The Business of Private Practice: Billing, Insurance & Revenue Cycle Management

You know a lot of physicians you know, don't even know what's possible out there in the careers. We've really lost control of our careers so much that we really don't understand the type of things and the kind of opportunities are out there for people you know who go through med school, go through residency, go through fellowship, what all can you do? Like, you know, most people just think there's one pathway and you kinda go and stay and get employed.

And that's why I feel like the last episode I got a lot of feedback from a lot of people. Usually I feel like no one watches our episodes and you know, but but This one I got a lot more feedback and they were Really. like, Wow, this is you know, starting your own practice. You know, people got all excited and a lot of physicians are are kinda looking into it like, hey, you know, that's possible, that's very interesting.

And I've I had a lot of people reach out to me, which who I know that are employed by large hospitals or academic centers and you know, they're like, you know, that kinda opened our eyes and kinda you know, inspired us a little bit.

And you know, for me, I mean the biggest thing that I've been advocating for for the past like four or five years is physicians independence so if we could be kind of that you know kind of propagate that view a little bit more or promote that view a little bit of physician independence I I wouldn't be you know I couldn't be any prouder of that. Yeah, that would be awesome.

I mean, I I I think, you know, we're two doctors, we talk about medicine topics and I think it's natural that a lot of our audience are, you know, whether trainees or people in practice, I think it's naturally interesting to hear that within your field there's a lot of different opportunities to have different types of careers.

And like I'm in the midst of a career change right now, transitioning from an academic practice in the largest medical center in the world to a solo just to me, private practice is a big change. Yeah. I think it's kinda cool to talk about it and be open about the process and what's working well and what isn't and what's a challenge for me. And I think it's also really cool that you've already done this, you know, four-ish years ago.

and I I the other thing I think is really interesting is talking with with the residents right now, the trainees who, you know, I've known for a while now being at Baylor and They're very interested in why I made this decision and what the process is like in actually starting a practice. You know, all of the pieces so called behind the scenes in how you set it up so that you can efficiently and smoothly see patients in clinic and take care of them.

And I think like if we talk about that a little more detail about that, because I want people to know that the process is manageable, it's doable, it is a lot of work, but you just have to do things stepwise. And you the first part is educating yourself. That was the biggest thing for me is educating myself in what it takes to build something and then you just go ahead and do it. And so Yeah. I think it would be interesting to talk about in particular like three different things today.

The first thing is billing and reimbursement and how that is different when you are employed versus when you're by yourself and you are the one doing the billing rather than your institution, your entity, your employer doing it on your behalf, taking a haircut and giving you some back. So I think the billing piece is really interesting. Insurance and the credentialing aspect, what does credentialing mean?

How do you get on these so-called commercial insurance payer plans or don't, if some refuse, and how that relationship works for you to get reimbursed, for you to even get patients in to see you, the in-network, out of network stuff. And then the last thing is RCM, revenue cycle management. What is that? Like that's a term, it's a buzzword almost that's thrown around. But like what is the actual revenue cycle and how do you manage it?

So I I think it'd be interesting, Humayun, to kind of distill those down a little bit for for people that are Like you said, potentially interested in making the leap and going going in their own private practice.

Yeah, I mean your revenue cycle management, a lot of people that go to medical school don't know much about it but You know, a lot of the foreign countries and especially like, you know, if you go to South Asia or Philippines, you know, India, Pakistan, Philippines and places like that, revenue cycle management is a big the big deal there 'cause there's a lot of companies that are offshore, right? Offshore companies that are that are doing a lot of the revenue cycle management in in the US.

A lot of physicians over time or other institutions have outsourced revenue cycle management. And I constantly started when I started my practice, I started getting Like when I just announced that I'm you know, I'm starting a practice on social media and things like that, just got bombarded with messages of, you know, RCM. I run RCM, I run RCM and I used to be like, What is what is this RCM. Like what is what do you mean RCM Yeah. What is what do you mean revenue cycle management?

'Cause I was still on fellowship and you know, when you're in in the academic setting going through fellowship residency, I mean there's no one. No one teaches you any of this. No one teaches you what what revenue cycle management, what is billing, what is what it means to like have the right medical codes and the the Yeah, the whole like benefits verification, prior auth, recoupments, all that stuff. What is a process and and and a a a lot of patients don't even understand what this is, right?

So I know we've done a whole whole episode on insurances and billing, but you know, this is kinda like on the business side of things. You know, the first question I used to get when I started, like, how many RVUs is echo in your practice? And I you know, 'cause I never lived in that world and you know, I never w worked in an employed hospital employed model or a big system employed model.

So they used to ask me what is j how many RVUs is an echo and I used to get some I was like, what do you mean the RVUs? Like, you know, I just I just do something and I get paid cash for it. That's that's how that's how private practice works. But that's a very foreign concept to a lot of physicians out there where you do a service, you bill for it to an insurance, the insurance pays you money instead of assigning you an RVU.

So I know you've worked in that model and what RVU is, so maybe you can kind of Yeah. clarify the distinction for a lot of people what it is like in private practice versus in employed medicine. Yeah, I mean, you know, I literally had this exact conversation today with some of the residents that were at the hospital and they were asking me about this and you know, one of them asked, like, so now that you're going into private practice, like what dollar per RVU are you gonna get?

That's the sort of the conversation. And I think it's just very important to frame this the right way, that basically compensation, no matter what career path you're in, you have to know the comp structure for your industry, whether you're employed or you're going out on your own. And in medicine, it it's either you are employed by a hospital or an academic center or something like that, and they pay you based off of what's called an RVU.

