In Network vs. Out-Of-Network with Guest: John Lin MD

00:00:00 Hi, it's Dr. Weitz. Thanks so much for joining me for this episode of the private medical practice academy. So today I'm so happy to have Dr. John Lynn here with me to have a conversation about being in network versus being out of network. I asked John to come today because he and I have had this conversation together a number of times. And ultimately I think that there are a lot of misconceptions about,

00:00:29 should I be in network? Should I be out of network? What does that actually mean? What's actually involved. So, John, thank you so much for joining me today. You're very welcome. And it's an honor to be on this podcast and I hope to bring a lot of value to your listening audience today. I have no doubt you will.

00:00:49 So, you know, John, I understand that you are now running a sort of hybrid practice where you are in network with some payers and out of network with some payers. So can you just start by telling us a little bit about your beginnings, where you in network with everybody in the beginning, or how did you go about thinking about who should I contract with?

00:01:19 So, first of all, I am a private practice urologist. And in Arizona, I started this practice in 2006 and I had young children just moved to a new city and it's a brand new practice. So at the very beginning, I contracted with everybody because that was the fastest way to get revenue rolling. As you know, starting a practice requires a lot of startup revenue.

00:01:49 So I took out a loan, even more debt, right, incurring even more debt on top of my student loans. So I wanted to be in that work with pretty much all the payers. So that's how I started. I'm talking about Medicare HMO's Medicaid. I took everybody initially. So that's how I started. And then over time in conversation with the staff in conversation with the billing,

00:02:18 my billing billing person, they gave me feedback regarding which payers are playing nicely. If you will, to put it euphemistically and which payers are not. And then that's how we decided with whom to continue participation and with whom to be out of network. So when you say playing, I have two questions for you. Number one, when you first started,

00:02:45 how many other urologists were there in your area? Well, when I first started, I mean, Gilbert, Arizona, by 2006, there weren't many in my area, but they were close by enough so that the hospital can send patients pretty much to a lot of different urologists in the same area. So at that time population was around 200,000. So definitely enough to support more than one urologist In where the other urologists in network,

00:03:20 Pretty much everybody's in network. Yeah. Everybody, even now, if you look around here, there are a ton of urologists near me and most are in that work with insurance companies. Now, recently I did have one large group that kind of broke off of a managing entity and they went out of network with one of the local, large local providers.

00:03:44 And that created a big rift, but they are now back in network. So in essence, pretty much everybody's in that wherever you ology practice locally is in network with just a few who are in network with Medicaid. It seems like it seems like Medicaid. Is that the bottom of the barrel? If you will. Unfortunately speaking from a purely financial perspective,

00:04:05 not many urologists are in network with Medicaid. So, you know, I think a couple of things, number one, you know, it's very difficult when everybody else is in network to be the lone out of network person, unless you have some niche that makes you so different that people have to come to you or want to come to you. But the other thing that I,

00:04:33 I was going to point out is that the idea of playing nicely, I want to come back to that because playing nicely does not necessarily mean in terms of the contracted rates. It can also mean how hard is it to collect that money? Do they pay me on time? Do I get a whole lot of denials? How many hassles do I have in the process?

00:04:59 And so, you know, I'd like you to speak to that because I, is that what you mean by playing nicely? Or are you only talking about contracted rates? You hit it right on the nose and even now, so I, you run a Facebook group. I run a Facebook group. My Facebook groups called the thriving urology practice Facebook group.

00:05:17 And within that group, even now, today, there are practices urology practices across the United States who constantly, I'm going to say bitch about certain payer, certain insurer that not only is it difficult to get payment from them. So for instance, a urologist practice can get an authorization for, let's say kidney stone surgery. The surgery is performed. The authorization was obtained before the surgery.

00:05:48 And now the payer saying, we want you to submit paperwork. And then once you submit the paperwork, the first time documentation that the procedure was actually done, the insurer says what we lost it. Can you send it again? We never got the paperwork. So it is so much work for the practice to get paid on. Just that one procedure from that particular payer that you have to ask yourself,

00:06:12 is it worth your while to chase after that dollar from that particular payer? So not only is the amount per procedure matter, but also the amount, the hassle factor, if you will, from the payer also needs to be considered. Well, absolutely because it, you know, even if you use a billing company, right, and you pay them a percentage of what they collect things like I didn't get the documentation or it was denied and my office needs to resubmit.

