Cash Practice

When opening their offices, many Nurse Practitioners look for ways to meet the needs of the uninsured and under-insured patient. This can often be a challenge because of several rules and regulations are in place regarding fee schedules particularly with Medicare. For instance it’s my understanding that you cannot bill a patient less than your Medicare allowable.

In the most recent issue of Family Practice Management, Brian R. Forrest, M.D. discusses the business model where he only sees patients for a flat fee. He does not take Medicare nor does he use sign any other insurance contracts. And according to his article, he is able to cover his overhead on four visits per day, hence the title of his article Breaking Even on 4 Visits per Day.

One of the most appealing things about this type of the model, is that you do not have to deal with billing insurance companies. A great deal our time is spent talking with insurance companies about coding, why they rejected a claim, and what we can do to get this claim paid. Between that, all the prior authorizations that we have to obtain for prescriptions or referrals, you almost need to hire one full-time person. It’s a very frustrating and an efficient way to provide health care.

Another Nurse Practitioner in our town recently opened her practice. She is only the second NP to own her own practice in our area (I, being the first). Her model initially was to be cash only in to see people on a walk-in basis. With the number of uninsured people in our community she felt it would be a great service. In addition she is fluent in Spanish and had hoped to reach that community as well. However what she found was that people still didn’t want to pay, even though her fee schedule is far less than an individual would have to pay elsewhere.

While I am not giving up on the model that Dr. Forrest proposes, I will still need to do much research to see how I could make it work in my community.

Read the article, think about it, and look at your own community. This is something that could work for you in your community? Could you do this by joining forces with another nurse practitioner and sharing resources?

Comments 2

  1. I think it needs to be an individual practice decision. I have looked at the area where I am starting, and 80% of the people love to use debit cards, and have insurance. I learned from working in the same town for the Retail company TakeCare, that patients really do not carry cash around, and if they do have insurance, they will walk away and drive 30 miles, so they save 30.00. I do not know that I would do that personally. But do to this factor, despite the incredible work and time it takes, I feel I need to get credentialed with as many insurance companies as possible. We do have one massage therapist in the building that is credentialed with many, and the other one takes only cash/checks. They both do ok, but that is massage, which patients have different expectations. Also, massage is not always reimbursed by insurance and most patients do not hold that expectation. It is a great article by Brian Forrest that you provided though . I have also found that Qwest labs is willing to provide a “provider” lab price, so if patients pay up front for their labs, to the provider, it will cost them less, than if they just pay for the provider visit, and then get a bill from the lab. You can contract with Qwest, and list your most common panels, and get a price sheet for your patients. Then if you draw their labs right there at the office, they can pay you up front. But if they have insurance, I would just send the copy of the insurance with the labs for the courier, and just bill them for the visit. Carla

  2. Another option is to offer a prompt pay discount at time of service and/or for a limited period post visit. The Medicare guidelines are specific about not charging anyone any different than Medicare. So if you charge someone $50 for a 99212 visit, that charge must be consistent across the board to Medicare, Medicaid, insured and cash paying folks. But it is permissible to offer those paying at time of service a percentage discount. Say 20%.

    Many “fee schedules” are based on Medicare. I have heard that 150% of Medicare allowable is the going rate. That may increase the revenue generated from insurances but it hurts the self-pay patient and may price you out of the market for the self-pay patient or the patient who has a huge deductible.

    We must be mindful of remaining viable in our respective markets. I try to charge similar rates to those offices around me.

    An old DO had a cash only practice a few miles from where I am located. He charged $25 per visit, kept no records, had no staff, billed no insurances. You walked in, looked around and when everyone else who was there when you walked in was gone, it’s your turn. His patients loved him. No one would have ever considered suing him. Life was straight forward. He retired in January 2006; his absence may be one of the contributing factors to my success. His business model showed me that in the right environment and circumstances a cash practice is viable.

    I am entirely too aware of the litigious nature of people today to try anything without record keeping, though!

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