney for his/her advice, but it will likely be conservative and advise against this practice.
Worker’s Compensation
Worker’s compensation is a state and federally funded program designed to pay for expenses due to an injury that was deemed work related or if the injury itself did not occur at work, but work ‘significantly’ worsened the existing medical problem.
Regulations vary from state to state, but usually the reimbursement is much better than third party payors or other state or federal programs. The biggest issue with these programs is the amount of paperwork and, at times, letter writing required to keep the employer and the agencies up to date on the patient’s condition. Some organizations do not take worker’s comp due to the perceived hassles and occasional delayed payments. However, since the reimbursement is better than average, one might put systems in place to make the visits move more smoothly.
Usually, the organization for whom the patient works has a particular form they need filled out specifying the date of injury, type of injury, do you think it was work related, anticipated length of treatment, type of diagnostic testing being done, treatment and/or medications being used, ICD and CPT codes to define the exact medical issues at hand and then a descriptor of the patients ability to work, and if so, with what restrictions if any.
The paperwork, while cumbersome, is often redundant, so keeping a copy of the previous records is helpful at the next visit and necessary for good record keeping. Templated work letters to employers and lawyers also expedite things for, other than the diagnosis, treatment and timetable, much of the letter can be recycled.
MVA/Personal Injury Many providers cringe at the patient list for the day when they see an MVA appointment. Motor vehicle accidents usually involve attorneys, automobile insurers and possible defense attorneys from the other driver(s) involved. Much like the worker’s comp situation, there is a great deal of redundant paperwork. Therefore, templated letters and other systems can expedite claims and paperwork.
Furthermore, as osteopathic physicians, we are often sought out to evaluate and treat these patients. This eliminates the need for yet another practitioner to become involved.
The good news here is these visits pay cash and usually pay your asking price. The downfall is that it could take months to years to get paid. Some practices with which I am familiar have accounts receivable over seven figures. However, in the proper setting, this can be a mutually beneficial relationship for the patient and your practice.
Patients who work with attorneys should sign a lien letter stipulating that your fees will be paid in full out of the settlement. A copy should be made and then the original, with the patient’s signature, should be sent to their attorney for signature. If the patient will not sign the lien letter, you can collect cash and have them bill the attorney or the insurer themselves. In some instances, billing the insurer directly results in prompt payment and eliminates the attorney’s involvement and the fee to your patient for submitting the same bill.
Again, letters can be templated to make this entire process more expeditious. Fees can also be billed for record requests as going through the chart and copying germane entries takes valuable time away from your staff’s other duties.
Lastly, you could be subpoenaed to testify. Your practice should come up with a uniform fee schedule for depositions that takes into account what your hourly dollar value is. Many, if not most doctors, underestimate this fee. Consult your local healthcare attorney for more details on these letters, regulations and your options in your particular state.
Third-Party Payors Truth be told, some payors pay better than others and some are easier to work with than others. Guess what? It’s your practice and you should decide whom you want to work with or not.
If in a group setting, sit down and have a frank discussion with your colleagues and practice manager. If a particular payor is reimbursing poorly and routinely denies claims or is a hassle with which to deal, consider whether they represent a significant portion of your patient population.
If you can afford to do so, remove your practice’s providers as participating members. If you cannot afford to do so, use the state bureau of insurance to file complaints and your state medical society to intervene on your behalf as well as utilizing your national organization to help support your efforts. Do not sit by and be bullied into submission.
Is it idealistic or even utopian to think you will get a positive outcome? Perhaps. But we need to begin to formally take a position as physicians that we will utilize all means necessary to alleviate the burdens placed on us and, in the end, hope to improve our reimbursement outcomes.
If you cannot resolve issues and you need the current patient load from this payor, your other option is to close your practice to new patients for that particular payor. We are so used to the insurers dictating the rules, we often forget that we have options and we can put ourselves back in the driver’s seat.
Medicare/Medicaid These payors are usually the most consistent, but often the most feared due to the lay press and folklore stories of audits, fines and possible criminal prosecution. However, some states mandate the percentage of your patient population that must be from Medicaid in order to maintain your license in that state. Additionally, many providers feel an ethical responsibility to take care of patients on state and/or federal programs.
While the reimbursement from these payors is usually consistent, it is also typically comparatively low. Therefore, providers are, in some instances, starting to limit their practices to only established Medicare and Medicaid patients.
If you work in an FQHC or RHC (federally qualified health center or rural health center) you receive a fixed fee for these patient’s visits regardless of the level billed (99214 is reimbursed the same as a 99212). Diagnostic testing is not billed in these facilities as it is coupled in with the higher reimbursement at and FQHC or RHC.
Some offices are using nurse educators to provide high quality education and monitoring for diabetes, hypertension, coronary artery disease, smoking cessation, obesity, etc. The educator sets up visits at the discretion of the doctor to assist in the care of the patient’s chronic condition. The sessions are overseen by a provider who can bill an established patient visit utilizing the history obtained by the nurse educator. The provider need not be present for the entire visit.
However, the provider must perform and document the exam, but to bill 99212, it could simply be confirmation of vitals or a general constitutional exam. Additionally the provider should do the note in SOAP format. If the medications need to be adjusted, it is certainly reasonable to bill the appropriate level visit, which could be a higher level.
To bill a higher level, the history, exam and the medical decision-making would need to justify this.1 Please be certain that it is not the intent of this author to recommend upcoding. However, these beneficiaries can at times be some of the more medically needy and could very much benefit from such a program.
Furthermore, several successful programs exist with good clinical outcomes at institutions across the country. These programs are not limited to state and/or federal beneficiaries and therefore could be applied to private payors as well. Design of these programs should be well thought out, as should the documentation needed to make these legitimate for billing purposes. Seeking professional advice regarding this is strongly advised.
Summary
As one can see, there are myriad of ways reimbursement may not be as optimal as it could be. Some of the ideas outlined above may already be part of your daily routine and may simply need some fine-tuning.
It is imperative to utilize the resources available to you and your office to maximize your efficiency. The templates and well-designed educational programs may be able to meet these objectives while offering a new venue for reimbursement in your practice. It is imperative that you have competent healthcare counsel to review matters prior to implementation.
However, these ideas coupled with adherence to the federal documentation guidelines and your contractual agreements with your payors will keep you comfortably within the boundaries of allowable practice standards.
References: 1. Jorgensen, D.J.; History: A Vital Clinical and Coding Element (and) Examining the Physical Examination and Deciding on Medical Decision Making; Osteopathic Family Physician; January and February 2001.
Douglas Jorgensen, DO, CPC is a family physician with Manchester Osteopathic Healthcare in Manchester, Maine. He is a Certified Professional Coder and founder of Jorgensen Consulting, a national professional services organization offering educational forums and coding consultation. He can be contacted via e-mail at
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RENTON, Wash. (AP) - When Chuck O'Brien visits his doctor, they talk about his aches and pains, his heart problems and his diet, but never about his health insurance.
Most outpatient physicians hate insurance companies (including Medicare). Their pay scales are insulting, and the necessary overhead makes seeing patients minimally profitable. Some physicians have decided to go “old school” and eliminate the insurance companies.
As reimbursement diminishes and more onerous documentation requirements evolve, one wonders when or if a more fair and expeditious system will come to fruition.