00:06:46 Something actually costs you money. And I think a lot of people don't drill down to understand what, how much of an FTE it is to submit a claim or to deal with a denial. And so if there's one insurance company that is more agregious in terms of the amount of effort it takes, you know, if you, if I'm, let's say getting a hundred dollars,

00:07:10 but it costs me $20 because it took my staff an hour of time, then I didn't really get a hundred dollars. I think a lot of, a lot of physicians are so busy working in the, in the practice. They're they're they're I hate to say it this way, but they're turning the hamster wheel, working so hard in the practice that they don't take the time to work on the practice,

00:07:35 what you just said about the net amount of revenue. So a lot of us are fixated on the top dollar for that CPT code for that procedure. We're not, we're not thinking about how much of a cost for a full-time equivalent employee to capture that dollar. So we don't look at the net amount. We look at the gross amount of the top line and that's the middle part,

00:07:57 how much work it takes to get the net amount I think is lost on a lot of providers. Right. But you're a true profit is actually the top minus how much did it cost me to get that right? It's the same thing with certain procedures. Like people will go, oh, I'm getting paid so much for this procedure. Yes. But if you then drill down to,

00:08:22 how much did you pay for the CRM, the tech, the equipment, the disposables, wait a minute at high ticket price item when they get done. Well, my costs actually nets me. My profit is less than the quick cheap procedure, right? I'm sure you, as a procedure is do, can speak to that. I am extremely, I'm very keenly aware of that.

00:08:50 And so for instance, one of the, one of the very popular enlarged prostate procedures, it's called Eurolift and in the recent past, it's been a very good, effective procedure and a profitable procedure for the urologist. So it's good for the patient and good for the provider. But now in 2021, reimbursement was drastically decreased by Medicare. So now you have to think in terms of not just the top dollar to the amount,

00:09:19 the top line revenue that you collect for the implants that you put in, but what is the cost of the implants relative to the reimbursement? Not only that, here's something a lot of people don't think about. What is the room time? How much staff do you need to bring in that patient? Are you using viscous lidocaine? How long are they sitting in a room occupying space in your clinic that is also costs to you?

00:09:49 Can that room be used for something else? Can your staff be doing something else that generates revenue? So here's another, another very important point. A lot of people don't think about what does the urologist opportunity cost? The urologist is the most expensive employee in the practice. If that urologist is doing procedure X netting, $10, what is the cost? What is the potential of that urologist to do something else that may make them $50?

00:10:24 So that is something a lot of people don't even, don't even think about. Well. And so to come back to being in network or out of network, this has everything to do, even with what's my pair mix. And you know, it, should I try and get the patient who gets reimbursed $10 for X versus $50 for X. So if I'm going to do the same procedure,

00:10:49 I want to get the most money for that procedure. So then I want to try and target, changing my payer mix to get more of those patients. I do want to come back to the Medicaid comment though, as it relates to urology, because actually in that Rouge, the urologists were loving Medicaid for circs, for PD circs, because paeds pays Medicaid actually pays very well.

00:11:21 So some of it is really understanding your practice and what are your top 10? What are your top 25 CPT codes? What do you do more of and does one insurer pay better for, for your specific little niche than another insurer? The, and that once you open up this can of worms in network, out of network and all the considerations needed,

00:11:48 you really need data. You really need to know who are your payers? What are they paying per procedure? What is your practice dynamic? Are you a solo practitioner or do you have a large group that you have the support among your top CPT codes, top procedures? What is the payment from that particular payer and what is the volume that is provided by that particular payer?

00:12:16 So all that needs to be and all that, and more needs to be taken into consideration. Well, and to that end, I will tell you that we ended up going out of network with a provider who was basically representing 3% of our practice. And we were just a pain in the neck to deal with. Essentially said, you know what? You don't,

00:12:40 there's not enough volume here for us to be bothered hassling with you. And so if somebody called and said, Hey, I have X insurance, we'd say, you know, look, we're out of network. If you want to come see us fine, but other, if you want to go somewhere else, that's fine too, because there weren't enough of those patients to worry about it.

