It’s no secret that chiropractors are all fighting declining reimbursements and a growing portion of fees are being pushed onto the patient by the insurance payers.  In fact, according to Athena Health Payer View 2012, the weighted Provider Collection Burden increased by 7 percent from 2010 – 2011.  In other words, your patients are being forced to foot more of the bill, which then increases the burden on you to collect it.

Because these moves are precisely calculated by insurance companies, chiropractors tend to feel powerless at times. As a result, we often sigh and continue to take the beating. And while reality dictates that we cannot win every battle, we can minimize the damage done to us by insurance payers by learning to recognize which ones will give you the biggest headaches ahead of time.  Certainly, you could easily say that no insurance plan is ideal, but with a little bit of homework, you’ll see that certain plans spell more bad news than others.  Here’s how to spot the rotten apples:

Examine Contracts Carefully!

Although it is seldom done, chiropractors can often smell the El-Stinko insurance plan by simply reading the fine print in the contract. In fact, you are making a major mistake by simply signing contracts – even renewals — without even bothering to read them. This may sound like common sense but unfortunately, from the number of chiropractors who actually do this – the good sense to read the contract first is not all that common.

Best Practices:

  • If the insurance doesn’t let you see the whole contract up front including the fee schedule that should be a big fat red flag telling you to prepare to be abused down the line.
  • Similarly, if you are asked to pay a $150 application to join the network, but haven’t yet seen the fee schedule and what the network restrictions are — put your checkbook away.
  • If you haven’t heard of the insurance that is asking you to join, ask to see a list of major employers or groups they have in their network (in addition to the fee schedule).  Unfortunately, over the last several years we have seen a rise in “mystery networks” that exist on paper but have no actual patients or employer groups.  The only thing these networks do (often with PI cases) is get you to agree to discount your fee.  Then, when you do get a good paying PI case, you suddenly discover that, due to your participation in the XYZ Ghost Network, your full fees are reduced to their “contracted rate.”

Compare the Fee Schedule

If you’re reading the contract and willing to further investigate the plan, the next step is to evaluate how much it will pay you. Look at the plan’s fee schedule and compare it to your current payer sources. Is the reimbursement higher? Lower? About the same? If the rates are significantly lower, you may want to toss the plan. But how low is too low?

Best Practices:

A basic benchmarking step to evaluate a fee schedule is to compare it to Medicare (which we know does not pay profitably) and to one of your best paying insurance plans. Here’s why: we already know that Medicare’s fee schedule for chiropractors is pitiful and for many of you, not even profitable. So why would anyone want to sign a contract that rates lower than that? On the other hand, if the fees compare to one of your better payers, it may not be a bad plan.

Compare Coverage

Sometimes looking at the fee schedule will not reveal enough.  You need to look closely at the coverage that the plan offers so you don’t make a superficial mistake.

Best Practices

Do the math!  For example, Let’s say the Plan Awill give you six visits that would reimburse for average services performed at $50 per visit.  You can anticipate a total reimbursement of $300 from the plan (plus whatever patient responsibility is).  Plan B covers 8 visits but will only reimburse $30 per visit for a total anticipated reimbursement of $240.  Obviously, one looks a little better on the surface, but some digging reveals that’s not necessarily the case.

Factor in your Visit Average

You may be satisfied with the rates you see in the plan’s fee schedule, but don’t accept them until you’ve seen how many visits the plan offers and compare that to how many visits your patients average.

For example, if the plan covers 12 visits and most of your patients average about 6 visits, the plan may be insufficient. On the other hand, if you normally see a patient 24 visits and the plan covers six, you are going to have the bulk of your care non-reimbursed. So you need to be aware of what kinds of patients you normally treat and how quickly you treat and discharge them.

Don’t Be Afraid to Drop an Insurance

Many new chiropractors opt to sign low-paying contracts and become providers for lousy networks because they feel some cash is better than no cash while the practice grows.

However, be sure that this move doesn’t continue on indefinitely. Make a note to revisit the contract after you’ve established yourself, because in the long term, a contract like that doesn’t make a lot of sense, and you may want to let that plan go.

Best Practices

Each year you should review your contracts and your 1099’s from payers.  Weigh the facts and make a good business decision – not an emotional one – on whether to continue doing business with that payer.  For more strategies on this, see my previous article on “How to Drop An Insurance Company.”