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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?’ ”
Dr. Friedman

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.”

16 Responses

  1. robert migliorino,d.o. on Feb. 1, 2013, 2:32 p.m.

    How true…if a group offers big money,red flag!They,like dentists expect big production numbers & assembly line prescribing!

  2. Tommy on Feb. 1, 2013, 3:12 p.m.

    I bet there are all kinds of ways to treat patients correctly and wholeheartedly and still have a warm meal and soft pillow at the end of the day. I feel blessed to know that I will be an Osteopathic physician, instilled with the “blazing trail” philosophy that allows for new and adventurous ways in healing. I like to do things… a little differently.

  3. Judith O'Connell, DO,MHA,FAAO on Feb. 1, 2013, 3:18 p.m.

    As a physician who was primarily cash only for 25 years I appreciate the above. I have for the last 6 years been on insurance panels to address the needs of my patients who no longer have the economic ability to pay cash for services. A difficult decision economically, but the right decision ethically. All providers have unique circumstances and must make decisions based on those. Our practice has exploded since we have gone on limited insurance panels so the demand for OMT is great in our community and is not being met. Babies, children, pregnant mom’s, military families, and all walks and ages have benefited from osteopathic treatment and care because of this. I suggest OMT specialists consider the access they provide to quality osteopathic care as they decide whether or not cash only is the best for them and their patients.

  4. John M. Spine, D.O. on Feb. 1, 2013, 3:56 p.m.

    Eggs. Really?

  5. Bill Kirmes D.O. on Feb. 1, 2013, 4:33 p.m.

    I’m still playing the insurance game after 34 years in an OMM practice. As soon as Obamacare and all the other foolishnish kicks in I will be forced to go to a cash only practice. I will also be transitioning into another business far apart from medicine. Can’t wait….

  6. Michele Coleman, DO on Feb. 1, 2013, 6:22 p.m.

    I’m just starting my own practice, after leaving a group practice that wanted me to see 4-5 patients an hour and didn’t really understand OMT. I wish that it was possible to start and maintain a cash only practice in the small town I live in, but I don’t think I can do that and pay the bills. Too many of my patients are on limited incomes and have to use insurance to get the care they need. I hope that I will be able to take this excellent advice someday.

  7. Marianne Herr-Paul, D.O. on Feb. 1, 2013, 6:41 p.m.

    I have a cash-only practice, except that I am a “non-participating provider” for Medicare. I practice Biodynamic OMM, with integrative medicine consulting. I see one patient an hour, new patients take 1-1/2 to 2 hours. It is intensive, demanding, delightful, challenging, and fulfilling. Over 90 % of my patients are highly motivated by the cash-pay approach. If they are financially destitute, but determined, we offer all kinds of discounts and slow-pay options (on a case by case basis). Being able to see my elderly Medicare patients, on fixed income, despite the Medicare “discount” (I have to charge what “non-participating provider” rosters allow), gives me a great deal of satisfaction. They are lovely, attentive, and grateful. While my husband (my only employee and does everything else) has to be a steady advocate, many patients do get reimbursed through their mainstream insurance companies. And I have managed to qualify for meaningful use, although have not yet seen the check. There are days I am overwhelmed, but if you are practicing full steam ahead, there are going to be those kind of days. Cash pay with Medicare is quite interesting, and possible.

  8. Jose Camacho on Feb. 2, 2013, 1:03 a.m.

    Hi Friends. We practice like Marianne, Dan, Mel, and Charlie and others. We are 100% OMT and 100% cash, not on any insurance plans. Our patients also love it and get a lot out of our care. We do have one other option for those who can’t see us, we send them to the local osteopathic clinics where osteopathy is practiced or to the nearby osteopathic medical school, COMP. One thing I would say differently from Charlie is that our chart notes do have to meet the same medicare requirements for all our patients. Why? because if our chart notes are pulled, for a MVA or just insurance reimbursement and the “T’s” are not crossed and the “I’s” are not dotted, then our patients may note get reimbursed they need. But our notes are fairly quick to put out. The key phrase I ask new patients to ask their insurance is: “What is the usual and customary reimbursement for an out of network provider?” Then the patients can plan accordingly.

  9. Michael on Feb. 2, 2013, 7:03 a.m.

    I am currently an employed physician, but I am contemplating opening a solo acupuncture and cranial osteopathy practice. In most states, there is limited or no insurance reimbursement for these services, and I do not plan to have an office staff other than my wife as a receptionist. Also, I suffer from a lack of business acumen, as well as a lack of interest in battling insurance companies.
    So this practice will be cash only.

  10. Hal Pineless, DO on Feb. 2, 2013, 9:52 p.m.

    As a DO specialist, I would be interested in knowing if any specialists are not taking insurance. I’ve read similar articles about physicians not accepting insurances, cash only, concierge, etc. All these stories are about primary care physicians or OMT practitioners. What about the specialist?

  11. karla on Feb. 3, 2013, 10:11 a.m.

    I practice OB/GYN and under insured models we are demanded to see more people daily to meet production, I do OMT but never get paid for it, the automatic kick back of the modifier 25 takes too much time to fight. It doesn’t stop me from doing the OMT but it would be nice to get paid. Also with Global pays on deliveries and the high volume of Medicaid I am afraid with Obamacare we will get pennies for a delivery with still the highest liability. Patients will pay cash for a hair cut or manipulation but still will not pay for preforming a pap smear or GYN exam . Maybe when the access crisis hits people will pay cash to see a specialist but due to liability we can’t even fathom going to cash.

  12. James Taylor DO on Feb. 3, 2013, 2:41 p.m.

    Thank goodness people are talking about cash practices. The average individual has no idea how devastating and expensive Obamacare will be for them and their families. I think if primary care docs charged a yearly fee and an office visit fee equal to the local walk in or ER copay that patients would flock in. The local hospital is an 800 gorilla smothering the insured patients in the area and funneling patients into their owned clinics to the detriment of the “independent ” docs. Can we all agree that the AOA should help us set up our cash practices instead of wasting time on the idiots (including the biggest idiot) in D. C.? By the way, are the organizations that help set up the cash practices just a scam or a great idea. I think I am about a year away from bailing on the insurance system and want to get started on the process…

  13. Conrad Maulfair on Feb. 4, 2013, 9:58 a.m.

    I have a cash practice and love it. It is simple and there are people to advise you that do not charge consulting fees. Contact and read the past articles. is an organization of docs many have cash practices and utilize complementary alternative medical modalities. We are in Pennsylvania and you are welcome to come visit. Patients are more motivated in a cash practice in our experience. I appreciate all the comments made on this subject and wish our leadership was more interested in these solutions to problems plaguing medicine.

  14. Sarah on Feb. 16, 2013, 7:27 a.m.

    What are the possibilities & obstacles of creating our own DO HMO?

  15. Kylene on Nov. 23, 2014, 2:05 p.m.

    What type of malpractice insurance is needed for an OMT based practice? Does this insurance still allow for writing prescriptions when necessary?

  16. Rose Raymond on Nov. 24, 2014, 1:20 p.m.

    Hi Kylene,

    What state are you in? I consulted with a few experts at the AOA, who say the malpractice insurance requirements are different for every state. They suggest contacting your state osteopathic medical association for more guidance.

    Many thanks!

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