00:12:59 On the other hand, you know, something like blue cross, if blue cross is making up 40% of your practice, you're not going to tell them, oh, I want to be out of network. It unless you are prepared to lose 40% of your practice. Yes. Yeah. And that goes to the point of, you really need to know your numbers.

00:13:21 You need to work on the practice and understanding those numbers so that you can continue working in your practice and not just turning the hamster wheel. So a lot of things to consider when you're considering in network versus out of network is, and also I want to encourage the physician to the listening audience, that you don't have to stay in network with a particular payer,

00:13:46 if they are, as you said, egregious in, in both their payment and also in their business practices, relative to you as a, as a practice, as a urology practice or a medical practice, know your numbers. And then if it doesn't make economic or sanity sense, consider cutting them out of your, out of your payer mix. And you'll be it's.

00:14:10 So for you, I'll speak for you allergies. There's a shortage of urologists. So you need to know your economics and local demographics and practice happier and make sure your staff is practicing happier by dealing with payers that are reasonable and then cut the headache out of your lives. So what percentage of your practice is currently of your yeah, yeah. Of your practice is out of network.

00:14:39 Ooh. So I, I do get a lot of people who, so I here here's a little context, so you don't get, you don't get to, you. Don't get to where I am just overnight. I'm just going to say that right now. So over years I'm I'm I am, I would call it, let's see, 16 year overnight success.

00:15:00 How's that? So I've been doing urology in this area for 16 years and I ended up somehow I became the local vasectomies, the, the guy who does the most of us, ectomies just in 2021 alone. I performed 1200 vasectomies. Let's see this past Saturday, I performed 22 vasectomies and on a Saturday morning. So I do a lot of us ectomies I became really,

00:15:23 really good at doing them. So in a roundabout way to answer your question, how much, how much of my volume or practices out of network, it's mostly out of network for vasectomy because I became really good at doing that, doing that. And I've built up a lot of social proof in terms of online presence and that drove a lot of the outer network bucket.

00:15:47 If you will. Can you clarify that? Because what I hear you telling the audiences, an out of network for a procedure, not necessarily out of network for a percentage of insurers in my market? Well, I am at an actually I'm out of network for a lot of insurers and by market. I did not, I don't just carve out that particular procedure.

00:16:11 I'm saying a lot of people are paying cash. So first of all, I am out of network for a lot, from a lot of payers because of various reasons, payment headache in dealing with them. But I built up enough of a reputation. So that locally, even actually interstate people fly in from different parts of the country for me to perform this procedure on them.

00:16:34 They're willing to go out of network and pay cash for me to perform that procedure for, for me to provide that service. So I'm actually out of network with a lot of payers, but a lot of P a lot of patients still come in, either utilize their out of network services or simply pay cash. So that's probably a good way for us to segue because when people decide to go out of network,

00:17:01 there seems to be a fair amount of commute confusion as to what does that mean in terms of do, if I'm out of network, do I actually bill the insurer and then try and collect some amount from the patient? Do I just have the patient pay cash and then give them a receipt and they go deal with their insurer and their insurer. How do you deal with that?

00:17:25 So you can do it either way. So if the patient has insurance and has out of network benefits, you can say, here is the claim, or you can give them the CMS 1500 form and say, here's the claim. I'm going to collect everything that is due from you. And then you submit the claim to the insurance company and get what you can from your insurance company using your out of network benefits.

