The Delicate Act of Dropping an Insurance Plan

June 5, 2017

As a solo physician, it's not easy to drop an insurance plan when you know that could have a negative impact on your patients.

When I was part of a hospital run practice, as far as I could tell, we were participating providers for all insurance plans.  We took Medicare and all the commercial plans.  We saw Medicaid patients and the uninsured in a separate clinic.

When I left to go solo, I continued to participate in all the major commercial plans and Medicare.  When I was employed, a patient was a patient.  I didn't know, or need to know, what insurance they had.  I really paid no attention to what their copays or coinsurance were, and I had no idea whether they had a balance or not.  I could focus on medicine and I let administration take care of the money.

Well, now I am the administration.  And with our EHR, I can see what insurance a patient has and what they owe the practice every time I open a chart.  Let me rephrase that -I am forced to see what insurance they have and how much they owe the practice every time I open a chart. Right at the top of the page is what their insurance is and their copay amount.  I get a pop-up if they have a balance.  I still don't know without really looking how much each payer reimburses for a particular service, but I do know this - it is not equal across the board.

I have always thought it odd that people complain about Medicare reimbursement.  At least their fees are transparent.  They are available for all to see.  And they are the same for any given region.

Not so for commercial payers.  They can pay one physician twice as much as another for doing the same thing.  And often, you won't even know how much a plan pays for a certain CPT code until you submit it for the first time.

There is one payer in our area who is notorious for poor reimbursement.  As such, we are among the last practices in our specialty who still take it.  And thus far, they have been unwilling to negotiate better rates.  We are seriously considering dropping them.  As a business person, it seems the only logical thing to do.  As a physician...ah, and therein lies the rub.

Medicine is very different from other businesses.  It is a vocation.  A calling.  A service.  People fully understand (although they may not be happy about it) when a business has to raise its prices because the cost of gas went up.  People will pay $200 a month for cell phone service and $50 a pop for a mani-pedi, and if the business says, "Well, due to inflation, we need to raise our prices too" they accept that. But healthcare professionals are supposed to look past the ugliness of business and provide service regardless.  But somehow, we need to keep employees paid, keep a roof over our head, and buy the supplies we need to keep providing quality care.  But physician offices can't raise prices.  All we can do is attempt to negotiate with payers and when that fails, well, then we have to drop them.  Patients can either find another practice or agree to pay cash.  And, they can call their insurance company and tell them that they need to come to the table because there is no one in the area that participates anymore because they refuse to increase reimbursement.  They also refuse to pay for many tests and drugs, but that's a whole other rant.

Informing the insurance company seems pretty straight-forward.  Again, as a business owner, I don't think it will be difficult.  But as a physician, and one who sees patients for years because they have chronic medical illnesses, how do I tell the patients that I will no longer participate in their plan without sounding heartless and greedy.  One colleague says that I do not need to extend an explanation  I can merely need to inform them of the decision.  That seems impersonal to me.  Maybe that is the right way to look at it, but it seems harsh. I've known some of these patients for five years or more.  Granted, I am not dismissing them from the practice, they are welcome to see us out of network.  They would just need to pay us and then try to get reimbursed by their plan. 

This will be the first of probably several plans over the years that we will drop.  I have toyed with the idea of going "cash only" for a while.  This may be the start.