Starting a cash pay podiatry practice

[air bud]

That’s absurd. Deer drinking scotch?

Everyone knows that deer prefer bourbon.

No, pretty sure the prefer Dalmore.

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[ExperiencedDPM]

No, pretty sure the prefer Dalmore.

And I’m pretty sure the tea sippers aren’t going to “get” that reference. But don’t worry, I get it…..

 

[Creflo]

So I passed the first DME audit, then they sent another audit for the same patient next follow up DME visit. I was very new with DME and though I did a lot of homework and training to learn the required documentation, I didn't chart the required amount of exudate for the ulcer so they said I failed the second audit. I'm a stickler for charting so usually take photos of the pathology that I treat, and for this note I had a before and after photo of the ulcer. It was a deep heel ulcer in a patient with dementia, pvd, etc. who clearly needed the dressing supplies, and pretty much the same exact documentation for the same patient passed on the first audit. I even sent a copy of the ulcer photos but they were grainy black and white. I guess the audit success somewhat depends on which auditor you get. Anyway, I submitted a second review request with the medical director of the audit company along with two very clear 8x10 color photos of the ulcer showing the required exudate. At this time am waiting on them to get back to me for my "appeal." If you are thinking about getting into DME, they will come after you, and they don't play around.

I passed my first medicare targeted probe audit (with a focus on toenail and callus visits) with a zero percent error rate, so they will lay off me for a year on my at risk toenail/callus charts at least.

My office is basically hidden on the second floor of an office building, and since I depend on cash pay for a significant portion of my revenue (I take cash and original medicare only), I've always wondered how beneficial it would be to be located on a streetfront. So I made an offer on a building. It's on a well traveled street in a good location. The building is in rough shape, and it will cost a fair amount to renovate it. And it's bigger than I need, so my plan is to rent out part of it. The offer is contingent on my being able to get financing and a building inspection, so I'm not fully committed at this point.

 

[Creflo]

So I had the conference call with the doctor at the recovery audit contractor, and he said my note was very good but missed the specific language about exudate, so I did not pass the DME audit. The LCD for wound care says you can use photos, so since I have good photos showing the exudate I'll appeal. I have photographic indisputable evidence of the pathology treated and they are asking for the money back. They aren't auditing for dishonesty, they are auditing for money, it's a game. Fortunately I passed another DME audit, so I've passed 2 out of 3. If you think they only go after crooks, you are mistaken. They will come after hard working, honest, legitimate podiatrists who are providing a needed service to patients, with good documentation, even if they can find a single deficiency in the note to ding you on. Bottom line is that using exact LCD language in your note is probably more important than the medical necessity and appropriateness of treatment provided when it comes to recovery audit contractors. The auditors are not doctors, they just go by a checklist. If they ding you but your note is deemed by their medical director as overall very good and you provided a legitimate medical service, they won't relent. Doctors are low hanging fruit in today's healthcare system's financial woes.

I decided to not buy the building. I follow a financial guru named Dave Ramsey, and he says unequivocally in his book EntreLeadership that you should not go into debt in business. I know many will disagree, but I'm sticking to the plan and won't buy a building until I have the cash to pay for it. He makes a good point, if you make a big purchase mistake with cash, you can afford it. But if you make a big purchase mistake on credit, it can hurt you. I can always rent in the meantime.

 

[Feli]

...I did not pass the DME audit...
...They aren't auditing for dishonesty, they are auditing for money, it's a game. Fortunately I passed another DME audit, so I've passed 2 out of 3. If you think they only go after crooks, you are mistaken. They will come after hard working, honest, legitimate podiatrists who are providing a needed service to patients, with good documentation, even if they can find a single deficiency in the note to ding you on. ...

They go after plenty of crooks also.
Why do you think the MCR and MCA rules and regs on DME are what they are??
That billing fiesta was busted up by the coppers long before we graduated, man.