00:17:53 Okay. And, but you could also take on the billing for it. You're as the physician. Yes. On the other hand, you can say, okay, you have out of network benefits. I am not in network with your insurance company. I'm going to provide the service. And then I'm going to submit the claim, the payment claim to that your insurance company,

00:18:16 which is out of network with me. And then I'm going to collect whatever that out of network insurance, company's going to pay me and then collect the balance from you, the patient, And what do you do in your office? We collect, we collect the payment upfront. And so two things that I think we need to talk about, if you're going to collect the payment upfront,

00:18:41 one is the no surprises act otherwise known by John as NSA. He told me that I was totally uncool because I didn't know what NSA stands for. And so basically the no surprises act does not currently in 2022 apply to in-office CPT codes okay. In office billing. So if you're in a facility, it does apply. But if you are in an office and you are out of network,

00:19:15 it doesn't apply. As long as you are doing the billing, as soon as you pay it, asked for cash upfront and give that patient that Hicks the 1500 form and tell them to go deal with their insurer. They are basically self-insured. And so you are subject to the, the no surprises act, correct? Yeah. Well, that's just that just be clear on that one.

00:19:43 So the no surprises act was actually a byte partisan supported piece of legislation, HR, 1 33 that was signed into law by president, then president Trump, and then enacted in this year, January 1st, 2022 under the Biden administration. And the premise is good. Meaning for instance, I suffered a stroke recently. I took a helicopter ride to a neurological Institute that helicopter ride was billed to the insurance company,

00:20:16 $52,000. The insurance company initially paid 10,000 or so. And so now there's a balance, a difference of $42,000. And this helicopter company can come after me for that $42,000. Well, the no surprises act by our lovely government says that, okay, no, under this type of emergency, the helicopter company can not come after me for that, for that balance.

00:20:43 So intent is good. But when, when it comes to the unintended consequences to, especially to private practices, it's kind of devastating every well. So, so the act itself is still in evolution. It is under legal scrutiny because the American medical association, the American hospital association have both filed suits against the government regarding the implementation of the nose. Prizes act also known as NSA and the Texas medical association,

00:21:21 actually in the, they filed suit against the government and the, the federal judge upheld the, the lawsuit, the, the claim by the Texas medical association. So the specific provision within the NSA is also under dispute. So I'm going to the bottom line is the NSA is still in evolution. So the final, the bottom line is stay tuned. Yeah,

00:21:52 it stayed tuned. But I think the today message is if you are out of network and you're in private practice and you collect cash, the full cash amount from that patient, you have to have given them a good faith estimate in advance because they are essentially the same thing as self-insured or uninsured. Correct. That is, that is absolutely correct. So a lot of people think,

00:22:22 oh, well, I'm, I'm not covering the ER, I'm not going to be subject to the NSA, the rules of the NSA. Nope. Nothing could be further from the truth in private practice. If you have a patient who has insurance, but chooses not to use that insurance or you're out of network with that insurance and the patient makes an appointment and asks about,

00:22:45 Hey, how much does this cost? You are now on the hook to provide something called a good faith estimate. So that is in effect right now in 2022, also a self-pay patient. So an uninsured patient or an uninsured cash pay patient who makes an appointment and it asks you how much is this actually costs. Boom, you are now on the hook to provide a GFE,

00:23:14 a good faith estimate. So the, the rules of the no surprises, Zack do apply for positions in practice, in an outpatient setting, not in a facility. Well, and, and to be crystal clear, I actually think that you have to supply it, whether they ask you for it or not that you are legally obligated. So I don't want the listeners to be thinking,

00:23:37 oh, well, if the patient didn't ask me how much that the spectometer costs, I don't have to tell them no, if they are self-insured uninsured and you are going to have to give them a good faith estimate. And I think it's 72 hours in advance. Well, that's it. So it depends. It depends on when the appointment was made.

00:23:58 It's just insane. So if the appointment is made at least 72 hours in advance, the notice and consent GFE must be furnished to the patient at least 72 hours in advance. But if the appointment is made less than 72 hours in advance, the notice and consent must be furnished. The day the appointment is made, but at least three hours before the appointment.

00:24:22 So now here's, here's my dilemma. What if my office is so efficient that the patient can make it and they can call and make an appointment. And my staff can get the patient in within three hours. The federal government makes these rules and they are a hammer, but they forget that we are dealing with needles in a haystack. We, we details matter to,

00:24:47 to the actual implementation. So that's why this is constantly evolving. And it's kind of interesting how they came up with an interim final rule. And then no, they, they came up with a proposal and then to IFR and then boom, it was signed into law. Yeah. The way they went about doing this is I'm sure it was under a lot of pressure and this has been years in the making.

