Cash Private Practice Billing Options

[Merovinge]

I am interested in eventually opening a PP that is cashed based and have a few questions regarding billing this. I would like to charge by the hour and see myself doing a combination of medications and psychotherapy rather than per session, this seems to be standard for many professionals with the exception of doctors due to how insurance pays per session. Are there any laws that would complicate this? Much of what I look up for medical billing pertains to insurance with little I could find on cash pay.

I am also interested in being able to offer more "on demand" support, something I know will require boundaries and likely some iterations to perfect, likely via a televisit. Any issues with charging for this on an hourly basis? My inspiration for these questions is the experience working with a lawyer who charges in this manner, where the incentive aligns for them to be responsive to you without being grumpy (being paid high hourly rate) and client experience is good (easy access to lawyer). I know other models exist (i.e. concierge), but I find something appealing about someone paying for exactly what they get from me.

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[Sushirolls]

Some states prohibit advanced payment, or having money on retainer. They view this as being 'an insurance company' that then gets regulated by the state insurance commission and really boils down to just don't do advanced payments. This is the only big regulatory hurdle I could think of?

Otherwise, set you policies and treatment contraction with a well spelled out payment policy the patients need to sign, and stick to it.

Good luck

 

[Ironspy]

I have a cash micro practice. I charge based on time for meds and/or therapy in person and tele. I give them an invoice and most of them get some reimbursement for out of network benefits but I am not involved in that other than providing the itemized bill. I charge a flat fee for forms, prior auths etc. I don’t do long term disability evals. I answer simple requests (<3 min) for free electronically but everything else is discussed in session. I do a 10 min free initial phone consultation and do not see patients who I worry won’t be able to handle these boundaries. Patients pay at time of service and I charge full fee for cancellations (<72h)

 

[splik]

For the most part you can set your fees however you like, but you have to realize many patients will try to use their out of network benefits to recoup the costs of the visits. Thus it is much easier to conform to insurance requirements and charge per session. E.g. 25 minute visit focused on meds equivalent to a 99214+90833 and a 50 minute session for meds and therapy being 99214+90836, and a 60 minute visit for meds and therapy being 99214+90838, and a new patient consult 60 minutes 99205 or 90 minutes 99205+99354.

For people who have a traditional dynamically oriented practice it is common to charge for your time (e.g. patients paying for the same hourly slot each week or multiple times per week regardless of whether they are on vacation, sick, unable to attend for any other reason no matter how much advance notice they give etc). But it doesn't sound like that is what you are proposing.

However for things not typically reimbursed by insurance companies (e.g. phone calls) I would definitely be charging for additional time for excessive calls. I wouldn't look to law for comparison as everyone hates lawyers for nickel and diming. Lawyers might charge for a 3 minute call or to look at an email. That is distasteful. However 10 minute call or patients repeatedly contacting out of session should absolutely be charged for your time.

 

[Merovinge]

Absolutely agree that for small/quick things, there would be no charge, but I cannot tell you how many phone calls get in the 10-15 minute range for CAP in between sessions at my present employer. I'm not RVU based so this is somewhat less of a concern, however my countertransference to these calls is a big concern for me over the decades I hope to practice. I know if I was paid at a what I plan to set my hourly rate to, I would not have this same concern. It would also let families that are interested in me coming to IEP meetings or crafting more documents for school a chance to do so with everything being the same rate.

Ironspy, your practice sounds almost identical to what I'm hoping to do. Glad to know its working for folks out there.

 

[Ironspy]

Absolutely agree that for small/quick things, there would be no charge, but I cannot tell you how many phone calls get in the 10-15 minute range for CAP in between sessions at my present employer. I'm not RVU based so this is somewhat less of a concern, however my countertransference to these calls is a big concern for me over the decades I hope to practice. I know if I was paid at a what I plan to set my hourly rate to, I would not have this same concern. It would also let families that are interested in me coming to IEP meetings or crafting more documents for school a chance to do so with everything being the same rate.

Ironspy, your practice sounds almost identical to what I'm hoping to do. Glad to know its working for folks out there.