But yeah, MCR/MCA DME = headaches. It will waste your time and wastes time+money to get the DMEPOS anyways. Just send it out Rx to DME shops (some of them won't even do MCR anymore either), let ppl get DME from the hospital (ER, DOS, etc), amazon, etc... join the club on that sentiment

...also, realize Dave Ramsey is good about saving/frugality. He is far from a 'financial guru.' There are 1000 much better sources for wealth/investing/business.

 

[DYK343]

He is far from a 'financial guru.'

Either going to love him or hate him. He makes a lot of good points and you wont go net negative following what he says.

But taking some risks can pay off big. Personally if I owned a private practice I would be looking to own the building too. I hate the concept of paying rent. I would rather pay mortgage. Youre paying yourself when you pay on a mortgage (plus an interest fee.). Of course this is assuming youre staying in the area for 5-10 years which we never truthfully know. But I suppose thats part of the risk.

 

[Creflo]

So I get a call from an ED friend on Saturday. He texts me a photo of a toe with a needle embedded. I say I can meet the patient in the office in 3 hours. Patient has HMO, I say will be self pay, I'll take it out for $500. Patient says ok, shows up at my office with new shiny fracture boot with orthopedic clinic logo on front. I ask him why he is wearing a fracture boot, he goes no to tell how much he has been through to this point to try to get the needle out. First he went to urgent care, he was given Doxycycline. Then he went to a local orthopedic clinic, they "made" him buy the fracture boot. They want to take him to surgery center to remove the needle, are "waiting on referral." Then he goes to ED. At this point he says he is tired of going to all the doctors and just wants it out and is willing to pay. I figure I saved somebody around 10 grand by numbing his toe and removing the needle in my office, no referrals, no anesthesiologists, no scheduling delays, etc.

The DME auditor sends another audit, this one for an AFO. I've dispensed a total of one AFO through DME, ever. That's a 100% audit rate on AFO's.

 

[heybrother]

So I get a call from an ED friend on Saturday. He texts me a photo of a toe with a needle embedded. I say I can meet the patient in the office in 3 hours. Patient has HMO, I say will be self pay, I'll take it out for $500. Patient says ok, shows up at my office with new shiny fracture boot with orthopedic clinic logo on front. I ask him why he is wearing a fracture boot, he goes no to tell how much he has been through to this point to try to get the needle out. First he went to urgent care, he was given Doxycycline. Then he went to a local orthopedic clinic, they "made" him buy the fracture boot. They want to take him to surgery center to remove the needle, are "waiting on referral." Then he goes to ED. At this point he says he is tired of going to all the doctors and just wants it out and is willing to pay. I figure I saved somebody around 10 grand by numbing his toe and removing the needle in my office, no referrals, no anesthesiologists, no scheduling delays, etc.

The DME auditor sends another audit, this one for an AFO. I've dispensed a total of one AFO through DME, ever. That's a 100% audit rate on AFO's.

You have obviously rendered much more efficient care. The boot was unnecessary. While foreign bodies can at times be difficult to remove you've done good work getting it out without running up the bill in a surgery center. The ED is going to give that patient a bill for thousands of dollars.

So here's my weird final issue for you. EVERYONE got paid - except you. $500 is real money. We should question how much our services are worth, are we offering good value. How much should a family should have to pay for a small procedure performed in an office? I made a sheet of all the foreign body codes awhile back to help keep track of the descriptions of each code. I also included the Medicare fee schedule values from a few years ago. Obviously there's some flexibility based on which code was selected and the difficulty of the procedure. That said - my rough calculation is you charged this patient less than you would have been paid by BCBS PPO in my area. BCBS commercial plans are probably more fair/reasonable than a lot of other insurances. We win on some codes. We probably lose on others if there's a lot of follow-up. I probably wouldn't fret something like this if you were just knocking out $500 procedures all day in a low overhead. That said, cash pay patients are one of the few opportunities for a physician to actually ask a patient for what they believe the service is worth and I say all of this as a person who probably needs to increase their cash fee schedule again for certain codes. That said, I think there's room to increase your pricing by potentially 20-50%.

