“You can get past the dead end. You can break through the ceiling. I did and so have countless others.”

Insurance vs Cash Practices

A foundational concept of The Nurse Practitioner Model is avoiding insurance and opening a cash practice. Every nurse practitioner has billed insurance for services rendered at their jobs. You must make sure you meet certain criteria in the HPI, the ROS, the physical exam, and ensure that the visit meets a certain “complexity” so you can up bill.

Is this the practice of advance nursing and medicine?

Hell no!

How much time do you spend in a given day charting? Have you ever thought about how much of that charting is actually relevant to patient care? Or just relevant to the real world? Its total nonsense and a waste of your time and efforts. It is busy work.

But unfortunately, we do live in a real world with insurance and government regulations. If you utilize insurance, you must play the medical billing game. I know many of you have spent HOURS after clinic charting, charting, charting…

Yes, there are elements of charting you must master to cover your ASSets, but a large portion of it is simply so you can bill correctly and line the administrators pockets further. Screw that.

If you are serious about going out on your own, you need to make an important decision:

  1. Are you going to be an insurance accepting practice?
  2. Or are you going to be a cash practice?

This is a CRITICAL decision you need to make before you even contemplate business specifics.

There are pros and cons to both.

Insurance Pros:

  1. Accessing more patients. A vast majority of individuals have some form of insurance. Many of which are Medicaid and Medicare. Let’s face it, these people are usually the sicker ones and the large segment of the population that consume healthcare services. You need to ask yourself: Are these the patients you want to be treating?
  2. Reliable payments. For the most part, insurance is a reliable source of income. You bill a patient, this goes into a payment queue, then you receive payment 2 weeks later typically. It’s very simple and predictable.
  3. Increasing revenue per encounter. This mean that for each encounter, you can increase the revenue generated by this encounter. For example, giving injections, doing a small procedure, offering additional education like tobacco cessation, etc… So, you can turn that basic 30 minute 44204 charge into multiple charges and put more money into your pocket.

Insurance Cons:

  1. What the insurance says GOES. So, what does that even mean? It means that your practice is now dictated by insurance payment protocols, treatment guidelines, pre-authorizations, and what the insurance company determines is your practice “specialty.” I tried to get credentialed as an opioid addiction treatment program once. I was denied by the biggest carrier, BCBS, for this reason: “There is adequate coverage for that service in your area.” Totally untrue… But the payment gods from above said so. Well, guess what? I was out of a lot of money…
  2. Audits. Insurance companies, Medicaid, and Medicare can audit any of your charts at any time. If they don’t feel like your service was covered or that your charting justified a billing, they can simply take their money back. That means you had a patient encounter and provided a service that you now did not get paid for. This is a waste of your time and could be financially disrupting to your business.
  3. Charting. You must chart based off Medicare, Medicaid and insurance guidelines. These guidelines were created by government bureaucrats who don’t practice medicine in the real world. You have all the elements of a chart that need to be completed to simply just get paid. Have you ever documented a common cold? You have this ridiculously complex HPI for the presentation, ROS, physical exam, assessment, plan, etc… It is literally a common cold that can be addressed with a simple history or even a phone call. I talked with a retired doctor who used to chart all his patients on index cards filed in a small box on his desk… He never had one malpractice case and was a good physician.
  4. Pre-authorizations. Let’s say you have someone who could benefit from using Victoza for their diabetes, could use a MRI of their back because they have sciatica, or a man who needs testosterone but his level is borderline low, therefore you decide to prescribe your intervention. Oh wait, let’s ask your overlord first if you can do that. How much time, energy, and effort are wasted on phone calls with insurance companies or filling out ridiculous forms? A LOT. You are running a business; your time is valuable and should be utilized doing activities that make you more money.
  5. Billing. You must play the medical billing game. Coding correctly, charting correctly, filing the encounters, etc… It is a headache and an expense to the business owner. Hiring in house billers can be expensive as is hiring an outside company to do it for you. Most of these clowns charge you 7% of collections. That is 7% of your sweat and tears you are giving to some “billing specialist” who literally just clicks some buttons. These people do not work that hard. Don’t be fooled.
  6. EMR. Meaningful use, “HIPAA” compliant, and other fancy terms created by the administrative elites. Yes, your EMR must be fully compliant with Medicare and Medicaid guidelines. Guess what? They can be expensive and add more red tape to your practice.

Insurance is a part of the real world if you practice in the United States. It’s a fact of life and if you decide to use it, be prepared for many hours of your time and energy being wasted dealing with this 3rd party. Think to yourself if that time is truly worth it to your business? The predominant goal of business is to make money. Being on the phone for hours on end is not making you money.

Well what about cash? Cash is king. Enough said. Cash practices can generate enormous amounts of profit with low overhead.