I emphasize that I want to do due diligence to provide excellent care and be comprehensive and that takes time and don’t they want excellent care? Pre screening also works. I redirect (turn down) 30- 50% of referrals bc they seem like a poor fit based on my free phone consultation. I don’t do the whole first meeting =consultation bc I don’t want to be stuck helping refer an unstable patient which I feel is the right thing to do even if it’s not legally a doc-patient relationship. I also don’t want them pissed bc I charged them a bunch on money for a “consultation” and now won’t accept them as a patient.

It’s amazing how much better I feel about writing letters when I am being paid $50-100

 

[Basis]

I definitely agree with what others have said in this thread, in that you do not want to take the lawyer approach and nickel and dime patients. But, you definitely need to get paid for your time and not let them exploit free phone calls. Patients love to play all sorts of games.

I generally tell patients, when I am going over clinic policies at their first appointment, that I basically don't charge for phone calls that are shorter than a few minutes in length. If they need to cancel, reschedule, need a refill, are having a side effect, whatever, feel free to call. But, if it's more than a couple of minutes, and we're talking about 'clinical' stuff that is really more suited for an appointment, I will charge a pro-rated per-minute fee in line with how much a follow-up costs. ($160 for 20 minutes. So if I'm on the phone with the guy for 4 minutes that's $8*4 -> 32 bucks). I've only done this a handful of times, for like maybe 4 patients.

In contrast to residency, most of my patients NEVER call between appointments. At first it's concerning because residency kind of trains you to think that means something is wrong when all of your Cluster C patients are not calling.

Also, think how much of your time will be wasted going into your billing system, finding the patient, calculating the fee, etc. I don't want to waste 5 minutes on all that just because I'm on the phone for 45 seconds.

Since you're CAP, I would definitely just straight up charge a per-minute fee for these 10 and 15 minute phone calls. I know what those are like from residency.

EDIT - Also the language about this sort of thing (billing for phone calls) is written in the forms they are signing. I haven't had anyone balk at the idea but better safe than sorry. Best to have them sign something saying that.

 

[liquidshadow22]

Anyone comment on how possible it wouldbe to offer ancillary services such as ketamine or tms in a cash OON provider model? I assume it will not work but was wondering if anyone has experience trying that

 

[Sushirolls]

Ketamine IV is already cash.
Ketamine Nasal is now insurance.
TMS cash, I suspect would be difficult (disclaimer, I don't have a TMS machine).

When I did ECT I only had maybe 5% of patients who were vocal that price wasn't a concern and would pay for the treatments even if insurance didn't authorize. I also didn't ask patients such questions either. But this is a frame of reference to gauge a possible TMS cash market.

 

[liquidshadow22]

Ketamine IV is already cash.
Ketamine Nasal is now insurance.
TMS cash, I suspect would be difficult (disclaimer, I don't have a TMS machine).

When I did ECT I only had maybe 5% of patients who were vocal that price wasn't a concern and would pay for the treatments even if insurance didn't authorize. I also didn't ask patients such questions either. But this is a frame of reference to gauge a possible TMS cash market.

Thank you. With esketamine, I assume insurance companies will not provide much out of network coverage for nonpartipating providers?

A private practice needs to make a decision about whether to participate or not. If it decides not to participate, you largely lose out on the possibility of offering these ancillary services. In the end, in your opinion, do you likely do better by participating and building a large practice that can offer these services more readily?

 

[dl2dp2]

Anyone comment on how possible it wouldbe to offer ancillary services such as ketamine or tms in a cash OON provider model? I assume it will not work but was wondering if anyone has experience trying that

Thank you. With esketamine, I assume insurance companies will not provide much out of network coverage for nonpartipating providers?

A private practice needs to make a decision about whether to participate or not. If it decides not to participate, you largely lose out on the possibility of offering these ancillary services. In the end, in your opinion, do you likely do better by participating and building a large practice that can offer these services more readily?

