Practices develop new payment system for uninsured patients

Some physicians are experimenting with offering monthly practice memberships to uninsured patients. The intent is to make the cost of primary care transparent and affordable, and the billing more convenient.

Physicians benefit by increasing the likelihood that this patient population will pay for services received.

The programs, inspired by more expensive concierge or retainer medicine and called discounted fee-for-service or direct-pay primary care, usually include any medical service a physician can do in the office. Some practices charge initiation and per-visit fees, and commit patients to annual contracts. When patients need care that cannot be provided in the primary care setting, they are guided to other resources, such as Medicaid. Many practices arrange discounts for members who need preventive services outside the office.

"If people can afford a cell phone, they can afford primary care," said Michael Fine, MD, managing director of HealthAccessRI, which helps primary care practices in Rhode Island set up these kind of programs. "We're trying to make primary care available to those who don't have it."

When Fort Myers, Fla., family physician H. Lee Adkins, DO, started having problems a couple of years ago with patients who had lost their insurance skipping appointments, he knew he had to do something. He determined the average cost of providing primary care services to one patient for one year, leaving out expenses related to processing insurance paperwork and billing. He then determined how those costs could be lowered by providing some services by phone and online.

"I've had a relationship with some patients for 15 and 20 years. They are close enough that they are like friends," Dr. Adkins said. "And they are telling me they cannot afford to come in. I got to thinking about how to do some sort of installment plan."

Uninsured patients at his practice can pay the usual per-visit charges or they can enroll in the discount program for an individual fee of $75 a month or $200 a quarter. The discount program offers a maximum of 15 visits a year with an additional co-pay of $10 each. There is no initiation fee, but patients commit for a year. Dr. Adkins won't say how many members he has but the proportion of self-pay patients has grown from 10% to 30% of his practice, and his bottom line has improved.

Most physicians experimenting with this model, including Dr. Adkins, still accept insurance, and patients with insurance usually cannot sign up for discount plans. For the uninsured, some of the mystery of medical billing is removed. In addition, physicians know they will get a set amount from those who are at an increased risk of not paying at all.

"I don't have any bad debt with my patients who are in this program," said Shawn Moyer, MD, a family physician in Rossville, Pa., who offers his uninsured patients the option of paying $30 a month and $15 for each visit. There's also an initiation fee of $80 for an individual or $160 per family.

A different approach

But while concierge care, in which patients pay a monthly or annual fee for extra services, was the inspiration, the approach is different in several ways. The patient panel is not reduced. Patients do not receive anything different from those who are insured.

"It's a great idea. This means choice for patients," said Marcy Zwelling-Aamot, MD, president of the American Academy of Private Physicians, which represents many of the more traditional concierge medical practices.

Some practices are the only ones in their state offering this model of care. Others are part of small networks, such as Dr. Fine's HealthAccessRI, which has signed on 19 practices with 50 doctors during the past few years.

There is some evidence that the model can be financially sustainable.

A cohort study in the May/June Journal of the American Board of Family Medicine examined two family medicine practices at the Oregon Health & Science University that experimented with a monthly retainer payment system. The practices enrolled 600 people over a one-year period. Patients paid $25 a month for a minimum of six months or $275 for the year. A sliding scale fee was charged for each visit, depending on the patient's income.

Based on an analysis of the amount of money collected and the care patients received, each relative value unit of provided care earned a reimbursement rate of $42.88. Average Medicare rates per RVU are $38 in Oregon. The average for Medicaid is $34.

Some physicians who have tried discount plan models have run afoul of insurance regulators. Physicians who have programs in place at their practices suggest those considering the option approach insurance regulators first to reduce the risk of establishing something that could be shut down later.

To avoid problems, the number of visits included in a membership may need to be capped rather than unlimited. The cost of the monthly fee sometimes has to be charged at the end of the month for the past services rather than in advance.

"You have to make sure you are not assuming any risk," said Dr. Moyer, who has a letter from state regulators saying he is not providing an insurance product.

But while this way of pricing primary care may be an option for uninsured patients, physicians offering it envision establishing links between practice membership and increasingly popular high-deductible health plans. This would allow patients to pay a monthly subscription fee for primary care but still have insurance for catastrophic situations. The combination of a high-deductible health plan and practice membership also is expected to become an option as health system reform is implemented.

"Employers are pushing more and more of the costs to their employees with high-deductible insurance with health savings accounts. The vast majority end up paying out of pocket [for primary care] anyway," Dr. Moyer said.