Practice Management Alert

Practices blinded by dollar signs on the front end may find themselves stretched thin down the line

The promise of immediate payment may tempt you to participate with a discount healthcare program, but beware - the discounted fees you'll have to charge patients may not even cover your costs.
 
In last month's issue we explained the possible benefits of participating with one particular discount healthcare plan, AmeriPlan Health (see "Meet the Healthcare Plan Promising Payment in 72 Hours" in the December 2004 issue). There are, in fact, many types of discount plans available. While the benefits for providers can be great - such as payment up front and affordable healthcare for the uninsured - the downside is that some practices actually lose money when they participate.
 
Advice from the field: "Our office has been approached by companies like AmeriPlan before and has chosen not to join for the following reasons," says Karen Deardurff, insurance specialist at Otorhinolaryngology Inc. in South Bend, Ind.:
 
1. The company wasn't able to provide the database it used to determine the usual and customary allowances - "and they couldn't tell us at what percentile reimbursement would be set," Deardurff says. "Depending on the database being used and what geographic region they are linking your practice to, this can produce contract amounts that are far below Medicare and Medicaid rates."
 
2. Reimbursement for surgery wouldn't even cover costs, yet the fee was still too high for patients to afford. Many patients sign up for a discount healthcare plan when they can't afford even basic office visits, "so how are they going to pay for a major surgery - even if it too is discounted?" she asks.
 
Patients can't pay a discounted fee "when they don't have much in the first place," agrees Hannah G. O'Brien, administrator with Deborah J. Morris and Associates, MD, PA, in Owings Mills, Md. "The headaches caused by getting people to pay, follow-up with insurance, etc., is not worth the small fee we would receive," she says.
 
And if the plan has set rates at or below Medicare's, the fee for a surgery may not even address hospital costs - meaning the provider can't afford to perform the surgery, Deardurff adds.
 
Bottom line: General practitioners or certain non-surgical practices may benefit from these plans by reducing out-of-pocket expenses and increasing volume, Deardurff says. But many specialists can't really afford to participate, she adds.
 
Another solution: "We have been offering a program called Care Credit for about a year now, and it seems to be working well," Deardurff says. The program issues patients a medical credit card with the possibility of interest-free payment plans. Care Credit pays your practice in full for the patient's charges and then the patient is responsible for making monthly payments to the card company, Deardurff says.
 
Check it out: To explore this option for uninsured or underinsured patients, visit www.carecredit.com.