Your assumptions are not correct. There are generally SOME out of network coverage if you have a PPO plan, with higher deductibles, etc. It's also incorrect that you can't be an OON and offer services, as long as the billing/reimbursements are not related to your practice. E.g. you can rent the equipment from someone else on a per session basis, and get the patient to pay you directly on a per session basis. The billing codes are one and the same, and the patient would go back and seek reimbursement from their insurance.

There are ongoing debates on this forum as to whether TMS, etc. are worth it financially. The answer to this question probably depends on the location and the model and therefore no universal answer can be given. In a large practice, you can probably make it worth your while. In a small practice, possibly, but you have to do it the right way.

 

[dl2dp2]

I am interested in eventually opening a PP that is cashed based and have a few questions regarding billing this. I would like to charge by the hour and see myself doing a combination of medications and psychotherapy rather than per session, this seems to be standard for many professionals with the exception of doctors due to how insurance pays per session. Are there any laws that would complicate this? Much of what I look up for medical billing pertains to insurance with little I could find on cash pay.

I am also interested in being able to offer more "on demand" support, something I know will require boundaries and likely some iterations to perfect, likely via a televisit. Any issues with charging for this on an hourly basis? My inspiration for these questions is the experience working with a lawyer who charges in this manner, where the incentive aligns for them to be responsive to you without being grumpy (being paid high hourly rate) and client experience is good (easy access to lawyer). I know other models exist (i.e. concierge), but I find something appealing about someone paying for exactly what they get from me.

I think it's difficult to bill by the hour mostly as someone above said you need to structure things into clear CPT billing codes. OON reimbursement actually constitutes a fairly large block of revenue in cash PP, especially for therapy heavy people, who typically rely on out of pocket max to be able to stay in therapy for years and years, and this will be relevant for CAP as well as children are usually under parents [good] plans.

On-demand support is typically not charged. However, if you insist someone to see you on tele, you can bill for the visit via the usual 99213. Once you set up a practice you'll see that it's actually fairly unusual for people to call you and talk for more than a few min at a time. You should just absorb the time into your usual fee to avoid complications of billing by the minute. I try to charge for calling in prior auth/writing letters, which I think 50% of MDs do, and sometimes I forget re: prior auth.

DBT therapists very often charge by bloc (i.e. $X for 6 months of on-demand coaching). That I think would be very reasonable for certain kinds of patients/family (i.e. chronically suicidal/cutting, etc) and you could consider this. For CAP, I've also heard of something like a 360 eval for $X where the MD would take a long time (3+ hours with everyone in the household), essentially billing by the hour. Typical intake billing codes are used for reimbursement, but parents are informed as to why this service costs much more than a usual eval. This is also not uncommon for forensic (esp. civil) evals.

 

[liquidshadow22]

It's also incorrect that you can't be an OON and offer services, as long as the billing/reimbursements are not related to your practice. E.g. you can rent the equipment from someone else on a per session basis, and get the patient to pay you directly on a per session basis. The billing codes are one and the same, and the patient would go back and seek reimbursement from their insurance.

Sorry I did not fully understand. Are you saying that the practice must NOT own the TMS machine in order to bill out of network? If the practice owns the TMS machine why can't they bill out of network?

 

[dl2dp2]

Sorry I did not fully understand. Are you saying that the practice must NOT own the TMS machine in order to bill out of network? If the practice owns the TMS machine why can't they bill out of network?

Owning the machine is unrelated to billing OON in general. There are issues in billing in-network w.r.t. billing professional vs. facility fees, as well as issues involving self-referrals, especially for Medicare/Medicaid. I personally have not dealt with this issue but it's something that requires some homework.

 

[TexasPhysician]

TMS machines are expensive and require continued costs to upkeep them. Add in your time, a dedicated staff’s time, and you need to keep the machine running 8 hours/day 5-6 days per week to make it financially lucrative. Otherwise, your time is better elsewhere.

There is no money in esketamine. It’s insanely expensive without insurance and insurances are reimbursing pennies for the monitoring. It’s complicated to get it approved so you need staff for that. The bigger clinics doing esketamine are subsidized at academic centers. It’s a money loser.