My suspicion is you somewhat have your own system of morals/honor concerning what is right / fair for how to treat patients. You probably aren't one of those people listing 20550 as $800 like I saw when a "amnio injection" company sent me someone's EOB. Your idea of fair is probably somewhat "sticky" to what Medicare charges. Here's my problem for you - 10-15 years ago Medicare paid $200ish for a 11750. Medicare paid like over $80 for every foot injection (its like $50 now). When you figure out the overhead and expenses of your practice - do you factor in getting audited for trying to write an AFO? Do you factor in your plural audits for wound care products? At some point what insurance and Medicare pay for our services have no reflection at all on the cost of doing business. Right now United is paying me sub-Medicare locked to like 2018. Nothing, nothing I do for their patients is worth anything and they deny things left and right. The other day they denied the betamethasone in an injection. Meanwhile they want 8% more for their insurance premiums. Equipment pricing is increasing. Staff pricing is increasing. The impression I'm under is you accept Medicare and everything else is cash pay. You are in an ideal system to ask for what you need and the world is only getting more expensive. I think your post is somewhat a commentary on the ridiculousness of the system, but if our prices stay stagnant the rest of the world will just keep increasing in cost around them.

 

[Utvolsdpm]

You have obviously rendered much more efficient care. The boot was unnecessary. While foreign bodies can at times be difficult to remove you've done good work getting it out without running up the bill in a surgery center. The ED is going to give that patient a bill for thousands of dollars.

So here's my weird final issue for you. EVERYONE got paid - except you. $500 is real money. We should question how much our services are worth, are we offering good value. How much should a family should have to pay for a small procedure performed in an office? I made a sheet of all the foreign body codes awhile back to help keep track of the descriptions of each code. I also included the Medicare fee schedule values from a few years ago. Obviously there's some flexibility based on which code was selected and the difficulty of the procedure. That said - my rough calculation is you charged this patient less than you would have been paid by BCBS PPO in my area. BCBS commercial plans are probably more fair/reasonable than a lot of other insurances. We win on some codes. We probably lose on others if there's a lot of follow-up. I probably wouldn't fret something like this if you were just knocking out $500 procedures all day in a low overhead. That said, cash pay patients are one of the few opportunities for a physician to actually ask a patient for what they believe the service is worth and I say all of this as a person who probably needs to increase their cash fee schedule again for certain codes. That said, I think there's room to increase your pricing by potentially 20-50%.

My suspicion is you somewhat have your own system of morals/honor concerning what is right / fair for how to treat patients. You probably aren't one of those people listing 20550 as $800 like I saw when a "amnio injection" company sent me someone's EOB. Your idea of fair is probably somewhat "sticky" to what Medicare charges. Here's my problem for you - 10-15 years ago Medicare paid $200ish for a 11750. Medicare paid like over $80 for every foot injection (its like $50 now). When you figure out the overhead and expenses of your practice - do you factor in getting audited for trying to write an AFO? Do you factor in your plural audits for wound care products? At some point what insurance and Medicare pay for our services have no reflection at all on the cost of doing business. Right now United is paying me sub-Medicare locked to like 2018. Nothing, nothing I do for their patients is worth anything and they deny things left and right. The other day they denied the betamethasone in an injection. Meanwhile they want 8% more for their insurance premiums. Equipment pricing is increasing. Staff pricing is increasing. The impression I'm under is you accept Medicare and everything else is cash pay. You are in an ideal system to ask for what you need and the world is only getting more expensive. I think your post is somewhat a commentary on the ridiculousness of the system, but if our prices stay stagnant the rest of the world will just keep increasing in cost around them.

Reading this reminded me of this post. Small sample size, but sounds rough out there.

 

[heybrother]

Reading this reminded me of this post. Small sample size, but sounds rough out there.

Jokingly, I'm worse than that person. I saw a VA job that interested me the other day and thought - boy will my 50% ownership clinic be surprised when I just show up one day and quit.