Every surgery, every procedure gets assigned a code, a CPT code. And each CPT code has a certain number of RVUs attached to it. So let's just use round numbers for simplicity. A carpal tunnel release in the wrist. Very common surgery. It has a set CPT code, a single code, and it's assigned a value, like five RVUs.

Okay, that is the value for the work, the clinic side, the follow-up of the patient, the surgery itself, the risk you take, all of the stuff they somehow try to quantify into just a single number, which itself is a ridiculous premise, but that's just how it's done. And then Mm-hmm. the employer, and every employer is different, even in in Houston, in the same city, on the same street in the Texas Medical Center. We have Baylor, we have UT Houston, we have Methodist, we've got HCA Hospitals, St.

Joe's. It would write there. Each hospital pays their surgeon for that exact same CPT code, the same five RVUs, a different dollar amount per RVU. So hypothetically, let's say again, you do that surgery, which gets you five RVU values, and you get paid fifty dollars an RVU. Well, you just got what $250 at $50 an RVU. so that's what you would get paid by your employer for doing a carpal tunnel release. Conversely, if you got $100 in RVU, then you would make $500.

So that is the RVU-based compensation model where your unit of work is assigned a dollar value per unit of work. And that is very arbitrarily dictated by whoever is your employer. And obviously they do it that way because they are already taking a haircut off the top, and the amount they give you is after they have recouped some expenses, overhead, whatever have you. That is the employed compensation side. And so on that side, everyone is just chasing RVUs.

Whether it is doing more surgery, seeing more patients, to get more RVUs, get more billable dollar per RVUs coming in to hit your targets. Because each surgeon and each doctor really, but everyone in an employed model has a target, an annual target that your department wants you to hit whatever, 5,000 RVUs for the year, 10,000 RVUs for the year, and is different per specialty. based on average RVU production across that specialty annually in the United States.

So like for orthopedic surgery, it might be 10,000 RVUs. So you are expected to generate 10,000 RVUs from all of the clinic patients you see and the surgeries you do in a given year. If you underperform, well your salary goes down. If you overperform you get potentially a bonus. But that is how the compensation structure is created.

And if you think about it, If you are basically only generating income, because there's no base salary in a lot of models, it's just if you do work, you get paid based off RVUs. If you don't do anything, you get zero dollars. You have the same exact incentives as being in private practice. Do more, you make more. Do less, you make less. The difference, like Humayun, what you were saying, in private practice is it's based off of billing and collections. There's no such thing as RVU.

And so when we were talking, the residents were asking me. like how much are you gonna get paid per RVU now that you're in private practice? And I was like, I have no idea because no one is giving me a dollar per RVU amount. Like, that's not how it works. There's no RVUs anymore. All it is is I enter into a contract with insurance companies, and there's a set dollar amount that they're gonna pay me for certain procedures.

It's not indexed to RVUs, there's no change in how many dollars per RVU for this versus this. It's just a negotiated contract. Different surgeries get different reimbursements. And so I will get whatever, several hundred bucks for a carpal tunnel. And I just know that up front. It's not a RVU number that I'm chasing. and so that's how it's different. And that negotiation is one of the other things I want to talk about a little later, Humayun, the insurance side.

But it's a negotiation because you have a different contract with each insurance company. Like what I am gonna get paid for shoulder replacement or what you get paid for an echo interpretation is different with UnitedHealthcare versus Aetna versus Cigna versus Blue Cross versus Medicare because each of those is a different contract. They're independent of each other. And so it's not a single set RVU.

It it's very different and it depends on your negotiation and your longevity with an insurance company and then renegotiations after the contracts expire every couple of years. Yeah, I mean pretty much RVU is a arbitrary point system that employers have created to rank or judge physicians and to allocate money that they make from their from their work to allocate money to them.

So, you know, you did the surgery and use the OR, that we assigned that five RVUs and you'll get paid that much and the more you do use that OR and more you use that surgery, this is how many RVUs you'll accumulate. That's that's in an employed model. So RVUs is specific to employed models and not in an ownership model. when you're in an ownership model, you you negotiate different rates with insurances and what an insurance pays for a certain CPT code or E/M code is what your compensation is.

so for example a Medicare may pay you know $200 for an echocardiogram and every time I do an echocardiogram for Medicare I'll expect to get paid $200 versus a commercial insurance may pay $600 for an echocardiogram. So every time I do an echocardiogram for patient commercial insurance, I know that's what I'm getting paid. The other thing to consider is, you know, in a in a hospital model or in a employee model, all you're kind of getting is that your professional service fee.

Whatever professional service you provide, you get the money for that. in a private practice or ownership model, you also have to you also gain advantage of getting the facility fee where you own the facility, the imaging is being done in the facility you're in or procedure that you're doing, maybe in the office. Within the facility that you're doing, so you're also billing for the facility being used, right?

Where in hospitals, as doctors employed models, you're not billing for that, you're not billing for the facility fee or the imaging fee, you're just providing a professional service, you don't own anything.

so there's a big difference, and a big difference in what RVU means and what compensation means in in the private practice model, and that's why you know, for every physician that's getting RVU that's Like you know, and I don't have the exact numbers and don't quote me on this, but you may be doing something that's five RVUs, and maybe that accounts to five hundred dollars, but most likely the hospital or the the entity that owns or employs you is probably making 10x that or 9x4 that right 10x that and they're giving you way more.

