Starting My Private Practice &... Insurance

Should I take Insurance? Can't I just bill for myself?

When can I expect to start being paid? Why don't these numbers match?

Can I write off copays? What if people don't pay?

Insurance

Over the years, plenty of fantastic and talented providers have stepped out in the bright light of day, inhaled deeply – and then taken the plunge!

Private Practice; How glamorous. How free. How fulfilling! That’s not sarcasm, either. Private practice can be one of the best career moves for many, many practitioners and the worst for others. Only you can decide. But the devil, as they say, is in the details that no one actually talks about much. Sometimes it ain’t pretty.

These are super important questions to ask and there are countless articles to answer them all, but I want to review what catches so many providers off guard – the stuff they don’t teach in school. Frankly, the most skilled and practiced providers on the planet may never have had to deal with some of this before. So, as you begin to write up your business plan and establish your financial intents, don’t forget to consider a few important (and rarely mentioned) details.

Private Insurance

If you decide to accept insurance, first of all, good for you! A lot of people cannot afford care without their insurance and you are doing them a great service! As for yourself... sort of. When considering insurance, there are a few caveats that you want to keep in mind.

Submitted vs Paid

Say you do an intake appointment for which your contract says you will be paid $100. Your biller, however, just submitted $200. That’ number is seductive, but don’t get ahead of yourself here! What your biller doing here is billing for the maximum allowable, not the payable amount (ie, your contracted rate). You may be submitted for $200, but your check will arrive for $100, as stated in your contract….

Well. Maybe…

Copays and Deductibles

Another caveat – if a patient has a $40 copay (more or less standard), you may only get a check for $60 and you’re out that final $40 until the patient hands over their credit card. And if a patient has a deductible, then you may not be paid at all until your patient pays the entire $100 owed for services. It gets worse. Check your contract – you probably are not allowed to write off copays and deductibles. You have to collect them. Besides, your budget probably cannot afford not to. And writing them off would cost thousands upon thousands in lost wages over time.

Moreover, you are not really doing a patient any favors, because they are contractually obligated to pay those fees, too. Say a patient has a pretty standard $40 copay, that’s alright, not bad. But if you see them 3 times without collecting and they suddenly owed $120, that may be burdensome to them. At best they will work out a payment plan and lay off the visits to you (for better or worse). Worst case scenario is they will feel guilty or overwhelmed and stopped seeking care entirely. Yikes.

So hire someone to help if collecting payments is uncomfortable. Verify benefits ahead of appointments – of your biller does not provide these services, then hire an admin person who will.

Verifications

Verifications are not that bad. Tedious at best, I suppose, but insurance companies are making it harder and harder to talk to a trained representative directly, so you are more likely to get faxes of EOBs (Explanation of Benefits). Learn to read them! Advise your patients ahead of their first appointments – but be a little but noncommittal. I say that because insurance companies can be somewhat unpredictable. Shocking, I know.

So, if Andy Dwyer hands you his insurance card, put it on file with his Drivers License and his Payment Card. Next, run his benefits and read them carefully. You will come up with something roughly like this:

Verified active as of 3/23/2023 (the date you ran the verification)

$40 COPAY

$5000 DEDUCTIBLE, $1250 MET

$12000 MAX OUT OF POCKET, $1250 MET

Send this to the patient. Do not elaborate. If they look at this and then ask what they are going to owe, be honest – in this case, “you will owe the deductible”. If you know your contracted rate, give them a range. So if your contracted rate is $100 for an intake, tell them they will owe $75 - $125. Give the patient something solid to work with while also giving yourself a buffer. (When coinsurance and percentages start to get involved, you will be so glad you didn’t commit.)

“

Hi Andy, Billing has verified your benefits. Your insurance company has advised of the following:

Verified active as of 3/23/2023 (the date you ran the verification)

$40 COPAY

$5000 DEDUCTIBLE, $1250 MET

$12000 MAX OUT OF POCKET, $1250 MET

Thank you and I look forward to seeing you on Tuesday

”

How Often Do Patients Skip Out?

Honestly, we have a collections agency on hand, but we very rarely call them. Why? Because we at Rose’s Admin do a couple of things to help curb the need:

1) First and foremost, and I cannot emphasize this enough: NO SURPRISES. Verify benefits ahead of the very first appointment and advise patients of what they are looking at. Be detailed, take your time with them, make sure they understand. Our biggest concern is always deductibles because it means payments can be larger and because a lot of people do not really understand what a deductible is. Just make sure patients know generally what is coming. In the state of Colorado, we must keep our fees posted in a readily accessible area, like a website, so patients can predict. If you are not in a location where this is required, do it anyway. Be vigilant about communicating this BEFORE you see a patient. Make arrangements as needed BEFORE you see a patient. Verify and advise. Rinse and repeat.

2) Policies and Procedures all state that a credit card, HSA or other payment method must be kept on file and up to date. Fees are due at time of service. You can charge the morning of, when they walk in the door, or in the evenings, but if you know what that fee is going to be (private pay/copay), then you need to be running these every, single day.

3) Weekly Aging Reports. We run outstanding balances weekly and we get them paid off weekly. Our goal is always to end the week with a $0 balance. If a patient has a balance, we call them. Then once their balance hits about $50 we will not let them schedule further until it is paid. I reiterate: You and the Patient are contractually obligated to pay these fees and the bigger the bills, the more everyone hurts. You are not doing favors by letting things add up.

4) Consider a collections agency. And pick one who will not go after a patient’s credit, people who cannot pay already have enough to deal with. But let someone else take the burden at that point. If you are doing everything above, you may never even have to use it! NOTE: Never threaten a patient with collections when you are trying to collect, this can backfire legally and ethically, and check with your collections rep if you are unsure of any language in your policies/procedures which discusses this option. Like HIPAA, the financial world has a ton of privacy and protection rules that you need to be aware of.

Are their exceptions to these rules? Of course. But exceptions means: Rare

It’s Going to Take How Long?!

Medicaid and Medicare can vary and are their own ball game, so check with your local or state biller for better advise. In the State of Colorado, Medicaid submits one week and pays the next, provided everything goes smoothly. Not bad.

Private Insurance, however, is different. From the day you submit that claim, you need to plan on 30 – 90 days for payout, and longer if there are issues. This means when you open your doors and you start booking up, be ready to wait. If you are in private practice and didn’t take out a loan, you may want to consider a part time job to keep the bills paid while you build up your practice and wait for the income to start flowing.

Onward!

Take heart, insurance can be a ton of work, but insurance can also allow you to build you practice faster by opening the door to a flow of patients seeking care. Take your time when considering which insurances you want to credential with, get a good credentials specialist to navigate the process for you, and do your best to learn all the ins and outs for yourself. Remember that even if you are not the one on the ground running the billing show, you are the big boss now. Adelante!