That said - that person does sound fairly depressed. I would describe myself merely as "weary of the things I can't change fast enough". I'd love to drop Athena who is massively jerking us around to the tune of tens of thousands of dollars. My partner refuses. My office manager claimed she'd reviewed our expenses, services, equipment pricing etc, but the other day I found 2 items we are massively overpaying for. The savings are likely to be thousands of dollars a year. I have no shortage of insurances I want to severe ties with. I'm reading about in office MIS - I hope Feli doesn't see this.

That said - let's say I drove my visit values up. Added new profitable services. I will say - I'm still drowning in notes. Not sure how to solve that problem. I suppose if I added more profitable services I could decrease visits to offer them but we'll see!

Final funny thought. I flatter myself that no one else in town is very dynamic. Its true. Many also have terrible personalities. That said - nothing I'm offering is new. I can't imagine what it would be like trying to compete in a big city.

 

[DYK343]

Jokingly, I'm worse than that person. I saw a VA job that interested me the other day and thought - boy will my 50% ownership clinic be surprised when I just show up one day and quit.

That said - that person does sound fairly depressed. I would describe myself merely as "weary of the things I can't change fast enough". I'd love to drop Athena who is massively jerking us around to the tune of tens of thousands of dollars. My partner refuses. My office manager claimed she'd reviewed our expenses, services, equipment pricing etc, but the other day I found 2 items we are massively overpaying for. The savings are likely to be thousands of dollars a year. I have no shortage of insurances I want to severe ties with. I'm reading about in office MIS - I hope Feli doesn't see this.

That said - let's say I drove my visit values up. Added new profitable services. I will say - I'm still drowning in notes. Not sure how to solve that problem. I suppose if I added more profitable services I could decrease visits to offer them but we'll see!

Final funny thought. I flatter myself that no one else in town is very dynamic. Its true. Many also have terrible personalities. That said - nothing I'm offering is new. I can't imagine what it would be like trying to compete in a big city.

Athena sucks so much. On every front its terrible.

 

[heybrother]

Athena sucks so much. On every front its terrible.

Yep. They are awful. Blows my mind when they adjust claims down to zero where the patient owes us the full amount. Or where they misread the EOB and wipe-out the copay the pay owes us. I've said this before - I have an insurance that pays 165% of the Medicare non-facility value. Athena kept deleting $60 copays and writing down our payment so that $90 injections became $30 or $124 99213s become $64. Billing Medicare for DME with them is a nightmare.

 

[Feli]

Athena sucks so much. On every front its terrible.

This can be said of at least a half dozen common plans

 

[heybrother]

This can be said of at least a half dozen common plans

So - how much should billing + EHR cost. That's something I'd love for someone to talk about.

In my area - Athena was letting new MDs join for 5% of collections. Where I'm sitting, that seems like enormous savings, but its interesting that for a group with high enough collections - having your own biller/coder will set a finite ceiling on your billing costs ie. 4% of millions vs just paying $50K for a coder is an easy win.

 

[dtrack22]

. I can't imagine what it would be like trying to compete in a big city.

You just have to market better than other people. You don’t even have to be good. There is a DPM in the Los Angeles area who does absolutely awful work and posts it on Instagram. It’s a good follow if you want to simultaneously feel great and terrible about your job/our profession. But patients are generally uninformed and if you can convince them they need something and make them believe you are good…

 

[Feli]

So - how much should billing + EHR cost. That's something I'd love for someone to talk about.

In my area - Athena was letting new MDs join for 5% of collections. Where I'm sitting, that seems like enormous savings, but its interesting that for a group with high enough collections - having your own biller/coder will set a finite ceiling on your billing costs ie. 4% of millions vs just paying $50K for a coder is an easy win.

