I frequently get asked the question “should I take XYZ insurance?” by new chiropractors or veterans that are contemplating a change. While it’s difficult to give a stock answer for everyone, everywhere there are definitely some considerations you need to make with respect to insurance participation — regardless of whether you are thinking of getting in or getting out.

These things need to be heavily evaluated because they are often ignored by chiropractors who pay the price after they learn in the “school of hard knocks.”  To help you make the best decisions regarding insurance participation, here are a few things you absolutely need to realize and calculate (that the payers fail to tell you):

1. The Percentage of Discount May Be Huge:  Most chiropractors seem to understand that there is an exchange going on when accepting insurance.  And part of that exchange is that you will take a discount on your fees.  The thing few chiropractors evaluate is exactly HOW MUCH that discount is.  In fact, some DC’s never even look at the fee schedule before agreeing to participate (or renew) with a payer. In this respect, all payers are not created equal so it is worth the time to examine the fee schedule of ALL payers you plan to do business with.

2. Our Discount May Not Equal Increased Access. The other part of the exchange with insurance is the “access” to their patient list.  In other words, you are trading a discount in your services for their ability to deliver you new patients.  So the next logical question is: how many new patients are they delivering you?  And consequently, is that number worth the discount?  In other words, if a payer never brings you patients, then they may not be keeping their end of the bargain because you are definitely giving them a discount – but they may not be producing any new patients for you!

3. Discounts Can Be Deadly to Your Bottom Line:  With the average PPO discount being 25-35%, you simply can’t afford to ignore how much a payer’s fee schedule is because you can’t make it up elsewhere.  In other words, if all payers cut 25% of your revenues, in a $400,000 practice, effectively you lose $100,000 and only collect $300,000.  There is no way to cut costs   

4.  Audits Can Erode Your Profits Even More:  By participating as an in-network provider, you      are also opening yourself up to the possibility of being audited via mail or even in person.  While this is not a guarantee, any audit has potential to erode  your profits significantly, especially if extrapolation is used to generate big number paybacks.

5.   Your Contract Can Be Revised.  Unfortunately, payer contracts can be (and frequently are) revised, along with medical and reimbursement policies as well.  All this affects your ability to be paid and these revisions rarely benefit you as a chiropractor.

6.  You May or May Not Need Us. One of the most difficult aspects of insurance participation is that it is an extremely localized challenge that just happens to affect chiropractors everywhere.  By this, every market is different with certain dominant payers.  In fact, the government has pointed out that most markets are dominated by one or two payers who are big in that region.  This varies from state to state to the degree that one cannot easily evaluate the “Should I participate with ABC insurance?” question without studying the local market.  In this respect, the better questions are: who are the 2 biggest payers in my area?  Or, who are the biggest employers in my area — and what insurance do they carry for their employees?  Here, the 80/20 certainly applies as 80% of a market is going to be made up of one or two insurance payers, with literally dozens of payers comprising the remaining 20%.  Obviously, then you want to make sure that you are playing with the “giants” in your market and then carefully evaluate the rest. 

Exceptions to Consider

There are several exceptions for you to consider in evaluating your payer mix:

Huge HMO — In certain markets the dominant payer is a lousy HMO — be very careful here. Even though they are big, their discounts may be so steep they are still not worth playing with.

Medicare — obviously you can’t do much about your Medicare participation as chiropractors cannot legally opt out of Medicare (despite many creative attempts to try).  Yes, you can refuse Medicare patients.  And yes, you can charge them for all the services Medicare does not cover (provided you play by their rules).  But the bottom line is that they are going to be a factor in your payer mix.  You just need to strategically design how you will handle Medicare patients to make them an asset and not a liability.

PI Patients — since you don’t have a contract with PI payers, they are a different animal.  On the good side, their fee schedules tend to be a bit higher.  On the down side, they can be a bit arbitrary with their application and interpretation of reimbursement or CPT coding rules.  One thing you definitely do NOT want to do is sign up with ANY network that is affiliated with the auto insurance carriers.  Since there is no “list” for injured patients to consult when in a MVA, there is no advantage to participation with any network for PI. And frankly, most of these are “invisible PPO’s with no actual patients, but what they do offer is a bunch of fine print that – when you sign up – entitles them to massively discount your fees as a thank you for joining their ghost network.  Avoid these at all costs.

What to Do?  – The Next Best Step

Many chiropractors make gut level decisions regarding insurance.  They get in, get fed up and want to get out.  Others go the opposite extreme and join every payer that will let them in the network.  Still others never participate and wonder or wish that they did.  Certainly, I can understand that this is an emotional issue that can be fueled by your experience, your philosophy and (unfortunately) by your ignorance.

But before you jump (in or out), the next best step is always this: do your homework and do the math.  Use the above criteria as a starting (or ending) point to determine to play with only the best payers, who make good financial sense to do so.  The rest?  Work smarter and avoid the ones who will make you work harder for the same or less income (which is certainly not very smart)!