Cash vs. Insurance: What’s Right for You?

by Bharon Hoag – Executive Director of the Ohio State Chiropractic Association

The debate over whether to maintain an insurance-based practice or convert to a seemingly less troublesome cash basis is one that doesn’t go away. Many doctors straddle the fence, bending first in one direction, then in another, looking for the best answer. The fact is, there isn’t one that applies universally. The right decision relates to an amalgam of skill sets, objectives and knowledge, and what is right for one practice might be totally wrong for another.

Too often, doctors lurch into a cash practice because they don’t want to deal with insurance company issues. They don’t understand the insurance processes and the concepts behind proving medical necessity. They see their relationship with third-party payers as one of constant struggle, contributing to a professional life dogged by fears of audits, denials and payback demands. But instead of obtaining the knowledge they need to prosper within the boundaries of this environment, they run from it.

Facing the issues

What do they get? They get another set of issues that may be even more difficult to deal with than the one they left.

Where insurance-based compensation is relatively predictable, primarily based on the Current Procedural Technology (CPT) codes, a cash practice can often resemble an oriental bazaar in which the doctor gets whatever he/she can from often reluctant patients. (Insurance companies at least profess a rationale for price resistance.)

The initial effect — since doctors, like most people, don’t like to haggle about money – is to charge lower rates. The ultimate result is that the doctor must see twice as many patients to derive the same income as under the insurance-based model.

A second issue might be termed “game-playing” with patients. Doctors all have experience with patients who are less than religious about conforming to the recovery plan. Absent constant nudging and cajoling by the doctor, patients can become lax about their home treatment responsibilities; they miss scheduled visits; they begin to question the efficacy of the treatment program; they resist payment; finally, they stop coming altogether. The impact is both fiscal and emotional; nurturing (nagging) patients to participate in their own recovery can be exhausting.

Third, charging less per visit inherently means that to maintain a comparable income level, a steady stream of new patients must be attracted to the practice. Either the doctor or the practice staff must engage in an ongoing program of marketing in order to keep the practice name in front of potential new clientele. This involves various types of community and professional outreach that is sometimes successful, sometimes not, but which is always energy and time-consuming.

Know the rules

All things considered, then, getting rid of the insurance headaches doesn’t eliminate problems; it just substitutes a new set that require ongoing, long-term attention. Conversely, doctors who learn the rules governing insurance reimbursement usually find that once they know them and practice by them, their income stream can be almost self-maintaining.

Importantly, being part of the insurance-compensated community underscores your primary care physician status as defined by state law in every state and under virtually all payment schedules. So defined, Chiropractors can conduct examinations; diagnose problems; design and execute treatment plans and monitor/ report on patient progress and outcomes. And they can charge for their services with reasonable assurance that they will be paid.

They can also establish mutually beneficial relationships with other healthcare specialties, referring patients to them as appropriate and accepting referrals for cases such as chronic pain, workers compensation and personal injury.

The acceptance factor

Chiropractic has fought the battle for acceptance virtually since its inception well over a century ago. This accomplished, Chiropractic is now recognized for reimbursement by Medicare/Medicaid and correspondingly by the insurance community — not something to be surrendered lightly. It is a hard fact that should chiropractors stop submitting claims in the healthcare model they could easily lose their professional status as true physicians and be relegated to that of physical and/or massage therapists – valued and valuable specialists but not generally considered healthcare professionals.

Hard choices?

It is of course possible for a chiropractor to build successful cash practice, if done for the right reasons and given the right set of circumstances.

No doctor should take this step if he/she has any reluctance or ambivalence about addressing the money issue.  It’s all pretty abstract when dealing with insurance companies and your patients only have to contend with co-pays and deductibles. When they are confronted with paying the full freight it is a different story altogether, so the cash practice makes the most sense in environments where cash constraints are less an issue.

Retention is a second factor. One of the perceived benefits of a cash practice is that the doctor doesn’t have to prove medical necessity formally. That does not mean that he/she can be cavalier about the design and execution of the treatment plan. Patients are not fools and if what the doctor does isn’t making sense, the patients will stop coming. Moreover, the doctor must understand that the time saved by avoiding the notes and reports processes will likely be consumed by more comprehensive discussions with the patients.

Finally, it is true that avoiding the detailed communications required by third-party payers will save a lot of front office time. However, that time will still be spent; just on different activities – primarily marketing and administration.

Conclusion

In the great contemporary musical, “Fiddler on the Roof,” the central character, Tevye, constantly ruminates over decisions, as in “…on the other hand… .” Both cash and insurance practices make sense, given the appropriate passions, strengths and skill sets. Some doctors see less hassle and more opportunity in going cash. Others see consistency and stability in insurance, opting to acquire the training and knowledge that is required to establish a comfort level with the strictures and structures of medical necessity. The key consideration is to know where you want to go and how to get there, and to get help in reaching your objectives if you need it.