I pay 5% of collections (insurance, not OTC obviously) to the billing company.
I interviewed a few, and this one had great references from other specialty surgeons (ophtho, plastics, pedi spec surg, retired DPM, etc). I'm probably their lowest earner, but they seem fine taking care of me too. Credential is $100/hr, but they got me on all meaningful plans very fast, getting me onto remaining crap straggler plans that I don't want but get appts with occasionally, and I sometimes get ACH paid for surgery or office pts in 3days or not much longer than that. They will also help the front desk by email or phone with prior auth tips, work comp, etc and are pretty responsive. I would say I'm way above avg for DPM for coding, but I've learned a few new things already. I'm not sure it gets much better than that. I don't have the physical space or volume or desire to ever do in-house billing... but it works for some ppl or bigger groups.

Kareo is about $650/mo w tax (EHR + billing/sched side) after 2 or 3mo free.
I could probably pay less (for both billing and EMR), but I have seen too many garbage EMRs over my various jobs. The EMR and its lag and difficulty - or lack thereof - is key to your efficiency. I wanted one that's pretty easy to learn. The staff like it and picked it up fast, I had liked it before, makes one or 2pg notes easy to read and easy to send to PCPs, biller recommended considering it. It can get your payments to post right from payers into pt account, it sends appt reminders, it sends pt statements for biller (free email, like 85c for mailed), ppl can pay through the website. I have used AdvancedMD (crap, much lag/crash) and eClinical Works (meh... long notes that look weird) and Epic (good, but very expensive for solo) and govt IHS/VA (average) and many others before. Kareo's not perfect, but it works well overall.

 

[heybrother]

I pay 5% of collections (insurance, not OTC obviously) to the billing company.
I interviewed a few, and this one had great references from other specialty surgeons (ophtho, plastics, pedi spec surg, retired DPM, etc). I'm probably their lowest earner, but they seem fine taking care of me too. Credential is $100/hr, but they got me on all meaningful plans very fast, getting me onto remaining crap straggler plans that I don't want but get appts with occasionally, and I sometimes get ACH paid for surgery or office pts in 3days or not much longer than that. They will also help the front desk by email or phone with prior auth tips, work comp, etc and are pretty responsive. I would say I'm way above avg for DPM for coding, but I've learned a few new things already. I'm not sure it gets much better than that. I don't have the physical space or volume or desire to ever do in-house billing... but it works for some ppl or bigger groups.

Kareo is about $650/mo w tax (EHR + billing/sched side) after 2 or 3mo free.
I could probably pay less (for both billing and EMR), but I have seen too many garbage EMRs over my various jobs. The EMR and its lag and difficulty - or lack thereof - is key to your efficiency. I wanted one that's pretty easy to learn. The staff like it and picked it up fast, I had liked it before, makes one or 2pg notes easy to read and easy to send to PCPs, biller recommended considering it. It can get your payments to post right from payers into pt account, it sends appt reminders, it sends pt statements for biller (free email, like 85c for mailed), ppl can pay through the website. I have used AdvancedMD (crap, much lag/crash) and eClinical Works (meh... long notes that look weird) and Epic (good, but very expensive for solo) and govt IHS/VA (average) and many others before. Kareo's not perfect, but it works well overall.

Interesting. We would be tens of thousands ahead with this arrangement though it would be fascinating to find a way to fix these prices at a set amount.

 

[DYK343]

This can be said of at least a half dozen common plans

We switched to Athena at the MSG.
Immediately went down about 20% in collections with its built in billing platform.
We went from profitable and money to spare to hiring freeze after switching to Athena.
Its expensive up front and more expensive at the end of the month when collections come in.
Athena is garbage.
Google around and you will see that this is its main complaint - billing/collections dropping significantly after switching.
Avoid.

 

[Creflo]

Someone asked in another thread about cash podiatry practices, and since it's been a while here is an update - I have operated a hybrid practice for the past 7 or so years since I got out of the military. It has been original medicare only, all others self pay with an invoice provided. I recently took the plunge to opt out of medicare which will go into effect in about one month. After 12 audits in 1.5 years (1 nail/callus audit, 10 dme audits, and 1 audit on 25 modifier claims), and after Medicare botched up my revalidation and treated me like a second class citizen during the process (I did get revalidated), I began to feel that complying with Medicare got in the way of doing my job of treating patients. This, along with their payment rate not keeping up with inflation caused me to take the plunge.

