Direct-Pay Medical Practices
For seven years, 48-year-old
And she likes it that way.
"It's a lot more practical and a lot less expensive," Akers-Smith says of DocTalker Family Medicine in
The office is part of a growing movement toward cash-only medical practices, which do away with third-party billing and waiting for reimbursement and put responsibility for payment squarely on the patient.
Cash-only, or direct-pay, medical practices cater to the uninsured and people like Akers-Smith with high-deductible health plans that kick in for major expenditures.
Across the country, there are now 500 to 1,000 family medicine practices operating on a cash-only model, estimates
With the unemployment rate above 9 percent and some 46 million Americans lacking insurance, the market for affordable healthcare is ripe.
The cash-only model is based on the idea that rather than charging higher, so-called retail rates for uninsured patients while negotiating discounted rates with insurance companies for covered patients, it's fairer -- and possible -- to offer flat and reasonable rates to all. These practices "are actually very good at meeting the needs of those patients who have agreed to be a part of them," Epperly says. "For the patients that have the means to do this, it's an outstanding model of the patient-centered medical home."
On the doctors' part, what prompts entry into cash-only medicine is usually some combination of frustration with insurance reimbursement rates and the increasing cost of overhead associated with doing business.
Direct-pay medicine can be a smart business model, says
Medical practices that participate in SimpleCare's network agree to charge no-hassle, discounted prices to the organization's
members. Patients pay a predetermined fee based on whether their visit is minimal length (five minutes), brief (10 minutes), short
(15 minutes), medium length (20 minutes), long (30 minutes), or extended (60 minutes). Fees vary depending on the medical practice,
but a good rule of thumb is
Typically, "it's a matter of patients coming in who either have no office-visit coverage or no insurance for the visit at all,"
Some doctors have chosen to convert to a cash-only model -- which typically allows payment by credit card or check -- without
joining a formal network like SimpleCare.
"We basically run a practice where people
pay us for time," Dappen says. The practice has a "transparent pricing system" that he believes "creates the proper relationship a
doctor is supposed to have with a patient." Patients at DocTalker pay for the exact amount of time it takes to solve a medical
issue -- in person, by phone, or via E-mail. A 15-minute problem would cost
"Certainly, consumers who see contracted providers have lower cost sharing," Pisano says, because in-network physicians aren't allowed to charge more than the rate they've negotiated with the insurers. Pisano also notes that many people with insurance have the option to go out of network, which would permit them to see a cash-only provider. The hitch is that it's up to the patient to get reimbursed for whatever percentage the insurance company covers for out-of-network service. (Pisano notes that some out-of-network providers charge "several hundred or even a thousand percent more than what
Akers-Smith is comfortable with a high-deductible health insurance plan combined with paying out of pocket for routine visits to see Dappen at DocTalker. "We have the good fortune and blessing to be a pretty healthy family," she says of herself, her husband, and three sons, ages 14, 12, and 9. She appreciates the convenience of being able to get simple answers over the phone for a fee without a trip to the office. Dappen says he tries to be very accessible to his patients, providing them a direct office number, cellphone number, and E-mail address. Akers-Smith says that she always gets a response from the office within 30 minutes, even after business hours. "If I have a question, I can get my question answered," she says.
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Healthcare: Cash-Only or Direct-Pay Medical Practices
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