Cash Cons:

  1. Smaller patient censuses. If you run a cash medical practice, then this is a fact you need to be aware of. You will see fewer patients than an insurance practice. Most people in the United States have been brain washed to believe they have to have medical insurance. Therefore, many people will not utilize your services because you do not accept it, even though it is often times cheaper when you account for co-pays and deductibles. But there are many people out there with disposable incomes who are more than happy to give you their money for a valuable service.
  2. Niches. Operating a cash practice requires a niche. Providing general medical services like primary care or urgent care is not going to be profitable. There simply are not enough patients willing to pay cash for these services. You must find your niche practice if you are going into cash. Niches could be opioid addiction, weight loss, aesthetics, hormone replacement, etc…

Cash Pros:

  1. Low overhead. You can operate a cash practice with two people: provider and a medical assistant. You do not need to hire receptionists, medical billers, or office managers. A cash practice is very simple. Literally all you need is a basic EMR or even paper charts, scheduling software (cheap), and basic bookkeeping software. You can do this on less than $50 a month.
  2. Basic charting. Do you know how liberating it is to chart as you wish? You do not have to worry about annoying insurance audits. You skip the insurance. The patient is paying you. So, what does that mean in terms of charting? You chart for you! No one else needs to understand what that chart means other than you. Yes, chart to cover your ass, but otherwise you can skip the unnecessary elements of your standard medical chart. A patient has a common cold? This could be your chart: “Patient presents complaining of rhinorrhea, cough, congestion, sore throat. Throat mildly erythematous, no lymphadenopthy, rhinorrhea present, a febrile. Mucinex D and flonase called in. Return as needed.” DONE. Ahhh, so simple.
  3. No 3rd parties. A cash practice is you and you alone. No 3rd parties. No dealing with insurance companies or medical billing companies. No more headaches from Medicare and Medicaid. A cash practice is the patient and you. They pay you for a service, you provide it, and they leave. Think of it as the same thing as what a barber or accountant does. There is literally no difference in terms of business. Do barbers or accountants go through a 3rd party to get paid? Haha, no, could you imagine? Why should we be any different?
  4. Big profits. Low overhead, less time being spent dealing with 3rd party nonsense, and more time, is the result of a cash practice. You now have all this extra time to build your business. Spend this time marketing, seeing more patients and networking. These activities build your business and increase your revenue dramatically. This turns into large profits because your overhead is low, and revenue is high.
  5. FREEDOM. You are now operating a business like most other businesses. You don’t have 3rd parties dictating your life. You do what you wish while maintaining a standard of care and still practicing safe medicine. You are truly free. It is a feeling that is hard to explain but the work necessary to get there is well worth it.

There are obviously many other pros and cons that I did not list for both insurance and cash practices, but these are the predominant ones you should be aware of before you start your business. I urge each nurse practitioner out there to consider a cash operation. You would be surprised how much side money you can make with a part time cash practice.

12 Responses

  1. Hi I am trying to create a pediatric and adult care practice, accepting insurance for ped patients and doing non insured patients (Hispanic focus) most don’t have insurance. Unsure on how much to bill for uninsured visits ?
    Like physicals, sick visits and so forth ? Any suggestions

  2. Do I need to use HIPAA compliant charting programs and HIPAA forms with a cash business? I’m using jot forms, but would have to pay for HIPAA compliance. I’ve heard and read NO on this and that if I do the HIPAA forms it opens me up to risk of litigation.

    1. Rebecca,

      Technically, HIPAA is a mandated program if you are accepting CMS dollars. But, to err on the side of caution, I would still be HIPAA compliant…

      Why not just use a simple EMR like Simple Practice? It would cost you a whopping $60 a month and you would be compliant.

      Not sure on how any of this would open you up for litigation. That makes no sense. Patients should sign a privacy policies though to be compliant. Those are included in any of our courses.

      1. Thanks for responding Justin. I will look into simple practice for a future potential purchase. My husband and I are trying to start up with minimal expenses and jot is low cost for compliance, has templates, and is simple to use, so we may go with that first. I do have access to your courses and appreciate everything you have put out there and done for the professional growth of the nursing community.

        1. You are very welcome. Word of caution: transfering EMRs as you grow is a real pain in the rear… I would highly advise getting into something now vs later. Simple Practice is dirt cheap.

  3. Hi Justin,

    Do you know if it is possible to provide cash based office visits but have prescriptions be covered by insurance? I’m assuming no because insurance wants to know why they are on the med in the first place. Specifically regarding weight loss clinics.

      1. Thanks for this great article!

        As a PMHNP with a cash-only practice, can patients submit the PMHNP’s bill for psychotherapy and/or med management to their insurance company on their own, after they pay the PMHNP?

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