Switching to a Cash Practice

Article excerpt

I have been in solo psychiatric private practice for 33 years and continue to truly enjoy my work. But the stress level was building because of reimbursement realities and administrative hassles, so in the fall of 2005, after a lot of thought, I opted out of all health plan and insurance provider agreements.

I now ask my patients, including those on Medicare, to pay at the time of service in my office. My administrative assistant then promptly sends insurance forms to the patient's health plan(s) so that enrollees are directly reimbursed.

Making the decision to change to a cash practice was not easy. I was afraid about losing access to patients and disrupting the care of my established patients, since most parties rely on employer-based or government health care coverage. Nonetheless, in 2005, the future looked grim for my private medical practice, given the mounting administrative costs of chasing insurance payments coupled with diminishing payments for psychiatric services.

A little more than a year later, the good news is that the switch to a cash medical practice has worked. I now have no accounts receivable for patient care rendered. And patients have been surprisingly receptive to a cash medical practice model as well. They tell me that they are now actually getting better customer service and prompt payments from their insurance companies. As before, patients get timely administrative and clinical support from my office to provide insurance company documentation and challenge benefits denials.

Some patients, armed with their health insurance contracts, enlist support from their employer's human resources department to clarify and receive their contracted mental health coverage.

Patients also like the privacy and confidentiality safeguards of a cash practice because I don't share details of their psychiatric care sessions with their insurers. I consult patients before disclosing any information about their care to any outside party, and the patient or the patient's legal representative and I discuss the details of any proposed information disclosures in advance of release. By moving the insurer out of the consulting room, I am now accountable to my patients, rather than to the insurer, and am an effective advocate in helping my patients obtain payments for their covered psychiatric services.

Reimbursement Realities

One of the main reasons behind my decision to switch to a cash-only practice was the continuing decline in reimbursement for my professional services. Mental health coverage has lost ground relative to coverage for medical-surgical care over the past decade. Health care premium costs to employers (which are passed on to patients) have increased an average of 10% a year for the past decade, while mental health benefits have slipped from 7.5% of annual health care spending in 1975 to less than 3% in 2004, according to the Hay Group and the American Psychiatric Association.

How have the cuts been implemented? The instruments of cutting mental health payments in Minnesota, for example, for both private insurance enrollees and Medicaid patients, are behavioral health "carve-outs," which are mental health services that are administered and funded separately from general health care services. Such carve-outs separate budgets and payments for mental health from general medical services, and restrict and manage mental health provider networks to cut costs.

Behavioral carve-outs have also severed intraprofessional communications and care continuity among a patient's health care professionals, and between hospital and outpatient mental health clinicians. In addition to disrupting care continuity, behavioral carve-outs and their parent insurance company organizations define the reimbursable scope of practice for psychiatrists, psychologists, social workers, alcohol/drug counselors, and mental health nurses by judging "medical necessity" for mental health services. …