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Accepting Cash Payments While Being Credentialed With Insurance

Money Cash Dollar Currency Bill  - jillianwashere / Pixabay

Can you accept cash for services in your practice if you are credentialed with insurance? The answer is “it depends.”

First and foremost, the rules are different with Medicare. Check out the Medicare article HERE for that discussion. Also, it would be a good idea to review the article on NPI numbers HERE. Now, lets get back to it.

The ultimate dependent factor in determining if you can accept cash as payment or not is this:

What legal entity are you conducting business under?

If you are credentialed with insurance through your employer and start a niche side practice where you accept cash only, then yes, you can just accept cash and not worry about the insurance companies you are credentialed with. Why? Because you are ONLY credentialed with those insurance companies through your employer. Essentially, you are only credentialed under your employers “entity.” When you credential with insurance, not only are you credentialed as an individual provider, but there is also a group NPI number that is credentialed. This group NPI covers the “legal entity” and then the provider is simply added to it as a billing provider. This ability to bill insurance does not go with you everywhere though.

If you went to another employer, they would have to recredential you under their group NPI and “legal entity.” Yes, the insurance company already knows you and the process is much faster the second time, but you still must be credentialed with the new employer to bill insurance through them.

I know this sounds complicated, because honestly it is. Insurance companies OVER COMPLICATE healthcare in this country, but that is an entirely different topic for another time. What you need to know is this:

If you want to start your own niche cash accepting practice, then you can remain cash only whether if you are credentialed with insurance or not under a different group NPI (your employer). This is because you are going to be operating under a SEPARATE legal entity: your LLC!

When you are operating under a separate “legal entity”, then being credentialed with insurance under your employer doesn’t matter. You are operating under a totally separate entity. The entity YOU OWN is NOT credentialed with insurance, even though YOU are personally credentialed with insurance under your employer. Yes, that sounds complicated, so read it again if you did not understand it.

Another warning though, this DOES NOT apply to Medicare. Again, read that article HERE if you do not understand the process of accepting cash while being enrolled with Medicare.

Now, what about seeing cash patients in a practice you own that is credentialed with insurance? Can you do that? Yes, you can. You can do this this 2 ways:

  1. Charge cash for NON-covered services such as IV vitamin infusion, testosterone replacement in certain circumstances, ketamine infusion, etc., but continue billing for covered services.
  2. Operate the “cash portion” of your practice under a separate legal entity.

You need to be careful when billing for “non-covered” services though. You must ENSURE the service is in fact not covered. A simple phone call to the insurance company will reveal this answer to you, as will using some common sense. I can almost guarantee you that insurance will not pay for an immune boosting IV vitamin infusion or any other off label therapy. But as always, do your due diligence.

In terms of operating a separate cash practice in your current practice, this can easily be done by forming a separate LLC and operating that portion of your business STRICTLY through it. A billing specialist friend of mine also suggested that you should have that practices entry way as separate to your insurance accepting one in case you ever were visited by an insurance company. Is that completely necessary? It depends on the insurance company and what is present in your contract, so again, you need to do your due diligence in that regard. But I do know many providers that operate under this model without issue.

Many providers out there have an insurance accepting primary care practice but also have a separate cash accepting practice in the same building. I know an MD who has a primary care practice but also has a med spa in the same practice that is cash only. He operates this portion of his practice under a separate LLC, I actually asked him! He has EVERYTHING separate, including the EMR. Remember that, keep EVERYTHING separate just in case you were ever audited, which likely would never happen. Think about it, you are SAVING the insurance company money by not billing them. This is not a priority for them.

If you are wanting to open a cash accepting niche side practice but are credentialed through insurance with your employer, then do not worry about it. Remember, you are operating under a totally separate legal entity!

If you own an insurance accepting practice and want to begin providing cash only services, then form a separate entity and keep everything separate from your insurance practice!

4 Responses

  1. Good info. Instead of doing a separate LLC could you do a DBA? For instance you have a primary care practice and want to open a weight lose clinic.

    1. No, it needs to be a SEPARATE LEGAL ENTITY. A DBA is not that. It is just an extension of your already established legal entity that is accepting insurance. That would not work.

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