 

[clozareal]

Anyone comment on how possible it wouldbe to offer ancillary services such as ketamine or tms in a cash OON provider model? I assume it will not work but was wondering if anyone has experience trying that

Ian Cook, MD at LA TMS does full cash practice for TMS. Patient's pay the clinic directly and they provide a superbill to the patient so they can file a claim with their insurance.
• www. L A T M S .com • About •

The advantage of this is not having to go through prior authorization for conditions that aren't FDA approved for TMS (e.g., bipolar depression)

Just thinking through a quick business analysis for a cash only TMS private practice:

If it's $10,000 per course of TMS for 30 sessions over 4-6 weeks (including initial evaluation, MT determination, etc.), that would mean that for one month operating at a conservative four patients a day assuming that each treatment course is about 1 month, the gross income would be $40,000. Multiply that by 12 months and you get $480k yearly cash flow.

The consumable costs would be $3.91/session for the coil x30 sessions $117.30/course + $14 treatment cap = $131.3 per patient per course cost (this is taken from one of the TMS device manufacturer's website). No need to include having someone help with prior auth, reimbursement and billing,

Cash flow = $480,000
Expenses = $100,000 for TMS machine/chair (a device without cost per session) + 4 patients/mo * 12 months * 131.3 per patient per course cost = $106,302.40 + [office lease of $2000/mo in a big city (to have enough patients) * 12 months] + [TMS tech/admin hourly salary of $20/hr * 40 hrs/week * 52 weeks/year + ~$10,000/year cost of providing health insurance]*2 employees + $5000 furniture + $1000 EMR start-up cost + $350/mo EMR cost * 12 mo + $2000 computer + $160/yr business license + $100/mo office supplies + = $247,062.40 in costs (a bit of an underestimation due to electricity and miscellaneous costs)

Your profit in the first year would be $480,000 (cash flow) - $247,062.40 (expenses) = $232,937.60 and after the first year would be ~$333k.

Cash-on-cash return = cash flow / expenses = $480,000 / $247,062.40 = 194% return in the first year.

If you do 8 patients a day (which would come out to about 4 hours day of 30 minute session treatments + 1 hour of new evaluation per day to get a steady steam of about 8 courses per month), then the cash flow would be would be $960k per year minus those operating costs.

Is there anything missing in the analysis above? The most difficult thing would be finding 4 cash-paying patients a month. However, this is one hour of an initial evaluation plus the motor threshold determination time (usually 30 minutes) by the psychiatrist, the rest is done by the tech, while the rest of the time can be spent seeing patients for medication management or therapy in the cash practice.

 

[Sushirolls]

Office lease in a big city will be more than $2000/mo.

4 cash paying patients, x12 months, is 48 patients. 48 unique patients who want to spend $10k cash, instead of going to the doc around the corner who will get the prior auth for the insurance they already have. Great analysis on paper, just not optimistic of that many people willing to do it.

 

[TexasPhysician]

Ian Cook, MD at LA TMS does full cash practice for TMS. Patient's pay the clinic directly and they provide a superbill to the patient so they can file a claim with their insurance.
• www. L A T M S .com • About •

The advantage of this is not having to go through prior authorization for conditions that aren't FDA approved for TMS (e.g., bipolar depression)

Just thinking through a quick business analysis for a cash only TMS private practice:

If it's $10,000 per course of TMS for 30 sessions over 4-6 weeks (including initial evaluation, MT determination, etc.), that would mean that for one month operating at a conservative four patients a day assuming that each treatment course is about 1 month, the gross income would be $40,000. Multiply that by 12 months and you get $480k yearly cash flow.