Yeah, yeah, for sure. Yeah. a small chunk small chunk of that pie and that's your professional fee, whereas in the ownership model, you are getting the whole pie, and then you're paying the expenses that allowed you to get that pie. Yeah, I'd like basically the institution just decides how much haircut they're gonna take from you from the professional fees and then you get whatever is left over. So they're taking whatever they determine is overhead, institutional profits, whatever.

And so and I mean this is life. Anytime you work for someone and someone else pays you or gives you your paycheck, they're making more money off your work than you made on your work. I mean that's just how it works. And so Like what you're talking about with the facility fees, for example.

I mean, all of that, you can classify all that's a facility fees, ancillary revenue income, which can be anything from imaging, the actual facility itself, durable medical equipment like splints, braces, things like that, injectables, all of that stuff as ancillary income versus just the billable charges for seeing a patient in clinic and doing procedures. That is what is professional fees.

And the professional fees, like you're saying, I mean, are a drop in the bucket in comparison to some of the bigger facility side fees. I mean, it and again, those facility fees are negotiated on a case by case basis with insurance companies. And so if you have better negotiation or you have more collective bargaining, like you're part of a huge system, for example, that system is going to have better rates in their own reimbursement for the facility side than a smaller institution.

And you know, another like dirty secret is that a lot of these massive big employers that have, you know, multiple hospitals, chains, and big systems, you know, they have thousands of employees, they actually, when they enter insurance negotiations, they will purposely devalue their own professional fee side and overvalue the facility fee side because the facility fee is such a bigger chunk.

And that way they actually are able to keep paying their doctors less because the facility fee generates less. And so they are taking a haircut already of a smaller amount and then giving you whatever's left over. But on the flip side, they're making a huge amount. And that's the negotiation they do with insurance that, hey, give us higher rates and facility fees. We'll let you drop our pro fees. We won't care about that. And now that justifies them paying their doctors less.

But they still make much more as an entity from the massive facility fee, right? I mean, this is why it's just like the more you learn about this process, for one, it's infuriating. Two, it seems unfair that like you're the ones doing the work, taking the responsibility, taking the liability, you're the face of the practice, you're the ones the patients are either happy at or mad at. I mean, it all comes down to you, but you don't even dictate your own future and your own outcome.

I mean, there's so many reasons why this the more you learn about this process, it's frustrating. Yeah. And I just, you know, wanted to do it do it for myself. Yeah. I mean th the th the way to think about this is also this, right? You know, when you're an employee your entity that employs you gets the first pay. Yeah, that gets the first revenue from whatever it's done. And then they're paying you. When you're self-employed, you're getting the full compensation for it.

And then you decide how efficiently you w you want to use your resources and how much you wanna pay the services and employees and and and the cost of providing the service. And y that's where your business saviness comes in and how you how you use your resources. To be able to provide the service and maybe keep a larger chunk of that pie and you can decide. Whereas in a bigger system, it's very inefficient the way they're doing it.

I mean, you know, something that takes me maybe a small amount of cost, maybe one person doing multiple echoes and within you know in in in one hour, probably in a hospital setting, it's taking it's much more inefficient and it's costing it much more because there's not anyone that's really has a stake in it, right?

There's there the big hospital managers are sitting in in one office suite and they're making policies for one department and there's a echo tech there that's who doesn't even know who the who their boss is and who's overseeing them and they're doing the echoes on their pace.

Whereas in a private practice model I can work with my echo tech, hey this is how many echoes we need to do, the patients are gonna be lined up within this time and I can use those resources efficiently to make sure the initial pie that I get, I I then allocate the amount of money that I need to pay my echo tech, I need to pay the the supplies that is used to do an echocardiogram or supplies that's used to do a nuclear imaging test and then I decide or allocate how much money in the end my business ends up getting versus an employee model the hospital decides and whatever resources they use to do that echo is not in your control and a lot of times it be it's be it's ends up being more inefficient you get less studies done in a in a day less procedures done in a day versus in the private practice model you can do a lot more because you're much more efficient as one person as a smaller entity that's more flexible.

Yeah, and you know, it's like the idea that if your ability to see patients, treat patients and do your job and also it affects your bottom line, your ultimate compensation by doing more work, if you are no longer the rate limiting step, if you're reliant on other people, other factors, the institution, slow turnover, a a lot of time waiting in between your procedures, your surgeries, or like you don't have control over Who you're hiring in the clinic side, how many X-ray techs are present, so that the churn isn't happening.

You can't see that many more patients. You're just kind of sitting around waiting. Anytime you're sitting around waiting, and other factors of the rate limiting step, you automatically have a roadblock forced upon you in being busier and efficient. And I mean that irks me a lot. Yeah. It irks a lot of people, but a lot of people will just, you know, huff and puff and complain. I think in life, if something is a habitual complaint. Do something to change it. And Yeah.

you know, that's why I think what you keep talking about, ownership, i is huge because ownership is not just this like mindset I must control everything. I think it's the fact that you can create an environment around you that you can make efficient and align incentives, incentivize people around you, and and then the whole team wins. You know, it's kinda like a ship in the ocean. Like everyone has to work together for it to succeed. Like that it's a voyage, it's a journey.

