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Converting to a Cash Practice
By Holly O’Dell

Many chiropractors say that the biggest headache in their practice is dealing with the insurance companies, which often attempt to dictate how much and the type of care they can give their patients. Combine that with the time spent on related paperwork and phone calls, and chiropractors find themselves in a frustrating situation.

The easy solution to this conundrum seems to be converting to a cash practice, but a little research into the topic will go a long way in determining whether you’re ready for such a major transition—and why you truly want to do it.

Playing the Insurance Game
Chris Cianci, D.C., has operated a cash-only practice in Easton, Md., since 1998. A coach for The Masters Circle, Cianci quickly grew weary of the limitations he felt insurance companies placed on him. “I got tired of people telling me how to take care of my patient,” he recalls. “Very often it was a clerk in an insurance building somewhere who didn’t know what the patient’s lifestyle was like or how their life was limited by their health. It also interfered with the relationship between the patient and me, because there was always another person out there interfering.”

Cianci’s situation is common for many chiropractors. For starters, many practitioners find that the insurance system is poorly designed with its priorities in the wrong places. “Insurance is an incomplete system that rewards people who are not healthy and thus, it is very opposite of health,” says Kevin Pallis, D.C., of The New Renaissance, a practice management firm in Norwood, Mass. “It has no inherent morality. Rather, it borrows its morality from the individual wielder. Insurance, by its allopathic design, is for sickness only, so it causes a large belief in sickness, only to interfere with a balanced sickness and wellness practice.”

In his 25 years in consulting with chiropractors, Bill Esteb has seen a similar trend in insurance, which he says addresses “sick care,” rather than health care. “The problems of an insurance-based practice often start with languaging,” says Esteb, owner of Patient Media, Inc., a patient education resource company for chiropractors based in Colorado. “In some circles, chiropractors can’t even use the word subluxation. The sick-care game is largely third-party reimbursement run, which means it’s medically run. Many chiropractors begin the process down the slippery slope to literally change the language to match that of the third-party medically run system.”

But when it comes to insurance, one of the most crucial concerns of the chiropractor is that, as Cianci experienced, the excessive time spent on paperwork and the fight to get paid, takes valuable time away from patients.

“The insurer has become the doctor, the determiner of how much care you should provide and for what condition,” says Shelley Simon, D.C., owner of Beyond Practice Management in Portland, Ore. “[Insurance] takes a lot of paperwork and more staff, and patients tend to be more hooked into what insurance will allow versus what they’re actually experiencing in their health.”

“Many people grow tired of the game of sacrificing their integrity for money,” Pallis adds. “Their lives get more complicated, and their practice gets less fun. This spells burnout in any language.” Despite the criticisms, insurance can provide some positive opportunities for your practice. “Everyone is strapped in today’s economy,” Simon says. “If people have insurance, they want to use it. If you have an insurance-based practice, you just opened your doors to people who have insurance.”

Transitioning to Cash
For those chiropractors who find the insurance experience more negative than positive, the logical solution is to switch to a cash-only practice. However, it takes more than a snap of the finger and idly waiting for cash patients to flood your office.

When Cianci transitioned to his cash practice, he put a systematic process into place. Through The Masters Circle, he similarly advises chiropractors who want to convert to a cash practice. “Check your insurance plans to see what you have to do to get out of them. Set a date as to when you want to break those ties,” he says. “You want to immediately educate patients on the benefits of being a cash-only practice. It’s all about value.”

The best place to start the transition process is to perform an audit of your practice, Simon says. “Find out what percentage of your practice is insurance, and know how that is relative to last year,” she advises. “I start asking questions of my clients: What do they notice in differences relative to the outcome with cash patients? What kinds of results do they get? Are these patients the ideal client? Do your cash patients refer as many as insurance patients? Being able to assess where you’re at and where the income is coming from gives you a sense of where you’re starting.”

A strong financial backbone is one of the most crucial elements of starting a cash-only practice. “People who have very high overhead or debt are dependent on high income levels to be generated in order to support that overhead,” Simon says. “If they do not have a cushion or ways of constraining their lifestyles, you generate a lot of stress.”

Esteb agrees. “Your own financial house should be in order. It means that if you’re living on next month’s adjustments, you’re not ready to go to a cash practice. You need to have some resources stored up—a couple months’ overhead in the bank—because when you go to a self-pay practice, your income may drop temporarily but then returns, stronger and more predictable.”

Another key element is to thoroughly understand that the most successful cash practices happen when long-term plans are implemented and followed. “I know a lot of doctors who have made attempts to go to cash and have horrible experiences, only to end up reaccepting insurance,” Simon says. “There has to be a long-term commitment, along with the analysis of your overhead.”

It’s also important for chiropractors to know that your cash practice doesn’t happen overnight. “The key issue here is that any transition should happen gradually,” Esteb adds. “Choose one HMO at a time from which to extricate yourself. You want to do it gradually. Don’t put your practice into shock. You want a cash practice, not a crash practice.”

Additionally, what works for your friend may not work for you. “I think the pros and cons of a cash practice depend upon the individual chiropractor,” Simon says. “I talk to different chiropractors about their stage of practice, their location, and who they are as a chiropractor. There is no single answer for chiropractors; the answer is relative.”

Preparing the Mind
If you feel that you’ve met all the business and financial criteria related to a cash-practice transition, you probably think you’re ready. But do you have the appropriate frame of mind to operate a cash practice?

“The real transition is your mindset. You have to be a very strong person with integrity to successfully run a cash practice,” Pallis says. “Many DCs want to have a cash practice to free themselves of the hassle of insurance, but they do not take into consideration what’s necessary to be successful in this arena. For example, do you constantly improve your skills at seminars, or do you only go for license renewal? Do you have a life coach? What is your philosophy of symptomatic and non-symptomatic care? Our experience is that you must be unique and rock solid in your belief of chiropractic for people to pay personally.”

For those who do successfully run a cash practice, the benefits are numerous. “The pros of a cash practice include keeping your integrity intact, having much less paperwork, a smaller staff, reduced overhead, and less stress dealing with insurance companies and their ever-changing capricious regulations,” Pallis says.

Furthermore, cash-based chiropractors report that they end up with not only happier patients, but also happier practices. “It has allowed me to practice chiropractic the way it should be practiced—building a great bond with people and really influencing their quality of life,” Cianci says. “I’m talking to patients about their lifestyles. You’re giving them a better life, better activity, better relationships and more independence, rather than just reporting on what their sciatica is like. These are the things that people value tremendously.”

Will I Still Be Audited?
Freedom from insurance does not mean freedom from potential health care audits. “With national- and state-run programs like Medicare, worker’s compensation and personal injury, there can still be audits, regardless if you are a cash practitioner,” says Kevin Pallis, D.C., of The New Renaissance. “Logic would lead you to believe, however, that audits are aimed at some of the bigger fish who utilize insurance reimbursement on a more frequent basis. When you have a high degree of integrity, you don’t have to worry about audits.”

And don’t think you’ll be free of paperwork altogether, either. A cash practice does not eliminate the responsibility of diagnosing— as required by your state license laws—the possibility of malpractice and providing patients with super bills. Although Chris Cianci, D.C., eliminated a day’s worth of paperwork after jettisoning his insurance, that didn’t mean the need for thorough notes went away. “You still want to keep clear, concise and accurate records, but you don’t have to justify whether you can have six more visits for a patient,” he says. “If someone wants the record, there’s no problem.”