00:25:13 So I think the last topic I really want to cover, which I think everybody is going to be on the edge of their seat for the answer. Can you really make more money if you're out of network because you know, a lot of people think, oh, if I'm out of network, the insurance companies are going to pay me so much more than my contracted rate.

00:25:37 So is it true? Can they make a lot more money? And how we use is it to collect that money? So it, so the answer, unfortunately, the answer is, it depends, right? It depends on the payer. It depends on your demographic. Are you providing some sort of a specialized service that is hard to get? And also you have to think in terms of,

00:25:59 well, now you have the no surprises act in play, right? So even if you are out of network, when you provide this, this service, sometimes you are still under the rule of NSA. And right now the qualifying payment amount, which is jargon for how much that the insurers are supposed to pay you is the median insured in network payment amount.

00:26:28 So the, the amount that you get paid as an out of network provider may be the median regional in network payment by the insurers. Now, do you know what the median regional end that we're payment by the insurer for that CPT for that procedure? Probably not. Are the insurers going to freely disclose that, disclose that information? Heck no. So that's why the Texas medical association filed the lawsuit.

00:26:52 And on February 23rd of this year, the federal judge sided with the TMA that median regional in network ensure payment cannot be used as the QPA or the qualified payment account. So the bottom line is, it depends, it depends on so many variables, but if I were starting out as a new practice and I do I, and I, and I am,

00:27:18 I, I did assume debt. I have to service that debt. I probably played the game by being in network, finding out what the payment amount is, finding out your geographic area, your competition, what they are, and then consider starting out by getting rid of the problem payers, the poor payers, and look at your book of business and go from there.

00:27:47 So let me ask you this. If I'm out of network and I get an EOB and some amount of money from the insurance company, and I don't like that amount of money, how often are you successful in getting them to increase the amount of money they pay you? And then my other question is how long does it take? Does it take longer to collect money when you're out of network,

00:28:15 then when you're in network, It can be. So in terms of, I'll give you a comparison from the, the gross charges days in AR over rolling 90 days for my practice is less than 20 days, which is incredibly fast. Meaning from the time the service is provided until we are paid in full is less than 20 days. It's almost unheard of.

00:28:37 But when you let's say industry average is 30 days or 45 days. When you start dealing with out of network insurance companies and insurance payments, you're talking months, you're talking 4, 5, 6 months because you have to fight an appeal. And the marginal increase in payment, depending on if you're dealing with it with a facility payment versus a private practice, individual physician payment for the individual physician payment,

00:29:07 the slight increase may not be worth your time and effort to be out of network, unfortunately. So it takes a lot longer and you may not get paid more, significantly more how's that you, you may get pay more, but it may not be worth your effort. Well, I think that that's really the point that I was trying to get everybody to hear.

00:29:31 Number one, it takes a long time. So if it takes a long time, it's going to affect your cash flow, right? Because you have a problem in medicine is we see the patient today and we get paid somewhere down the line. If you are in network, Medicare has to pay you assuming you have a clean claim in 15 days, the commercial insurance have to pay you in most states within 30 days.

00:29:58 So 30 days is pretty much when everybody should be collecting the vast majority of their money, 30 days or less. So if you have expenses as we've talked about, but you may or may not get some amount of money and you may not get it for several months, it becomes very hard to manage your practice from a cashflow perspective. You may ultimately get that money,

00:30:25 but just in terms of the expenses and covering every month, it makes it more difficult. I think the other thing that you highlight and I want to come back and echo that there is a big difference between facility fees and professional fees and D being out of network with your facility, you would be Delta in terms of what you may be able to get is more significant,

00:30:54 but it comes back to that same story about knowing your numbers and understanding the data. Because if it takes months to get that money and you only get, let's say 5% or 10% more, right, is it really worth being out of network? And the other thing that we, you and I had touched on that I just want you to comment on briefly is there are indeed companies that specialize in out of network billing because not everybody who has in-house billing and certainly not every billing company that is out there is good at out of network billing,