And I I think that aspect of it is really cool. And not just the whole team wins, the patient wins, right? Patients are part of the team. Yeah. The patients win because they're getting efficient service. It's costing much less because when you go to a hospital, the hospitals upcharge the insurance. the rates at the hospital are much higher.

so you're going to a physician that's owned that's employed by a hospital, you're going there, you're paying tons of more for being in an inefficient system where things are slow, you're waiting much longer, and maybe you're not getting the care you need or the personalized care you need. Some some places may you may be getting it but majority of the places you're not. Whereas when you come to a privately owned practice, you have a personal relationship. The doctor has control.

The doctor decides how the staff treats you. The doctor decides how efficient the service is for you and if the patient who's facing you, right? When I when you know when the when the patients you know who who who do the patients complain to, right?

When when you're seeing a patient, the main contact the patient has is the physician and if it and then patients have a bad experience the person they complain to is the physician right now when you go to a clinic where the physician has no control you can complain all you want the physician can't do anything they can't make that change right they can't make that change they can't go to the staff and be like this is what needs to be done this is how we're gonna do it now and make that change so the patient experience gets better in a in a place where the physician has ownership the patient complains to me and the next moment I'm messaging my staff hey this is make sure that This doesn't happen again.

This patient complained about this this aspect of our service. Let's see how we can do better. Those are things I'm bringing up on the day-to-day in meetings. Whereas in a lot of hospital settings, patient physicians can go in, complain about the patient experience. This is what's happening to the patient. This is what's inefficient, but nothing will get done because it's not in your control. Some manager, some admin is looking at it the bottom line.

They're not concerned as much about the patient experience because they're not face-to-face with the patient. So they're not as incentivized to make that change. They're not feeling the ire of the patient. Right. So Right. it makes a huge difference when physician owns it and they're there to listen to the complaints and make the changes themselves. Dude, I couldn't agree more. I mean, I I think it's that that's everything. I mean that that is the patient experience, right?

If other people control you know, the way that your practice runs, it's not even really your practice. It's only your practice, but kind of. and so I I think you're spot on. You know, the the next thing I I want to talk about, just so we kind of stay on track, you know, we kind of divulged a little bit into like the RVU versus, you know, an actual collections-based compensation. the difference between employed and pr your private practice model.

But the other aspect of that kind of goes hand in hand with that is insurance credentialing and contracting, which is a huge factor. It's a huge factor in the ability to see patients. It's a huge factor in the ability to get paid for your services. and it's an added factor in the need for RCM services, which will be the third thing we talk about. But I I want to talk in detail a little bit about this, Humayun is like What is insurance credentialing slash contracting?

Why does a doctor not just open up a clinic and open doors, start seeing people? Why does insurance have to be involved? Like what is that process? Why is it there? And how does a doctor navigate that? Yeah. I mean that's why, you know, planning to start a practice is almost a f four to six month process because yeah, I Or minimum. Yeah. It's so long. mean, you know, once you from when from the moment you start the moment you start that hey, the moment you plan you want to start a practice.

The first thing you wanna do is, you know, we've talked about get a location, you have to get liability insurance, and have an address and phone number. And then you kinda start having Just to and I I'm gonna interrupt you for one sec because this part is so annoying that it bears repeating. There's so many things that you have to do up front at the same time that are all reliant on each other before you can even move forward. Like Yeah. Yeah.

you need a set office location, you need an office phone number, you need an office fax number, and like you said, you need liability insurance, and all of those things kind of depend on each other and you can't even move forward with anything in the process. with insurance until you have all of those. So you've gotta have all that stuff ready to go. And it's not easy to do.

I mean, gosh, you're gonna start paying rent on a place with the lease and you're gonna have to manage phone numbers and fax numbers and stuff, and your liability if you're currently with a group or something, now you're concurrently paying for s but you just gotta do it. And that's when you start that insurance process. So go ahead.

I just wanted to emphasize Yeah, I mean so once you get those things out of the way, the first initial steps of getting liability insurance, a location, a phone number, a fax number, then you have to kind of s you know, register at a few of these websites which is like you know, CMS and NPPES, and and and you have to get an NPI number and a group NPI number. Right? And then you apply to Yeah. Which is different than your own NPI r so like every doctor when you graduate you get an NPI number.

That's just like your doctor identification number. But your practice has to have its own. Your practice has a unique NPI number and that matters for everything. Yeah, you don't do it under your individual NPI. You when you when you do procedure at a hospital, you you're you're doing it with your NPI, but in your facility, in your group, everything that's being done is billed under your group NPI. And then you have to apply for credential. The first thing you have to do is apply for Medicare.

And until Medicare is approved, you cannot do anything. Yeah. Right. I mean Medicare is the first thing. So it takes Medicare is honestly the fastest to get cre you for you to get credentials. So it takes up to two months for you to get credential with Medicare. two to three months I believe. Yeah, you know su like mine actually was even quick. I think mine was like like just a a shade over a month.

I mean it was less 'Cause you were already working 'cause you're already working, but if you're than forty five days. So I Yeah, yeah. starting from scratch so if you're already had billed under Medicare before under your NPI, it it's much faster. So you'll get transferred really fast. But if you're starting from scratch and it's the first time you're gonna go into practice, getting that first Medicare and take it take up to two months along with Medicaid.

and that's the first thing you do and once you get those then you can apply for a lot of the other plans which takes up to four to six months. So even like, you know, I started my practice four years ago in like so I started the process it created the entity in June and by the time I opened my doors it was sorry I started my entity in January and by the time I opened my doors it was July first but the first month was a wash because I didn't have any credential plans or anything like that.

