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

How to Deal With Patients Who Want to Use Their Insurance for Cash Based Services

health insurance policy

A common problem amongst cash practices is when a patient wants to use their insurance. Listen, I get it… They are paying for it or have a good plan through their employer. I truly do empathize with them and get it, but at the end of the day my own sanity is important as well. Not just for myself, but for my family, friends, and even the patients. Most nurse practitioners have worked in an insurance accepting practice and know how it sucks your soul dry…


Poor reimbursement…

To make a living, you have to turn your practice into a conveyor belt (which results in subpar care)…

It increases your practices expenses

Dealing with insurance audits, charge backs, or never getting paid…

Having to chart how “they” want you to chart…

And so forth and so forth…

So, while I sympathize with the patient wanting to use their insurance, it is just not going to happen in my practice, and for many of my nurse practitioner sisters and brothers’ practices as well. Therefore, how do you deal with the patient who is wanting to use their insurance for your cash-based niche services?

It all starts with either your website or the initial phone call with the patient. Personally, I advise not putting that you don’t accept insurance on your website because you lose the ability to talk with the patient explaining why you don’t.

Often, a patient will call my men’s health clinic or even my medical cannabis clinic and ask why we don’t accept insurance. After explaining it to them, they understand and STILL book. Therefore, it gives you an opportunity to explain it over a phone call and allows you to sell your service. Sure, you will get people who call and waste your time, but that is part of business… accept it, but you will also get calls that TURN into patients. The effort is worthwhile (remember, building a practice is not a sprint, it is a long marathon… it takes time to build a solid patient base).

One of the first questions the patient will ask over the phone or via an email/message to your practice will be:

“Do you accept *insert insurance company*?”

How do you respond? Simple:

“Thank you for your inquiry. At this time, we do not accept insurance. The reason being is that our services are not considered a medical necessity from the insurance companies. While the services we provide help you live a healthier life and feel better, the insurance companies do not want to pay for it. Therefore, we do not accept insurance because they will not cover any of this. No worries though, you can always try to seek partial reimbursement on your own from your insurance company and we can provide the paperwork for you if you want to go that route. Additionally, you will find our prices to be very affordable compared to similar practices.”

A more specific response with my men’s health clinic is this:

“Thank you for your inquiry. At this time, we do not accept insurance. We tried to accept insurance at first, but the insurance companies will only cover testosterone replacement therapy if your total testosterone levels are less than 250. You can be experiencing low T symptoms all the way up to a total T level of 550 and still benefit from treatment, but the insurance companies think otherwise. Therefore, we are more progressive with our treatment plans here and insurance typically will not cover our services. You are not only paying for the TRT, but you also receive unlimited concierge visits, the supplies, and complimentary B12 injections all for $130 month. We try to provide as much value as possible for our patients.”

Or plug in this statement somewhere in the conversation:

“While we don’t accept insurance, you can still use your HSA or FSA cards for our services!”

The three above statements WORK. My medical assistants know these like the back of their hand. Sure, there are going to be people who hang up, complain, or say no thanks, which is fine. But there are others who find VALUE in the services we are providing and are more than happy to pay cash for them. I don’t care where you live or what limiting belief you have (like everyone only has Medicaid in my town), there are people who will pay you cash for these services. Any nurse practitioner who owns a niche cash practice will tell you the same thing.

I have run the numbers at my clinics, and it is around a 30-35% close rate on potential patient leads who call wanting to schedule an appointment. Additionally, when patients schedule the initial appointment online, we have to call them anyways to setup their lab draw and that is the time they might ask about insurance. These patients are much hotter leads and that close rate is 80%. Sure, there are patients that fall off because we don’t accept insurance, but a healthy amount still book! Remember, you only need a hundred patients, you don’t need thousands to have a profitable cash-based niche practice.

Another issue that can arise is an established patient wanting to use their insurance or that begins to complain about why you don’t accept their insurance. Again, I empathize with them, but they are fully aware of our policies and know we don’t accept insurance. These are just people sick of paying you as they think their insurance should be covering the service, even though they won’t… Depending on how much they are complaining about it, I will do one of two things:

  1. Provide them a discount to keep them on board. Remember, MAINTAINING established patients is cheaper than OBTAINING new ones… As long as the margins work, then it works for me. Sometimes just a 10-20% discount makes them happy.
  2. Provide them superbills for the services you are providing. All you need to do is list out everything you have been providing them and the associated ICD10 codes for the patient. So, you include the number of visits (billed as a level 4 visit), the medications, any procedures, and the associated ICD10 codes. Piece of cake! Warn the patient though that the insurance company might not pay for anything even after submitting the superbill. Make them FULLY AWARE that you are NOT responsible for them not paying for anything and that you will NOT be part of an audit process with the insurance company.

Out of the two options above, I would rather just give the patient a discount and be done with it. Creating these superbills is nothing but BUSY work and not worth my practices time to create. If it is a slow day, then sure my medical assistant can do it… I have found that the insurance companies will partially reimburse the patients about 50% of the time just FYI.

Dealing with the patient that wants to use their insurance is fairly straightforward. Ensure the patient is FULLY AWARE at the time of the initial interaction that you do not accept insurance, but you need to make sure that you EXPLAIN the reasons WHY you don’t. That is critically important.

Most cash paying patients get it. Most of them believe insurance is a giant scam and many of them have huge deductibles that will never be met anyways, so they don’t care about paying cash. Additionally, your target demographic will be patients in higher economic classes, and they don’t really care to pay you directly for your services. While the patient who wants to use their insurance can be problematic, it should not be a significant issue in your practice!

6 Responses

  1. Hey Justin, what are your thoughts about patients wanting you to send scripts to their own pharmacy so they can use their insurance to pay for prescriptions (i.e. phentermine)?

    1. If it doesn’t affect your bottom line, then so be it. If it does, don’t do it. I do NOT send scripts for testosterone in my men’s health practice. That is how we generate income!

  2. Can you accept commercial insurance but offer other services for cash pay, like nutrition/functional medicine services?

  3. Hi Justin,
    I am still not so sure about sending lab orders to local laboratories.
    I am thinking of drawing labs in my clinic for cash only pts (thanks for the vendor list / Access labs discount) and sending lab Rx to local labs for pts who want to use their insurance. As you recommended.
    1) just for phlebotomies and sending samples to Access Labs, do I still need CLIA license?
    2) I still need a centrifuge machine for in-clinic blood draws, right?
    3) if I send scripts of whatever lab panels to local labs and pt got the blood work done, do the labs bill the patient and insurance? So, I have nothing to do with the bills for their labs, right?
    4) I only have big hospital labs around my startup clinic and I don’t know how it works. Do they typlically send the lab results to me somehow electronically or by mail?

    I feel excessively thankful for your help. I am almost there to opening my clinic in May. Thanks Justin! Happy Easter!

    1. 1. No CLIA necessary for drawing labs.
      2. Yes
      3. Yes, they bill the patients insurance for you. If you have a cash based account, they can bill your practice as well.
      4. They usually fax them.

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