The consumable costs would be $3.91/session for the coil x30 sessions $117.30/course + $14 treatment cap = $131.3 per patient per course cost (this is taken from one of the TMS device manufacturer's website). No need to include having someone help with prior auth, reimbursement and billing,

Cash flow = $480,000
Expenses = $100,000 for TMS machine/chair (a device without cost per session) + 4 patients/mo * 12 months * 131.3 per patient per course cost = $106,302.40 + [office lease of $2000/mo in a big city (to have enough patients) * 12 months] + [TMS tech/admin hourly salary of $20/hr * 40 hrs/week * 52 weeks/year + ~$10,000/year cost of providing health insurance]*2 employees + $5000 furniture + $1000 EMR start-up cost + $350/mo EMR cost * 12 mo + $2000 computer + $160/yr business license + $100/mo office supplies + = $247,062.40 in costs (a bit of an underestimation due to electricity and miscellaneous costs)

Your profit in the first year would be $480,000 (cash flow) - $247,062.40 (expenses) = $232,937.60 and after the first year would be ~$333k.

Cash-on-cash return = cash flow / expenses = $480,000 / $247,062.40 = 194% return in the first year.

If you do 8 patients a day (which would come out to about 4 hours day of 30 minute session treatments + 1 hour of new evaluation per day to get a steady steam of about 8 courses per month), then the cash flow would be would be $960k per year minus those operating costs.

Is there anything missing in the analysis above? The most difficult thing would be finding 4 cash-paying patients a month. However, this is one hour of an initial evaluation plus the motor threshold determination time (usually 30 minutes) by the psychiatrist, the rest is done by the tech, while the rest of the time can be spent seeing patients for medication management or therapy in the cash practice.

Where are you easily finding patients willing to spend $10k on a treatment course of TMS when most insurances now cover it?

 

[calvnandhobbs68]

TMS machines are expensive and require continued costs to upkeep them. Add in your time, a dedicated staff’s time, and you need to keep the machine running 8 hours/day 5-6 days per week to make it financially lucrative. Otherwise, your time is better elsewhere.

There is no money in esketamine. It’s insanely expensive without insurance and insurances are reimbursing pennies for the monitoring. It’s complicated to get it approved so you need staff for that. The bigger clinics doing esketamine are subsidized at academic centers. It’s a money loser.

Yeah since you have to dispense Spravato at the clinic as part of an "approved site", they basically bundle the cost of the drug (which makes up the majority of the reimbursement) and the monitoring into these G2082 and G2083 codes. The only way to make this financially viable I think would to have "Spravato mornings" where you just line up like 20 patients and administer it to everyone in the morning, have them all sit in a waiting room for "monitoring" for 2 hours and then have regular clinic in the afternoon. I mean it's not dissimilar to what ophtho does with cataract patients or derm does with excisions if you think about it.

 

[TexasPhysician]

Yeah since you have to dispense Spravato at the clinic as part of an "approved site", they basically bundle the cost of the drug (which makes up the majority of the reimbursement) and the monitoring into these G2082 and G2083 codes. The only way to make this financially viable I think would to have "Spravato mornings" where you just line up like 20 patients and administer it to everyone in the morning, have them all sit in a waiting room for "monitoring" for 2 hours and then have regular clinic in the afternoon. I mean it's not dissimilar to what ophtho does with cataract patients or derm does with excisions if you think about it.

That wouldn’t cover the costs of a psychiatrist, and I think it would violate REMS protocol. You’d need a psychiatrist doing regular clinic simultaneously. It would cover 1-2 MA’s to monitor, but patients need to be in an office and spaced apart. It’s a logistical nightmare. It takes too much space and staff. I’d consider it a loss as you are absorbing space that could be used for more lucrative things.

 

[Shufflin]

Anyone comment on how possible it wouldbe to offer ancillary services such as ketamine or tms in a cash OON provider model? I assume it will not work but was wondering if anyone has experience trying that

I have experience with IV ketamine. It's not simple, rather, it's potentially dangerous and you need all the proactive and protective measures in place before you even begin to go down that path along with training on how to treat complications of anesthesia. Crash cart, trained staff, monitoring equipment, protocols. Then, there's the business hurdle, namely, jumping in front of the next guy down the street. Ketamine clinics are popping up everywhere. How many dollars you throw at marketing will be, often, the main driver for business. Your rate will be highly region-dependent. There's downward pressure on prices. It's a whole different beast.