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A DIRECT PAY MODEL ~Neurology Today … “I am not delusional about how long this will take, but I hope this will eventually alleviate my financial concerns.”

A DIRECT PAY MODEL

By Avitzur, Orly MD, MBA, FAAN

Neurology Today:
doi: 10.1097/01.NT.0000464256.58958.7d

Daryl Story, MD, has worked in a traditional neurology practice in Norwalk, CT, for the past 12 and a half years, and, like many neurologists, he has grown disillusioned with the way medicine is practiced today. He recently decided, with the blessing of his group, to spend two to three days a month experimenting with a cash business practice closer to his home in lower Westchester County, NY, where he is an active member of the community. He shares space in his new White Plains, NY, office with another neurologist who is also providing neurologic care through this paradigm. Because they don’t bill insurance companies, the model is called “direct pay”; forgoing insurance means they don’t need administrative staff, and Dr. Story’s overhead is only $1,200 a month. They split the rent for office space and pay a modest utility bill. Dr. Story was able to negotiate “moonlighting” add-on coverage to his medical malpractice insurance that was only 15 percent more than his regular practice insurance cost.

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Dr. Story’s new venture was driven by his dissatisfaction with existing policies, which encourage a greater volume of patients but leave insufficient time to communicate with them.

Figure. DR. ALLEN C....

Figure. DR. ALLEN C….

“Data entry into the EHR [electronic health record] feels like a waste of time since much of the documentation is done to avoid penalties and meet regulatory requirements,” Dr. Story said, voicing a complaint shared by many physicians today. He prefers interacting directly with his patients. “It’s not just doctors who are unhappy, but patients as well,” he said. “They feel that they are not getting what they are paying for when they are referred to an overworked doctor, especially a neurologist with whom they would like to discuss their complex, often worrisome symptoms more fully.”

Dr. Story charges a flat $400 fee for his consultation, which generally lasts an hour or so, and provides 25 percent discounts to friends and colleagues, their referrals, and college students. He uses a separate tax ID for the White Plains practice to avoid insurance problems with private payers with whom the Norwalk practice contracts.

For now, he stays clear of Medicare, since he has received conflicting advice about whether a provider who participates in Medicare in one location may opt out in another. He does not intend to use an annual fee-contracting model since his day job takes up most of his time and he is not able to be available in the expeditious manner with which those patients expect to be seen. He is currently seeing a trickle of patients and hopes to be profitable within two years.

Figure. DR. MICHAEL ...

Figure. DR. MICHAEL …

“I am not delusional about how long this will take, but I hope this will eventually alleviate my financial concerns. And when I am able to do that, I intend to give back to my community by volunteering with the underserved,” Dr. Story said. For now, he is marketing his practice through his local ties, related ads, and social media.

Denver neurologist and headache specialist Michael A. Ament, MD, MBA, had been in practice for four years in a five-person neurology group when he opened his direct pay practice in borrowed office space. During the initial start-up phase, he maintained a full caseload with the traditional group practice. As his new practice grew, he gradually reduced his time and his former colleagues transitioned to becoming hospital employees.

Over time, Dr. Ament realized that he was seeing an increasingly complex population of headache patients. “To treat them properly, I felt I needed to explore more issues, develop more relationships with other providers of all types, and assist in coordinating their care directly,” he said.

Figure. DR. ROY C. K...

Figure. DR. ROY C. K…

He has been working full-time at the Ament Headache Center since July 2014. The majority of patients are seen for headache, and he does not participate in insurance plans. “By then, I had broken even in terms of expenses, but breaking even and earning a comparable income to an in-network provider are two different issues,” Dr. Ament admitted. But he described his move as partly strategic and predicted that changes in the insurance and technological landscape would soon create a two-tier system in the United States.

“As deductibles and co-pays continue to rise, many people will recognize that they are paying out-of-pocket for their care more often than not,” he explained. “As they do, they will learn to utilize their resources more wisely and will choose to purchase the care they need.” Dr. Ament expressed hope that by being first to market, he is positioning himself to take advantage of this trend.

Dr. Ament’s fees are transparent; new clients are charged $395 for one and one-and-a-half-hour consultations and $185 to $245 for 30 to 45-minute follow-up visits. “Clients pay in full at the time of service and are provided with a completed form to send to their insurance company for reimbursement,” said Dr. Ament, who does not participate in Medicare.

His practice also offers several incentive programs, including payment plans, discounts for community volunteerism, a $50 discount for referrals, and an occasional “barter and exchange” program; for example, several pieces of art in his office are from clients. He consulted with both an attorney and a practice management specialist prior to structuring the business and employs an Internet marketing team. He compares his overhead with that of any conventional solo practice because the savings incurred by the absence of insurance billers is offset by the additional administrative costs of running his attention-intensive practice. Dr. Ament emphasized the importance of flexibility for those considering a similar transition. “You make the best business plan that you can, and then when your expectations and reality collide, you adapt and adjust,” he advised.

SOURCE: http://journals.lww.com/neurotodayonline/Fulltext/2015/04020/IN_PRACTICE__More_Neurologists_Transition_to.5.aspx

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