How to Transition From an Insurance Model to Private Pay
Lesli Bitel, MBA, RDN, LDN
Practice Building Expert & Consultant for Health Pros in Private Practice - helping you to get more clients, sell more programs and create a profitable functional nutrition practice with multiple streams of income.
Are you a nutrition and wellness professional looking to transition from an insurance model to private pay? If so, you’ve come to the right place.
The insurance model is no longer sustainable for many medical professionals, including dietitians and nutritionists. As such, making the switch to private pay can offer more freedom and autonomy in your career. Plus, it will also help you expand your services with cash-paying clients!
In this post, we will explore the differences between insurance clients and private pay clients, discuss the benefits of transitioning away from insurance companies, provide steps for making the switch successfully, and offer tips for setting up your business for success with a new model.
We will also share strategies for marketing your services as a private practice and highlight available resources to help along your journey.
By the end of this blog post, you should have all of the tools necessary to transition confidently from insurance-based care to private pay!
PRIVATE PAY VS. INSURANCE COMPANY MODEL: OVERVIEW
There are some key distinctions to consider regarding getting paid by an insurance company vs. private pay (or fee-for-service practice) models. The obvious differences include that the health insurance company is a third-party intermediary with insurance-based care and pays for services rendered based on predetermined fee schedules.
In contrast, a private pay practice model requires you to charge clients directly for your services and does not involve accepting insurance. It’s all you for the billing and collection of funds owed. No big surprises here, so far, right?
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BENEFITS OF TRANSITIONING TO PRIVATE PAY
Any business model has pros and cons, and insurance versus cash pay is no exception. After coaching?many hundreds of health professionals?over nine years as a practice-building expert, I admit my bias toward a cash-pay practice. Or even a hybrid model where you accept only your top-paying insurance plans while the remainder of your practice is cash-based.
In many cases, transitioning from insurance-based care to private pay has many benefits, including providing highly personalized and comprehensive care tailored to your client’s needs and preferences. You get to work with clients in a way that best serves them with fewer restrictions. When your clients pay out of pocket, the insurance companies no longer dictate what you can and can’t do!
So running a cash-based practice can create a deeper connection with your clients and offer more individualized services that insurance companies may not cover. Additionally, you can provide higher-quality care without insurance companies dictating the prices of your services or how many sessions you have with each client.
Insurance is a high-volume model whereby you need to see lots and lots of clients every single day of the week to make good money. The biggest issue I see with insurance providers is high levels of burnout and exhaustion. Because you aren’t making money unless you’re in front of clients, this model is challenging to scale, which means if you have to take time off for any reason, your business is not generating revenue.
Eventually, you will max out within the insurance model because you have no more available hours to “sell”. You can’t create more time to see more clients, and you also can’t increase your rates, so this significantly limits your ability to grow (unless you hire out or grow your team – which is a blog for another day!).
On the other hand, when you transition to private pay, you have the freedom to set your own rates which will allow you to earn more money over time. You are no longer limited by insurance company fee schedules and can charge what you choose for your services. This often leads to higher revenue with fewer clients as well.
Finally, by transitioning to a private pay model, you become free from insurance reimbursement delays and denials, allowing you to focus on providing adequate nutrition and wellness solutions rather than worrying about insurance paperwork. Most insurance companies are difficult to get reimbursed from which can lead to cash flow issues.
STEPS FOR MAKING THE TRANSITION FROM INSURANCE TO PRIVATE PRACTICE
Making the switch from insurance to a successful private practice can seem daunting, but with some planning and effort, it is possible!