So I was just writing off and just seeing Yeah, you were just writing off every patient you saw. Yeah. A whatever I could. And then by the time I got lot of community service. Yeah, yeah, literally free cardiology clinic charity. by the time I got all the Right. Just real quick, just to to mention that, if you're not on the insurance plans, meaning you're not in the insurance network, the insurance companies have no obligation to pay you.

So that's why Humayun and I are kind of joking about this, but right, like you see a patient, either the patient is gonna pay fully or they're not, right? But the insurance is not gonna pay you. So if you don't collect from the patient or the patient doesn't have the ability to pay, or they s go on a payment plan and then they never pay you. That's why I'm kind of joking, but kinda not, that it's a write-off.

I mean you're just you're not gonna get that copay, you're not gonna get that reimbursement. There's nothing. You just you've seen you've given the service and you're just out of luck. Yeah. And even for a while after starting pri I didn't have a lot of the major plans, right?

So it it they slowly trickle in and it would be within the first month like, now I have this plan or you know two months I'd get a notification that I just got a credential with Community Health Choice or Blue Cross Blue Shield and finally I have Aetna now. So that that's kinda initially exciting once you get a new plan, you're like, okay, I can Yeah. see more patients now and I can you know, so you s those pan plans slowly trickle in, Right.

but y you right away you can start seeing Medicare patients. So the first a few patients I saw were all Medicare and I was telling everyone, hey, just send all the Medicare patients you can and I'll see them. so Medicare happens right away but it takes a while for your other plans to c come in. But then I started finding out about these other things you can do, right? You there's a bunch of different physician There's certain different names for it, right?

But they're they're kind of a group of many different physician practices that have joined in and negotiated contracts. So when you go in and you apply for different insurance contract, you can do it as a solo physician and go directly to the plan. And you can directly go to a plan and say, Hey, I I want to be on your network, and they'll say, Okay, for every certain certain CPT code that you do, we'll pay you this much money. And you don't have much negotiating.

power as a solo provider because they don't they don't have any obligation to put you on their insurance plan. You're just like a little fish in the pond where you're going in and trying to be on their insurance.

You know, they have many other physicians in your specialty, unless you're a very rare specialty and maybe you can get a better rate, but you're a very you're a l as a cardiologist, you're one of many cardiologists in the plan, so they don't have any incentive to give you good rates and they they would rather save money and pay you less Yeah, I think, you know, if you live in a big city, that's pretty much the case with every specialty.

You know, there's not a big city in the United States that has a dearth of a special like we're in Houston. I mean, dude, every specialty here, the damn medical center is here, the biggest med center in the world. You know, so I I think what you're saying applies to pretty much everyone in a big city that you're not special no matter how awesome you think you are, and maybe you actually are. The insurance company doesn't care about that.

The insurance company just says, Well We have forty eight other cardiologists in a two square mile radius, so you ain't gonna get any special rates. Yeah. Yeah, and then you know, so there there are out different organizations like IPAs, like, you know, independent physician associations and th Yeah. you know, that the combine the resources and then negotiate a rate.

So you can apply to be the part of those organizations and if you get in and once you get in then you open up to a lot of better contracts out there. So a lot of physicians will they are out there. Yeah, let me let me talk about that real quick for a sec, because I I'm just like literally going through this process right Yeah. now. some of the insurance plans are not gonna be part of these IPAs. Like some of the more rare or more like regionally based insurance plans.

But these IPAs, the independent physician associations, I mean it's nothing but collective bargaining, right? A bunch of independent docs. And some of these IPAs have like five, six thousand doctors. as part of the so-called IPA. So you negotiate collectively as a unit. and you know the IPA has its own board and everyone that's elected, but you negotiate as a unit with UnitedHealthcare, with Aetna, with Blue Cross, and you have a lot more say.

And that way you can get better professional fee reimbursement for the different CPT codes. And this is why I I was really harping on this earlier that the RVUs mean nothing because the same CPT codes are going to get you very different rates. with different insurance plans and there's even like a game to play if you try to negotiate with insurance on your own that hey, you know, these like ten codes are like, you know, seventy percent of my practice.

So I want you to up these codes, the reimbursement, and then these codes are a lot less common. You downgrade those. And so you kind of play with the amount they would pay you for different professional services. I mean that's just like in in the negotiation with insurance. So that's why the even within the same insurance company, there's not a set amount you get for everything. It's very variable from one doctor to another and how much you want to negotiate.

And these IPAs basically like you're saying Humayun, they kind of take a lot of that one on one need of time and negotiation away because they just do it as a unit. And it does allow you to get better rates because of collective bargaining. Yeah.

So in Houston there's a lot of good, you know, plans like that where and it may be different city by city where that's why private practice is much more possible in a city like Houston maybe versus a different city like New York City, maybe much tougher because of many of the many other reasons including the lack of independent physician organizations or real estate rates. So that's why it's very important initially to know where you're starting your practice, right?

I mean where you start your practice will also determine w what you make on the insurance contract, how you can bill and what kind of revenue and profit you can make on your practice. And and and and it it it kinda like, you know, as physicians, the one thing I wanna kinda wanna say and I didn't say it before, is as physician we kinda feel ashamed of talking about money or revenue or profit, right?

But you know there's a there's a cost to providing care of know there's a cost to provide quality care to patients and you can either let a hospital do it and their incentives are different or you can either let a a for-profit organization do it or you can be a physician providing the care. Either way, there's profit revenues, you know, expense sheets involved in both cases. In one case, you control it, in the other case someone else controls it that's not seeing a patient.

