The paperwork, hassles, it can get overwhelming!
Looking into a Cash Payment practice?
by Melissa Tijerino
Are you fed up with declining insurance payments? More and more Doctors and Clinicians are opting out of the insurance system completely. Some Physicians have gone the cash route and are loving it! They say there is more time for what matters, the clients, and are able to provide higher–quality health care. They knew there had to be a better way to practice. Cutting out the insurer as the middleman can significantly reduce the providers administrative and billing costs. Providers who accept cash upfront also do not have to chase the money down later either, from the insurance company or the patient.
Let’s talk more about how you can transition your practice from insurance to cash payments, without scaring away your clients!
Understanding your ''why''
Determining your motive will help steer the ship in the right direction as you go through the process of transitioning, there are so many reasons why clinicians would want to switch to cash payments.
This includes having less paperwork to fill out after each session, the ability to set your own rates and being more flexible with your clients when it comes to their sessions.
You’ll also offer a higher level of privacy since there won’t be a reason for you to send any paperwork or diagnosis over to their insurance company
Once you decide that making the switch is right for you, it’s time to come up with a strategy to accomplish this.
Set a strategy
Once you understand your “why” behind transitioning to cash payment, it’s now time to consider the “how”. Let's look into a few questions you should ask yourself when coming up with a strategy that is specific to you and your practice.
Which insurance is the most difficult to deal with as far as billing?
Which insurance brings you the most clientele?
What insurance do the majority of your clients have?
These are the types of questions that will guide your exit strategy and make for a smooth transition, for both you and your clients!
Research prices & compare
Healthcare prices can vary, depending on your local area and your practices’ specialty, it’s important to research.
First, give your insurance companies that you are in network with a call or check their website to see a cost estimate of your procedures and testings, you’ll also have to consider copayments as well as coinsurance, which requires the clients to pay a percentage of the cost of a particular procedure or service (usually 20%) Then see if you’d benefit from accepting cash payments instead.
Get policies in place
Now that you’re fully dedicated to the transition to cash payment only, it’s time to get organized! Let’s start by getting your practice payment policies drawn up.
This is a great time to reference back to your prices you set for your practice, and don’t forget to charge for your expertise, experience, and specialization!
You’ll also want to keep in mind of the level of support you’ll provide around out-of-network billing, here are 3 options to consider:
Courtesy Billing: You submit claims to the insurance company on behalf of your client, and the client receives reimbursement, which means the client would pay the full price at the time of their session
Super Billing: You give the client a claim, the client submits to the insurance company for reimbursement. The client will pay the full fee at the time of their session
Direct Billing: You submit claims directly to the insurance company and receive reimbursement. The client pays only the amount that will not be reimbursed at the time of session
Whatever path you decide to take, you’ll want to make sure you have out-of-network claims forms created and printed out for your clients. By having this information ready and available - and a straightforward form to back it - your clients will feel like you’re on their side and have a less chance of becoming frustrated with this unique and complex process.
Communicate with your clients
One of the last steps in this transition process is to communicate with your existing clients. There may be lots of questions or concerns, since this change will impact all of your clients who use insurance to pay for their sessions.
Consider practicing how you’ll bring up the policy changes to all your clients, you could bring it up in their sessions, or you might want to send out a letter or an email informing them of the transition. Some clients may ask about payment options moving forward, to which you can offer information on how to use out-of-network benefits - including the benefits of using this approach, such as the increased privacy as we mentioned above.
Many clients may not be able to afford the session fees and might affect their ability to attend therapy with you, this would be a great time to offer a sliding scale. This would let your current clients continue to see you, but at a lower price that works for their financial situation.
Another great way to set your clients up with financial comfort is to explore single case agreements with a wider healthcare team. This means, you’ll partner up with a health clinic or system and provide select clients with services at an established rate, perhaps lower than your session fees.
In the end, some clients may not be able to afford your private practice fees, even if you want to help these clients, make sure your practice private pay is first a business decision made for the success and longevity of your practice! Don’t feel bad about making this decision, you’ll ensure that you’ll be available to help clients in the future by keeping the doors open for them.
Once you have completed your research on pricing, have your policies in place, and have communicated this change with your clients, it’s time to slowly transition into cash payments for your services.
To make the transition easy, we suggest dropping one insurance panel every 6 months.
It takes about 60 days to get off the panels, let your clients know you would continue to accept the rate of their insurance and give them a super bill after their session so that they could submit it to their insurance for reimbursement.
You could also let them know you would charge their session on their CC so that the lag time between paying that CC bill and receiving reimbursement would be small if any.
If they did not have one, you could put them in groups which could be sometimes the cost of their copayment anyway.
Groups are an awesome way for growth and they love them! I probably lost 10% of my clientele from the switch
It’s an exciting moment in all private practices, when they transition to private pay. Don’t forget to celebrate your success and reflect on the long journey that it took to get your practice set up. You’re doing amazing work and this is one of the ways you can celebrate yourself!