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HEALTH Insurance

We explain how to pay the bill when your physician opts out of insurance payments.

why doctors stop accepting insuranceRecently I encountered a gynecologist who didn't take any insurance, a dentist who didn't accept dental insurance and a dermatologist who no longer accepted my plan. Just what the heck is going on when it comes to doctors not accepting health insurance?

“Most patients have no idea this is going on. All they know is that last year they had bronchitis and saw this doctor and this year that doctor isn’t in their network anymore,” says Katherine Woodfield, a New Jersey-based insurance broker and author of “Don’t Buy That Health Insurance: Becoming an Educated Health Insurance Consumer.”

Why doctors decide to go insurance-free

To understand the insurance-free paradigm, you need to understand how health insurance pays the doctor.

Each year, doctors negotiate the price of treatment with health insurers. For example, a doctor tells the insurer that when a patient visits his office, he charges $135 for an office visit. The insurer says, “We can pay you $95.” The doctor might counter offer and ask for $120. The insurer agrees to $100.

That negotiation takes place with each insurance company for every service your doctor performs. Ultimately, the insurance companies are the ones in control. They set the rates they will pay the doctor.

When a doctor doesn’t agree to those rates he can stop accepting that insurance or go insurance-free if he feels he is not getting fair reimbursement. It doesn't help that some insurers aren't timely in sending their payments to physicians and other health care providers.

“We used to submit a claim and two or three weeks later we got reimbursed. Then it became five weeks and six weeks, and then they said they never got that claim even though it was sent electronically,” says Craig Koniver, an insurance-free primary care physician in Charleston, S.C., and author of “Connected: The New Rules of Medicine.”

“Then we got notification they needed office notes to support the visit," says Koniver, "It was little things that built up until we were spending a whole lot of time chasing down insurance reimbursements, which took away time from the patient.”

What’s more, doctors’ offices must purchase expensive software to bill insurers and hire a coding specialist to handle claims. If services are coded incorrectly, the insurer refuses to pay.

The rise of cash-only medical practices

Have this happen enough and it's easy to understand why a doctor stops accepting insurance. Nearly 7 percent of 13,575 doctors surveyed by The Physicians Foundation said they will switch to a cash-only practice over the next three years, according to the report A Survey of America's Physicians: Practice Patterns and Perspectives.

In what's often called "concierge medicine," some practices charge an annual "membership fee" for services. For instance, for $2,500 a year patients receive the king's ransom in care, often including 45- to 60-minute appointment times, on-demand phone and email access and more. Others charge a typical flat office visit fee and provide the form for patients to file their own insurance claim.

“The caveat is that it certainly isn’t for everyone,” says Koniver.  “If someone has a severe diagnosis or takes multiple medications or needs lots of office visits, they may do better with a traditional insurance-based system.” Likewise, people on a fixed income or those with very low incomes may have trouble budgeting the health expense. (See: "Pros and cons of catastrophic health insurance.")

Concierge practices were once thought to be just for the wealthy, but now that's not always the case, says Rob Dobrenski, a New York City-based psychologist and author of “Crazy: Notes on and Off the Couch.” “I do a sliding scale to make it palatable for people who can’t afford it,” he says.

An insurance-free practice can be an efficient strategy for some medical providers, but is it good for patients?

On the other hand, it can mean patients are stuck trying to find doctors that will accept their health plans or must figure out how to handle payments for services from those who don't.

Options for when your doctor rejects your health insurance

Should you want to keep seeing a favorite doctor or a highly recommended specialist who no longer accepts insurance, you can always pay for the services yourself, if you can afford to do so. Then, submit your insurance forms for reimbursement.

Just be aware that if you do this and your plan doesn't cover out-of-network care, the insurer will typically apply the reimbursement to your deductible or catastrophic cap rather than give you the cash outright. If your plan does cover expenses for services outside its network, you may be reimbursed but usually for just a portion of the entire amount.

Another way to budget for visits to a cash-only practice is to take advantage of flexible spending accounts. If you estimate your costs in advance and stash some money in an FSA, you can pay your doctor bill with tax-free money from this resource.

One more tip: if you are filing claims yourself – and even if you're not – check your paperwork to be sure you're not being "balance billed." This occurs when a provider, say a doctor, hospital or clinic, bills you for the portion the insurance company has written off when negotiating rates with the health service provider. (See: "How to appeal a health insurance claim denial – and win!")