Right, so I don't think as physicians, we should be so ashamed to talk about revenue, profits, and and running a business because you have to pay employees, you're creating jobs, you're you're paying salaries, and you're using your resources to provide enhanced quality care for patients. Right? So, you know, it's so funny that every time, and you know, I sometimes joke about this that anytime I see private equity firm or hospital system took over.

Or a practice that was close to me that was kind of in my same specialty and they took over, I benefit because a lot of their patients leave, and that's how I, you know, I got lucky because around the time Yeah. Right.

I started my practice, a lot of a lot of private equity and hospital systems took over a lot of practices close to me, and their patients defected left because the the quality of care, and not the physician, the physician quality and the skill level stays the same, but the quality of the patient experience goes down and patients leave. And you know, if patients are not having a good experience from From the beginning to end, they will leave and they'll go somewhere else.

So I think I don't think we should be ashamed to talk about you know revenues and profits and the whole money aspect of medicine, right? So where you choose to put your practice will depend how much money and how much profit you'll make and how efficiently you'll be able to run your practice, pay your staff and have a profitable practice and be successful. You know, so the location matters. Absolutely. Absolutely.

And you know the other the other side of the insurance stuff is that some insurance companies and insurance plans will just refuse to credential you and put you in a contract, meaning you are out of network with them. And so it's not that patients it like if you don't take let's hypothetically a doctor starts a practice and UnitedHealthcare says, we're not gonna credential you. Sorry, you're not in network with us. That doesn't mean you cannot see those patients.

Those patients can still come see you. You can every day see you UnitedHealthcare patients. You're just gonna see them as an out-of-network doctor, meaning the patient responsibility to pay your charge is gonna be higher. Insurance company will pay a smaller, if any, percentage of it, and it's all gonna be on the patient. So that's a factor. And some doctors have such a unique skill set or whatever it is that patients will keep doing that.

And a lot of doctors will purposely remain out of network. They just don't Get in cre any insurance credentialing networks because of a lot of reasons. They just don't want to. They don't want to deal with it. They think they can make more money and see more patients without having to be forced into an insurance network. But that's not the traditional traditional practice. But it's not mandatory. So that alone shouldn't be a fear of like, no, what if I don't get on insurance contracts?

There's a lot of practices that are exclusively not on any insurance contracts. That does not mean you're cash pay only. It just means Yeah. you are not. agreeing to every insurance company's set negotiated rate. And there's Yeah. there's pros and cons of that too. Yeah, there's pros and cons. I mean some insurances do not have any out-of-network benefits, and then the patient just pays you cash, and a lot times the cash pay Yeah.

might be much cheaper than what the insurance might even charge you, right? So pa the physician as a physician, I can determine my cash pay rate where I can say that, hey, you know, for echocardiogram I'm gonna charge three hundred and fifty dollars, for a nuclear stress test I'm going to charge fifteen hundred dollars, and for an exercise treadmill test I'm going to charge two hundred and fifty dollars.

And I can set those prices myself and you try to be reasonable compared to what an insurance or Medicare would pay but you as physicians we have cash pay prices, right? So if patient can choose to not go through the insurance. For example, if they have a very high deductible rate and their insurance allowable, which is another term that we Can talk about their Yeah. insurance allowable is is you know saying that they have to pay six hundred and eighty dollars for echocardiogram.

They can just come to be like, hey, I'll just pay you cash. And you can come, you know, and do an echocardiogram for $350, whereas your insurance would have cost six hundred and eighty dollars. The only difference is now that money does not go towards your deductible, right? so there's a lot of patients that could choose to pay cash or you could just have a cash pay practice and patients may choose to come to you for your services.

So as a provider you can you can set that up and that there's nothing wrong with that. Yeah, you know, that model itself, which is different than what we're talking about with the insurance stuff, that model is growing a lot, especially in primary care. The so called concierge or DPC direct primary care practice, where it's basically just a monthly retainer that patients pay for unlimited access outside of the insurance stuff.

Just you just see your doctor whenever you want, talk to them whenever you want, you pay a flat fee a month. And then that's it. It's kind of like having a lawyer on retainer or anything on retainer. It's just a monthly subscription for healthcare services. And it honestly, for those practices, I mean they love it. I know a few guys here in Houston that have a a concierge type practice like that. They don't deal with insurance at all. They don't have to mess with it. They don't care about it.

They don't think about it. It's just a set. This is what the patient pays. Patient sees them. They love it. The patients love it. They do literally like hour-long visits. They maybe see like eight or ten patients in a day, if that. Some days they're seeing like four or five patients, but They're making more than they did in the insurance side. The patients are happier. They can actually give the patients the time of day, review the records and everything. And their overhead is so low.

Because I mean, you know, we've talked about this term revenue cycle management. My God. I mean, I think like eighty percent of this BS RCM revenue cycle management is dealing with insurance companies. If you Yeah. didn't have to do that, every practice's overhead would be so low. Yeah. I mean let's talk about that, right? The revenue cycle management is such a it's such a frustrating process, man. This this Yeah. I can tell you're getting fired up about it. I mean complicates the whole Yeah.

Yeah, I mean I'm just getting like I'm just like re really over here right now. I don't know what it is it it is ridiculous. to do with my hands. I'm I want to bang something. Because you know, it's like just think about this and and patients don't realize this. other physicians that are not in this don't realize this how frustrating this process. And you you can set this up. It's not it's not rocket science.

