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    Direct-pay medical practices could diminish payer headaches

    Direct pay models offer risks and rewards, and experts agree a solid plan is required to achieve a successful transformation

     

    Most family practice and internal medicine physicians working in private practice today are burdened by ever-shrinking reimbursement rates and a growing list of administrative tasks required by insurance companies. In response, many primary care physicians are exploring alternative practice options, some of which are being encouraged by policy changes embedded in the Affordable Care Act.

    Some doctors are embracing the economic security and reduced administrative burden that comes with employment. Others are selling their practices to hospitals and/or larger groups. And a small but growing number are showing interest in direct- pay practice models that allow doctors to reduce, or in some cases eliminate entirely, the administrative hassles and costs of dealing with insurance.

    There are several models in which physicians collect a monthly retainer fee directly from patients instead of relying on fee-for-service reimbursement from third parties. Although the services provided for this charge varies, some of the benefits to physicians in adopting a direct-pay model include:

    • reducing patients panel sizes, often by as much as half, 
    • minimizing administrative and staffing costs,
    • increasing the amount of time spent with patients, and
    • potentially increasing incomes

    The services covered by the monthly retainer fee vary across practices. Often, however, patients can expect to have all primary care services covered, including care management and care coordination. Typically these include seven-day-a-week, around the clock access to doctors, same-day appointments, office visits of at least 30 minutes, basic tests at no additional charge, and phone and email access to the physician.

    Although these models can look different, at their core, experts say, they share the common aim of providing high service levels, and increased access for patients.

    Monthly membership models are especially attractive for patients with chronic conditions, but healthy people interested in a higher level of service find these models appealing as well.

    Medical Economics spoke with experts to discuss some of the more common direct-pay practice models, along with some of their benefits and drawbacks.

    direct pay practice model

    Next: Concierge medicine

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