Benefits of A Cash-Only Practice

What Is a Cash-Only Practice?

A cash-only medical practice is one that does not accept any insurance, including Medicare or Medicaid they only accept cash. Doctors at these practices are also sometimes called direct-pay doctors or direct primary care doctors. The reason why there is a consideration or even an increasing number of cash-only medical practices is due to the declining reimbursement rates from insurance companies.

Factors Affecting Medical Reimbursement

There are several factors that affect insurance compensations including:

• Re-admission
• Type of insurance policy
• Medical Conditions
• Medical History
• Duration of Treatment

There are also payment systems introduced by the insurance companies that have inadvertently added on to the declining medical reimbursement rates.


Introduction of MIPS (Merit-Based Incentive Payment System)

MIPS (Merit-Based Incentive Payment System) was introduced at the start of 2017 to help determine Medicare payment adjustments.

The 3 old Medicare programs, the Physician Quality Reporting System (PQRS), the Value-based Payment Modifier (VM) Program, and the Medicare Electronic Health Record (EHR) Incentive Program have been merged into the single program – MIPS. 

MIPS makes use of 4 broad categories – Quality, Advancing Care Information, Improvement Activities and Cost to come up with the MIPS Composite Performance Score, which is also known as the MIPS Final Score. This score is then used to ascertain the relevant payment adjustments.

Unfortunately, as it stands today, MIPS is not only costly to implement but the scores derived from the system do not accurately assess the quality of care provided by doctors. The system as well does not consider the provision of care by the entire medical team, which results in inaccurate scoring by the system and resultant inaccurate pay adjustments.

There are also some experts that have opinionated that MIPS will set the quality bar so high that most will not be able to attain a positive payment adjustment.

MIPS also requires a large amount of data from subjected medical practices. If there is not enough supporting information to prove that patients are attaining desired results, from medicaleconomics.com, this could adversely affect reimbursement rates by 9% just from MIPS alone by 2022.


What does this mean for modern day healthcare?

The reduction of reimbursement rates adversely impacts several facets of the current healthcare system.


Less Doctor-Patient Time

With the pressure on doctors to take on more patients due to the reduction of profit per patient, patients are now subjected to spending less time with the doctor.

Due to the time constraint that the doctors face, many doctors try to pre-empt patients, resulting in potential misdirection and incorrect diagnosis due to missing information.

According to a 1999 study published in the Journal of the American Medical Association, most doctors cut their patients off after only 23 seconds and only 25% of patients are allowed to complete their opening sentences.

Not only that, doctors are also required to complete comprehensive record-keeping tasks required by their contracted insurer. If they are unable to meet the requirements set by the insurer, they would not be able to claim from them.

Based on a report by The Atlantic, most doctors only spend 12% to 17% of their time with patients. In other words, the puppet masters are the insurance companies.

Decrease In Quality of Patient Care

With the increasing paperwork demands from the insurance companies, more time has to be dedicated to administrative tasks.

Dr. Kevin Petersen of Las Vegas-based No Insurance Surgery commented that when he was taking insurance, he had 3 full-time employees of which 2 are almost fully devoted to the insurance administrative activities. After switching to a cash-only practice, he was able to cut back on employment costs by hiring only 2 full-time employees and their focus is on servicing and caring for patients.


Why have a Cash-Only Practice?

With the rapidly falling reimbursement rates from insurance companies and the increasing difficulty in the claim process, it is no wonder doctors are starting to look into starting cash-only practices.

There are many benefits to having a cash-only practice.  


Flexibility with Patient Appointments

With insurance out of the picture, doctors have the flexibility to now decide how much time they can spend with each patient. As doctors are able to charge as what they deem fit, they are able to make adjustments as per the patient’s needs. For instance, if a patient has more health conditions, a doctor can choose to charge more for the particular patient so that he is able to spend more time with the patient.

This will improve overall patient care as the patient will get the care and attention that they require. Doctors will also have more time to review the concerns that the patient brings up and come up with a proper diagnosis.

Quoting from Dr. Kevin Peterson, “Work is now 100 percent focused on patients” and “job satisfaction has increased 1000 percent”.  


Increase in Transparency of Medical Costs

With cash-only practices, transactions between doctors and patients are made much simpler. Patients are able to view exactly what services / medications they are paying for and what are the costs for each individual line item, even for complex surgical costs.

In contrast, with insurance companies, coverage costs are almost always vague with little explained and room left for dispute during claims. From an article posted by TIME magazine, most insurance companies as well prohibit disclosure of their reimbursement rates, which causes costs provided by medical practices to vary wildly depending on their contracted insurer.



As a doctor running a cash-only medical practice, you will get full autonomy on the way you would like to run your business. Comparatively, when the medical practice is contracted to an insurance company, the insurance company runs the show as it determines how much the practice will get paid. In other words, you have a boss and someone to answer to.

If you decide to give everyone a holiday bonus, great! Nobody will be there to dictate your actions, you will no longer have to please administrators and pay their expensive wages.

Instead of leaving it up to the insurers to decide how much your services are worth, you get to decide! You get to decide whether to charge higher or lower depending on what you deem your services to be worth.


Cash Services That You May Add

Convinced on a cash-only practice but don’t know where to start? How about looking into Regenerative Medicine?

Regenerative Medicine is not only a cash-only service but it is also one of the highly anticipated upcoming fields in the medical industry as it provides a non-invasive treatment alternative to surgery.

Regenerative Medicine is founded on stem cell research and works by encouraging the patient’s “self-recovery mechanism” through stimulation of damaged tissues or injection of stem cells into the body.

Sourced from: https://www.researchgate.net/

Not only that, most of the patients who seek out Regenerative Medicine are generally not concerned with a cost which would make these services a lot easier to market.

Why not start today?

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