I mean everyone's doing it, so it's it's doable, but it it's something you have to deal with on a day-to-day basis. But the way this works is is you know, you you you're on the insurance plan and every insurance blue cross blue shield is the insurance company, but there's many different plans under Blue Cross Blue Shield. And there's employer specific plans and then there's school specific plans and there's you know HMO Yeah.

plans and PPO plans and POS plans or whatever whatever you know there there are different plans within and every single plan has a different rate. So before you know you have 25 patients scheduled on your practice. So what your team has to do is go through each patient and see what insurance they have. And then they have to call each patient's insurance company. Sometimes stay on the phone, be on hold and verify what their benefits are.

and how much allowable there is and how much c how much we need to collect. Now there are websites. There's a websites like Availity or you know things like that where you can go in and put in the information and you get a little paragraph about what the benefits are and how much to collect and how much you know but they're not always accurate and you have to verify.

A lot of times you ha you know our insurance team has to call each patient's insurance, figure out For each service that we're about to provide them, what the what we need to, what we need to collect as practice, what the patient will have to pay, if it's approved or not. And if it's not approved, they have to apply for prior authorization beforehand so we can do their work efficiently. So before the patient even comes in, there's so much work being put in to verify their benefits, right?

And then a lot of times when you verify their benefits and an insurance agent on the phone tells you one thing once you send that as a bill to the Insurance company, you find out that was not what it was, and patient you ended up collecting either more Yeah. or less from the patient because the rep that was on the phone told you something wrong, or it wasn't their the right number what was in their database.

So now all of a sudden what you truly thought was two hundred dollars from the patient and four hundred dollars from the from the insurance was actually three hundred and fifty dollars from the patient and only hundred and fifty dollars from the practic from the insurance. So now you're the patient all of a sudden gets a bill of $150 because The insurance company told you wrong and then you told the ins the patient wrong.

So now you have to either chase after the patient and be like, hey, like you know, you you owe the practice hundred and fifty dollars and then the patient gets mad because they're like, Hey, you told us it's gonna be three hundred dollars, but why are you charging me hundred and fifty dollars for this? Why why did you guys lie to us? But it's not us. Yeah, either you either you look like the bad guy to your patient, even though it's like not your fault at all, or you write it off.

Not your fault, right? 'Cause Yeah. It's their insurance. Or you have to write it off, you let go of that money, and you're never gonna get paid for that service. Or what happens is pay you collected too much from the patient. So now you collected three hundred dollars from the patient where the patient's responsibility was only fifty dollars. So now you owe patients some money and you have to pay it back.

And the patients come because it gets posted and then they say, Hey, you know, you overcharge me, me give me my money back. So now that's a whole administrative disaster where you have to figure out the refund and send the patient refund and verify from your insurance. insurance company that that's truly what they meant. And then you have to prov you know and i it's it's it's it's a it's a it's a very painful process and it requires a lot of resources, a lot of work you know manpower.

It's a lot of staff time on the phone. You know, and it's like any time one staff member is stuck on the phone, they they're really not doing anything else. You know, it it occupies a phone line for other incoming calls. It occupies that staff's time, their hourly pay. You know, they can't do extra stuff at that time. They can't get up and room a patient. It's just like there's a lot of stuff in that verification of benefits. And this this term benefits that the insurance companies title it.

I mean, it's basically what it is is it tells you like how much copay to collect. at your front desk from the patient and then what services they can get that are approved. So like, you know, anytime if you're in a procedural field like orthopedics or cardiology, right? A patient comes in. In addition to the visit where you know you're trying to diagnose the condition and provide treatment recommendations.

The visit itself, the imaging, like X-rays are gonna be covered, but other stuff is not, like a DME, like if the patient comes in with a wrist injury, a brace, which is seems very logical, something they can get at goddamn CVS, the brace may not be covered, right? You may need prior authorization from the insurance company so that some person on the insurance company line can say, yeah, they had a wrist injury. Yeah, sure. Now we'll approve the brace. Or sometimes they're like, No, we won't.

You know? Like those are all benefits. The DME side. Different types of injections. whether the injection is image guided or you know like Different stuff the the benefits verification up front. You're almost kind of playing a game, like you're preempting what could possibly be needed during the visit itself from this patient in order to make sure they have benefits for it that cover it, or is this something they would have to check first and maybe the patient has to come back for?

It's a huge annoying process. The most the most ridiculous story, I I had a patient and I I knew this guy was having chest pain. I did a stress test. The stress was extremely positive. so I'm like, okay, I need to do a heart cath. So I ordered the heart cath and we scheduled at the at the hospital. And two days before we get a message from the hospital, it's still not approved yet, and you need to do a peer to peer. I'm like, okay, well, let me do a peer to peer.

Let me like explain to this guy that the stress test is abnormal, this patient probably could have a heart attack anytime. So I called a guy and I s I was on the f you know, you're on the hold and you have to kind of verify your patient's name and date of birth. And then we start talking and then I explained to him, Hey, this guy has chest pain, he had abnormal. It's like, what part of the what percentage of the myocardium was involved?

And you know, you have to kinda tell them like, okay, this was like ten percent So like it's serious, know. Why don't you try medical management first? You know, they always tell you that. And like, no, like this Right. guy is on all these medical therapy, you've seen the notes. you know, and then this guy tells me that, hey, yeah, so yeah, I'll approve your diagnostic left heart cath, but if it needs a stent, you can only put a stent in the LAD because that's where the defect is.

