Out-of-network: Why some DOs don’t take insurance
For Charles Beck, DO, the glimpse of the insurance system he got as a resident was enough to make him consider alternatives.
“What I recognized is if I took insurance, I would be working for somebody else,” he says. “I wouldn’t be working for me. I would see patients for as long as they tell me to, and I would have to do what they tell me to do to the patients. I couldn’t run my own ship.”
Inspired by a mentor, Dr. Beck opened a cash-only osteopathic manipulative medicine practice in Indianapolis in 2007, after he finished residency. Initially, he worked just two days a week, which was enough to pay his relatively low bills.
“I can’t imagine why physicians would want to run a different kind of practice,” he says.
Twenty years earlier and across the country, Melvin Friedman, DO, had similar sentiments. Post-residency, Dr. Friedman tried working within an insurance-based system. In 1985, he joined a large family medicine practice that was among the first groups doing HMOs and managed care in the San Francisco peninsula. The group provided great care, he says, but it was hard for him to work with so many patients and have the life he wanted outside work.
“I have a lot of Medicare patients, but I don’t take Medicare. I’ll negotiate a fee with them. I’ll ask, ‘What’s comfortable for you to pay?’ ”
In Dr. Friedman’s practice, physicians were scheduled to see a patient every 15-20 minutes from 9 a.m. to noon and in the afternoon from 2 to 5.
“In order to do that, I used to start work at 7 a.m., work through lunch, and stay until 10 p.m. to see the same number of people that my older colleagues were seeing,” he says. “It took me longer to practice what I believe is good health care, which involves finding out about the whole person and trying to find the root cause of their suffering.”
Dr. Friedman started a cash-only OMM practice in San Mateo, Calif., in 1987. Now, he books patients for one-hour visits and his workday runs from 8:30 a.m. to 7 p.m. He shares a conversation he had with a friend who also operated a cash-only practice back in 1987.
“He told me, ‘Hang tough, it’ll take you two to three years to get going, but when you get going, you’ll have what every doctor always dreamed of as a kid who wanted to be a doctor,’ ” he says. “And he was exactly right.”
Why many go cash-free
Many osteopathic manipulative medicine specialists opt to start cash-only practices in part because it’s difficult to get reimbursed for osteopathic manipulative treatment, says Karen T. Snider, DO, a professor in the OMM department at A.T. Still University-Kirksville (Mo.) College of Osteopathic Medicine.
“Basically if you perform the physical exam on the same day you decide to perform a procedure, then a lot of insurance companies automatically have a trigger that when the modifier 25 comes through, there’s an automatic reject,” she says. “We’ve been told this on the phone by insurance companies.”
Hard data on just how many physicians overall operate cash-only practices are hard to come by, but a 2005-06 Centers for Disease Control and Prevention survey revealed that 11% of physicians reported having no managed care contracts. In the 2003-04 survey, 9.8% reported not having any.
OMM specialists who do take insurance can spend a lot of time securing proper reimbursement, Dr. Snider says, and each moment spent negotiating with an insurance company means less time for—and income from—patient care.
Daniel Shadoan, DO, saw this happen more than once in the early 2000s during his rotations as a medical student. And sometimes, the physician was unable to get appropriately reimbursed.
“A doctor whom I worked with had an insurance company renegotiate his contracted rate after he had already provided services,” he says. “He had something like a $20,000 to $30,000 reduction in his fees for a year’s worth of work, after providing the care. And there was nothing he could do.”
Dr. Shadoan started a cash-only OMM practice in San Francisco after residency. He says insurance companies drive away physicians who specialize in OMM.
“It’s not me opting out of the insurance companies,” he says “It’s the insurance companies choosing to not reimburse my time—our time, as a specialty—and to not value what we’re providing.”
Another problem with the system, Dr. Shadoan says, is that Medicare doesn’t reimburse for OMT as preventive or maintenance care, and this deters physicians from providing the care they would like to their patients. Thus, he cites independence as one of the greatest benefits of running a cash-only practice.
“I can choose exactly how often I see a patient based on medical requirements, not based on what his or her insurance will pay,” he says.
Pros and cons of cash-only
Dr. Beck too lists autonomy as one of the top perks of cash-only, as well as the peace of mind that comes with it.
“I feel like I know what’s best for my patient. If someone who didn’t know the patient, who didn’t know me, got to tell me what to do, it wouldn’t sit well with me,” he says. “I have nobody to answer to but myself and the patient.”
Other benefits of operating a cash-only practice include less administrative overhead. Dr. Beck says he spends roughly three minutes per appointment on paperwork.
“As long as I have a couple of lines about what happened and some information about how I put together the bill, I’m done,” he says. “I don’t have to make sure it meets this criteria or that criteria, and that is huge. A lot of my friends will say, ‘Whatever time I spend in the office visit, I spend exactly that much time again on paperwork—but I have to do the paperwork at the end of the day.’ So they’re in the office until 7, 8, 9 at night.”