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Split cash and insurance private practice

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futuredo32

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I knew of a private practice psychiatrist who had a well established private practice. He decided to keep his patients he was seeing via insurance and continue accepting their insurance for payment BUT for any new patients he would only take cash. This is in Michigan, not sure if that matters, does anyone know the logistics and legalities of this? Thanks.
 

Bartelby

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I am not 100% positive, but I think if you join an insurance panel you have to accept that insurance if the patient has it. You might be able to turn new insurance patients away altogether, but I believe it would be a violation of the contract to to take new patients with that insurance and ask them to pay cash.

If the new patients have an insurance policy that you don't take, then of course you can charge cash.
 
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deleted480308

Can your license apply differently with two different entities?

I.e. I take bcbs at the hospital but in my private practice I’m cash only?
 

TexasPhysician

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I knew of a private practice psychiatrist who had a well established private practice. He decided to keep his patients he was seeing via insurance and continue accepting their insurance for payment BUT for any new patients he would only take cash. This is in Michigan, not sure if that matters, does anyone know the logistics and legalities of this? Thanks.

Your insurance contract will not allow this. You would likely be sued for breach of contract. Theoretically you could rent the suite next door as well. The new suite is a separate location. Insurance contracts are location specific. The new location could be cash only and the old one could refuse all new patients. This is a waste of rent money though.
 
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SixStringPsych

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Is there no way then to convert from an insurance based practice to a cash only practice? Other than literally telling your current patients that they have to pay cash now?
 
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futuredo32

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Your insurance contract will not allow this. You would likely be sued for breach of contract. Theoretically you could rent the suite next door as well. The new suite is a separate location. Insurance contracts are location specific. The new location could be cash only and the old one could refuse all new patients. This is a waste of rent money though.
I had an attending that did it. He was legit one office. I don't know how he did it. He's been around for eons. He knows the ins and outs. We didn't part on good terms to say the least so I cant ask him how to do it or how he does it.
 

futuredo32

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PS Its not for me. My shrink/analyst is planning to do cash only but said if he can figure out a way to see me through my Blue Cross he will. :) And I know of a lot of psychiatrists who stopped taking insurance and went cash only. Insurance based compensation for therapy is crazy low.
 

TexasPhysician

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I had an attending that did it. He was legit one office. I don't know how he did it. He's been around for eons. He knows the ins and outs. We didn't part on good terms to say the least so I cant ask him how to do it or how he does it.

Selecting which BCBS patients you bill insurance and which require cash within the same office sounds more shady than knowing the ins and outs.
 
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TexasPhysician

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Is there no way then to convert from an insurance based practice to a cash only practice? Other than literally telling your current patients that they have to pay cash now?

Like? You could cancel 1 insurance contract at a time if you want to do so gradually.

I’d recommend just starting the practice as cash only.
 
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deleted480308

Is there no way then to convert from an insurance based practice to a cash only practice? Other than literally telling your current patients that they have to pay cash now?
You do have to tell them eventually;)
 
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futuredo32

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My shrink works in a big clinic and they are dumping a lot of insurances (not mine I pay big and they reimburse better than most) and they have a sign at the front desk stating the date they will no longer be accepting each insurance.
 

futuredo32

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Selecting which BCBS patients you bill insurance and which require cash within the same office sounds more shady than knowing the ins and outs.
I meant he wouldn't do anything unethical. He knows the laws, used to bill for himself, etc. He is a jackelope but ethical and a great psychiatrist. I dunno how he did it or does it but he wouldn't do anything shady or illegal.
 

splik

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I meant he wouldn't do anything unethical. He knows the laws, used to bill for himself, etc. He is a jackelope but ethical and a great psychiatrist. I dunno how he did it or does it but he wouldn't do anything shady or illegal.
well going by what you are saying he is. if you accept insurance for one patient you cannot charge patients with the same insurance cash. which is what you are suggesting his doing. that is a breach of contract with the insurance company.
 

dl2dp2

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^^ this is correct.

The only way taking patients from the same insurance panel and charge them cash would work is the provider would work at two different facilities where one takes insurance and one does not. This is common and legal. And one might argue more than ethical, because if it's illegal even fewer people would work in public/non-profit psychiatry. Typical scenario is a hospital/ER attending who has a part time cash private practice. When you contract with an insurance company, you agree to accept rates for all their billing codes, not just the inpatient codes.

However, due to quirks of the US healthcare system, especially for large facilities, billing codes are often separately negotiated with individual insurance companies, except for Medicare. For example, 99213 charged by an internal medicine department may be differently reimbursed compared to one charged by a plastic surgery department, and there's absolutely no uniformity with more expensive codes (i.e. spine surgery done in two different departments or even two different hospitals under the same academic affiliation). This is not as applicable with psychiatry, as typically we don't get reimbursed much (differently to our sister departments), and very often academic/non-profit jobs are funded by public block grants, not pay per visit, or managed in an ACO (i.e. Kaiser, VA, etc). For solo practices, you typically have little leverage to negotiate with panels, but interestingly my colleague was able to get a 10% raise out of Insurance X because there are so few psychiatrists in the area who take insurance X, so this rule is not hard and fast. I tried to negotiate with insurance Y in order to opening a new clinic, but they weren't interested. I live in a saturated area, but if you are one of the few providers in a smaller homogenous area the game is very different. The local provider group is essentially an EAP (say of a manufacturing plant), in that case you might get more bang for your buck if you go directly to the payer (i.e. the executive of the plant). In that case negotiation might be easier even if you are a solo/small group, and you see a lot of the plant employees and can get them to help you complain. However, likely the provider would also be able to separately build a practice outside of this and take pure cash.

This is perhaps too much information, but I suspect this is not the case in OP's description. More likely what is described is someone who takes ONE specific insurance, and whenever a new patient shows up and has that insurance, he will turn that patient away. But his cash bottomline isn't hurt because he has enough of people from other insurances coming in. This is extremely common both for employed and solo psychiatrists and full disclosure I even do it myself (though I'm closing out participation in this insurance in a few months). The insurance is typically an EAP with a limited patient stream that pays somewhat better than the prevailing rates if you try to directly panel, but nowhere close to the cash rate. I have a feeling that insurance companies know that people who try to directly panel are low demand providers and therefore lowball.

I suspect that if the healthcare system goes single payer, cash pay doctors will convert to the current direct care model prevalent in primary care (i.e. insurance + membership fee) with little impact to the financial bottomline and likely an increase in demand, unless such a model is legislatively prohibited (a true price control). In which case you will see fairly severe shortages (especially of severe time consuming cases) where you cannot find a psychiatrist even if you have money.
 
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futuredo32

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Unless I was mistaken he said he kept his x number of patients who had whatever insurances he took and for new patients, it was cash only. I don't know, from what all of you have posted, my impression of what he had done is not legal and he is ethical and definitely wouldn't want to end up losing his license or going to jail. Thanks.
 
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