But if you see a blockage in another artery, you'll need to probably get prior authorization for that stent. It's like wait, I'm in the middle of the fucking surgery. You want me to just stop when the patient has a little wire in their heart and Yeah. What do you mean? Like, dude. call you? Like are you kidding me? First of all, if you know anything about nuclear imaging, like nuclear imaging can be very inaccurate sometimes of where the lesion is.

So now you're telling me that there's only one artery if I see a blockage. What if I see a ninety percent blockage in the in the right coronary artery? You I can't we can't put a stent in and if I do it you'll send a patient a twenty thousand dollar bill? Like what kind of ridiculousness isn't that? That that's what you have to deal Yeah. with on a day to day basis. Right? So so the insurance system is a disaster, but I mean this is what we the system have and we have to work in.

I’d rather be a physician dealing with it and being able to be flexible and make the the alternative decision many times I mean a patient stress test doesn't get approved so I'm like okay let's just do this and this and let's you know kind of move forward you have that control and you have that leeway so it is is a frustrating process and it requires many different steps along the way and a lot of patients don't realize this a lot of doctors don't realize that what it takes to be able to see and to get paid for We're the only sp only occup you know, profession where we provide a service to someone and someone else has to pay us who was not part of this encounter.

You know. Yeah, and then that third party determines like how much they're gonna it's like you know th it's just funny. Think of it like a restaurant. You go to eat at a restaurant, you order an appetizer, a steak, and a dessert. The chef makes it, you eat it, the waiter brings it to you, you eat the food, the bill comes and you're like, Yeah, see that person over there. They're gonna pay you, send the bill to them. It may take sixty days.

And so then That third party sixty days later will just send you a dollar amount that is lower than the price of the salad appetizer, lower than the price of the steak, lower than the price of the dessert. And they're just like, Yeah, that's just what we pay. Yeah, and then the ri whatever whatever your cost was, now reach out to the original customer and tell them to pay. Right? Right. And for the first six months of my practice I didn't understand that concept. So I was like billing Yeah.

insurance and not collecting anything up front from the patient. You know, like we'll just send the bill, Really? like you know, and I I I wasn't you know, it was too much I just had one employee. It was me and one employee, and our billing Yeah, you were de it's just too much to deal with. too much to deal with. So we weren't just kinda like keeping track of what do we need to collect up front. So our patient collection numbers were like like one percent and everything else was insurance.

And then and as we're reviewing Yeah, they were abysmal. Well, you know, I think that's why that's why it's so important. You know, it like it makes me even more excited and like you know, incentivized to talk about this stuff in whatever format I can. Well, like when I talk to the residents about it, we d chat with friends about it, and we're talking about it in this medium. Is that people need to know this, you know?

If anyone is even considering going into their own practice or joining any private practice. These are real factors and you gotta deal with them. You gotta know them. Otherwise you're just gonna leave your work that you did. You're gonna leave money for it on the table. And tell me if there's a person on the planet that actively chooses to get paid less than what they're owed on a regular basis. No one on planet Earth. Everyone wants to get paid what their worth is. That's a normal human thing.

It's a desire that you have to be valued. And in medicine, we're not even taught how to get the value that we have for the service we provide. So I think it's very important for people to be aware of this and that these systems are in place. We're not gonna change the insurance landscape today or any time in the near future. So it is the game. You gotta play the game and you gotta know the rules.

And who better to play the game and know the rules than someone who's actually participating rather than someone who just learns about it third hand from some kinda course they took. comes in and dictates what to do but is not part of the process, not part of the patient care. And that's why I think care is prov the care is best when physicians are in charge. When physicians are the ones determining the quality of care you get, you'll guaranteed get good care, right?

I mean, because even if a physician is profit driven, right, all they're thinking about is money. You know? That's no different than someone else who's looking at the bottom line.

But a physician who's taking that oath, you know, the Hippocratic Oath of doing no harm, and is face to face with the patient and answerable to you and and and looking you in the eye and telling you that, you know, this is what we're gonna do, there will always be some kind of you know moral compass that's gonna be guiding you. Rather than unless you're a total psychopath as a physician and there there are psychopathic physicians, you know, then Right.

there will be some kind of moral compass that'll that'll be guiding you and you will always try to do right by the patient. Right? Rather than someone who's not even facing the patient and they're determining all the qualities of care the patient is going through, th the moral compass is lost there. I mean and most I mean I most people in my opinion are good people and they want to do the right thing, but they're not thinking with that mindset.

Whereas when you're face to face with someone and Yeah. bring the humanity into it, you're always gonna be driven by the moral compass. I couldn't agree more, man. Couldn't agree more.

So I it would be it would be great if someone watches this podcast and, you know, decides that they've had enough and they you know, what they want to do is kind of follow the path and go independent and take t take charge of their profession and and and and be independent and try to run things, take that risk and I would encourage anyone, I mean reach out to us. I mean, you know, we're both happy to talk about it, reach out to us, let us know.

And I'm always happy to guide people and kinda let them come on and start their own process. I mean I'd be happy if another another cardiology practice starts in my own building. I'll say let's do Yeah. it. Let's you know let's help each other out and see what we can do. Dude, I mean you've been a great resource for me, so I can vouch for that. But I I agree. I mean I I would love to motivate other people. I mean that's how that's what motivated me.

It's people like you, some of my other mentors who went on their own and had very successful practices. It's doable. People do it. You just gotta take the leap. Yep. All right man. Well, till next time. We'll keep Alrighty. talking about this pro topic. Yep. We'll see you guys next time.