Managing risk: How to become an out-of-network physician

In clinical practice, physicians are well aware of risk management. But in many parts of the country, the majority of physicians have already lost the risk battle when it comes to the management of their business. As a result, they are now either employees or out of business altogether.

As a physician, I wasn't satisfied with either of these options. My solution: to become an out-of-network physician.

This was a five-year process--of dropping my worst payer, losing some angry patients, waiting for the schedule to fill back in, and repeating with the next-slowest, smallest or lowest-paying payer--and then doing it all again. But the goal was not necessarily a 100 percent self-pay practice. I continued to, and still do, file patients' insurance claims for them. They get reimbursed a portion from their health insurance. Without that reimbursement to the patient, I don't think I would have many patients.

Instead, what I don't have is risk or accounts receivable.

True, this process was easiest in the beginning. Once I began dropping bigger contracts, the remaining payers represented over 40 percent of my practice. If I had known how painful the last steps were going to be, I may never have embarked on the pursuit.

Upsetting and losing patients can be particularly difficult. As I dropped payers, I'd put a sign in the waiting room stating, "Our practice has ended its relationship with Xyz Insurance Company. Effective MM/DD/YY, you will be asked to pay in full on the date of service. Insurance forms will be processed with the insurance check sent to you."

Of course, there was grumbling. The staff and I had to field a lot of questions. But most patients complied.

There's a powerful change that takes place once patients get hit with delays, denials and payments well below expectation. They get angry. Those who can't afford to wait for their checks will leave. Their ire, however, won't be directed at you, but toward the insurance company. This works for me.

If your patients really like you, some eventually return once they get a new insurance policy. The schedule will fill back in. As part of the process, adjust your prices. Make sure the price you quote for a service is the cash price that you would expect someone to pay. You will save money. Pass the savings along.

But be firm about your financial policies with patients. Whether you accept insurance or not, the portion of accounts receivable due from patients should always be zero. You know what the copayment or coinsurance will be. Get it upfront, on the day of service. If there is unmet deductible, your staff should have already flagged the chart. When that patient is called to confirm the appointment, tell them about the deductible, and make sure they know to be prepared to pay the appropriate amount.

There is a very short learning curve. Once a patient gets asked to reschedule once, or hears about it happening to someone else, they will come prepared to pay, or they will move on.

For me, making these changes was a matter of survival. I wanted to continue to do my job without being "rescued" by a hospital. If you think dropping insurance is risky, think about the risk you assume by depending on third-party payers. No other professionals take that kind of risk. Doctors need to stop feeling obligated to float zero-interest loans to multi-billion dollar companies. We can no longer afford to diminish the value of our services by not taking the value of the work we do seriously ourselves.

Editor's note: Dr. Cassaro is medical director at Painless Living in Jeffersonville, Ind.