 

[Creflo]

First 4 days into no insurance. Scary, but the first four days were decent. Time will tell how it continues. I feel that as long as inflation rises and reimbursements either decline or stay the same, that today's model is heading towards not being sustainable. Patients will face longer wait times, more time on hold when they call, and lower quality of care. I feel that the worse this gets, the easier it will be to not take insurance as there will be patients who want better. I have a 90 day grace period to opt back into Medicare, and will do everything possible to not do this.

 

[Feli]

I go back and forth on this.

I agree that people are sick of waiting longer, crap customer service at normal clinics... and the have the money. 100%.

On the other hand, I am also consistently amaaaazed how cheap many people are. They'll be telling me or the MA about how they just got back from a week or two in Hawii for the 4th year in a row or how they bought a new $100k truck... then they'll complain and refuse to pay the $18 that was their 20% on the 11056 or e/m from a few months ago.

...the major thing you have working for you, if you're still doing house calls as you were earlier in this thread, is that the homebound and assisted living and those types of people are largely done travelling or doing fancy dining/shows/autos. Many of them have a lot of money (stock market has been amazing since 2009) that they will just spend or donate or leave to family. Many have a large account and being minimally ambulatory, they really have no reason to be stingy anymore.

If my practicing career were going to keep running for a substantial number of years, I'd like to do cash pay for office/surgery. A fair number of PCPs do it with mixed success. I considered it. It'd be a lot more variable than normal insurance-based office in the right area... but I agree it's the best play in the long run. It's really only highly viable in affluent areas with minimal competition (but same for insurance PP, imo). I hope it continues to work well for you.

 

[pod squad]

For a cash pay practice to work (or really any business) you need a value proposition. Why are insured patients going to break out a few hundred bucks to see you as opposed to the guy up the street who is in-network? Figure that out, and you're golden. Doing house calls/mobile is a built in value prop. Offering non-covered cash pay services is another way, although most practices offer these while also accepting insurance (insurance gets them in the door, then up-sell on the extra offerings). Maybe you spend a ton of time with patients and offer a more concierge type experience, holisitic/functional medicine, after-hours access etc. Above all, the key for this to work is to keep your overhead VERY low. I agree that direct care is going to become more and more viable/necessary as cost of doing business goes up and insurance payments go down/stagnate.

 

[GreenHousePub]

First 4 days into no insurance. Scary, but the first four days were decent. Time will tell how it continues. I feel that as long as inflation rises and reimbursements either decline or stay the same, that today's model is heading towards not being sustainable. Patients will face longer wait times, more time on hold when they call, and lower quality of care. I feel that the worse this gets, the easier it will be to not take insurance as there will be patients who want better. I have a 90 day grace period to opt back into Medicare, and will do everything possible to not do this.

You got sucked into the whole "direct care" podiatry circuit? Are you going to be evangelizing LinkedIn next?

 

[heybrother]

You got sucked into the whole "direct care" podiatry circuit? Are you going to be evangelizing LinkedIn next?

I'm sort of under the impression he was already self pay + Medicare only.

Whenever someone tells me they are cash pay - the question I want to ask is - what is your fee schedule.

 

[MicroPod]

I know of some people out there who have catastrophic only health insurance and then just pay for everything else out of pocket or through HSA. My parents actually had this type of a setup until they reached the age for Medicare. My dad always hated going to the doctor and never knowing anything about the cost until awhile after.

 

[Feli]

I know of some people out there who have catastrophic only health insurance and then just pay for everything else out of pocket or through HSA. My parents actually had this type of a setup until they reached the age for Medicare. My dad always hated going to the doctor and never knowing anything about the cost until awhile after.

This exists... for some F&A office stuff.
Barely anyone will pay for our big ticket stuff like surgery+DME or ongoing WCare with OOP/HSA. They simply avoid it or get on 'marketplace' MCA.

At the end of the day, there are just too many of us... if one won't take their insurance, another will.