00:31:37 because basically it's an art to be able to the submitting the claim is not the hard part, it's the appealing it providing the documentation and negotiating and, and basically being a pit bull when it comes to trying to get them to increase their price. And so some billing companies are better at that than others, but do they charge more John? So yes,

00:32:05 exactly. You have out a company billing companies that specialize in out of network billing. So for your typical medical practice, they may charge anywhere between three to 7%, depending on your volume, et cetera. But when it comes to out of network billing, not only will it take you longer to get to get paid, but if you use a third party company,

00:32:30 it will cost you typically in the double digits. So you're talking 10 plus percent when you are dealing with out of network billing. So it does cost a lot more money and it takes longer to get paid. And so, and then my final question, and then we'll end here. If I'm on a network after I get done negotiating with this insurance company,

00:32:55 if I go that route, right, do I still have to balance bill the patient? Well, you know, we'd like to think that we have no contract with the insurance company, whether that is a facility fee or a non facility fee, but there are still rules, unfortunately, that you have to abide by, even though you are out of network.

00:33:17 So you should definitely collect from the patient, the balance due, even if you are out of network. Thank you. And I just cannot. Thank you enough for joining me today. This has been terrific. I'm going to have you back again. We'll have another set of questions. I'm sure. Once people hear this about every aspect about facility billing,

00:33:44 professional billing, and just, how do you manage to do 22 cases in a half a day? Yeah, that, that, yeah, that is a totally different topic. And I would love to go and do a deep dive into that. And I wish that I, sometimes I wish I can Mount a camera on my head, a 360 camera in my practice so I can show everybody how to do this.

00:34:09 So Sandy, just like you, you, you don't have to work, right. I mean, you do retired early and I'm doing I'm working because I enjoy doing what I do. And part of that work, if you will, nowadays, is to pay it forward for, for me to share what little I know about how to run a practice through this Facebook group,

00:34:28 through the thriving urology practice Facebook group. And also I'm going to give a plug to what you do, which is the private medical practice academy. You have an amazing podcast of, for those, those of you who are listening to this podcast, you already know how awesome the information that is shared by Sandy in the prior episodes. I I'm, I haven't seen anything quite like it.

00:34:50 That is so concise, no BS and just full of dense, amazing information. So you have an academy that is enrolling physicians who want to get the coaching from you, right? Correct. Okay. So thank you. But John, I have to tell you in terms of paying it forward, I think that the reality of it is to echo you,

00:35:21 you are a 16 year overnight success. I was a 24 year overnight success. And I think the thing that people who are listening to us today need to keep in mind is we did not get here truly in one day. And you, the expectation that you're going to finish a residency, a fellowship open up shop, or even be out, you know,

00:35:49 as an employee doc and open up shop five or 10 years down the line and be super successful and out of network and making gazillion dollars. And it's all going to be stress-free and easy on day one, you're smoking something, okay. It's not like that. It is a heavy lift, but it is incredibly doable. And, and you are listening to two people who have been very successful at it.

00:36:18 And if you employ these strategies, especially the data-driven strategies, then you know, really it's not rocket science. And if we can all go to medical school, anybody can do this. So on that note, Yeah, I can't agree with you more. And also one final suggestion for all the physicians listening. I tell residents who are coming out of training that number one,

00:36:42 continue to live like a resident after you're out of training. And number two, learn about coding and billing, learn about coding and billing. If you're going to be playing the insurance game, even if you're not playing the insurance game, please learn about coding and billing. It will make your life a lot easier and you're going to be a lot happier.

00:37:01 And that's true. Even if you remain as an employed physician, you can't even begin to negotiate a contract or know how much salary you should get, unless you understand how much you're generating. And the only way you're going to be able to do that is if you know, coding and billing, And you gotta know the difference between the total RVU work,

00:37:19 RVU expense practice expense, and what goes into what finally, how you finally get paid. Anyway, We're going to end. Thank you so much. Thank you. Thanks for joining me. Please be sure to sign up for my newsletter below, I'll be sending you tips on how to start a practice, grow a practice, and then add multiple services so that you can maximize your revenue.