FEATURE Develop a Win–Win Cash-Pay Program
Know your procedure costs, set fees that ensure a reasonable margin and keep your costs low BY ROBERT KURTZ
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ooking to grow your case volume while accommodating the needs and wishes of patients from within— and even potentially outside—your community? Consider offering a cash- pay program, say ASC managers who are already offering this option. “There is an increasing num- ber of people looking to pay cash for their surgical procedures,” says Kelli McMahan, RN, CASC, vice president of operations for Pinnacle III, a Lake- wood, Colorado-based ASC develop- ment, operational management and revenue cycle management company. “If your facility does not offer a cash- pay option, surgical patients may opt to obtain care from a facility that does.” Typically, patients electing the cash-pay option at Cedar Orthopaedic Surgery Center in Cedar City, Utah, have high deductibles, says Daron Pealock, RN, administrator and direc-
tor of nursing at the ASC. The ASC has offered the cash-pay program since it opened in 2004, and the number of people choosing this route is growing. “When I first took over as adminis-
trator in 2012, the average deductible we saw was around $1,500,” he says. “Now it is typically between $3,000 and $6,000. With these higher deduct- ibles, we are seeing patients treating their insurance like catastrophic cov- erage and paying cash for their elec- tive care. Every year, since I came on board, our number of cash-pay patients has increased. In just the first six months of 2017, we probably doubled what we saw in 2016.” The cash-pay program at North- ern California Surgery Center in Tur- lock, California, primarily caters to another patient population: those with- out health insurance.
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“In this area, we have a lot of lower income people, such as migrant farm workers, who may not have insurance, so they are only cash-pay,” says Brad Harmon, the ASC’s administrator. “We opened in 2005 and offered a cash option from the start. We wanted to make sure our ASC could be an option for those without insurance, and one that was more affordable compared to hospital surgical costs.” Many people, including members of certain religious groups, do not have insurance despite the Affordable Care Act’s individual mandate, McMahan says. “Members of the Amish and Mennonite communities, typically, do not have health insurance. Therefore, they look for providers who accept cash. If you have large numbers of these groups in your market, it makes sense to cater to them.” Another group of people looking for cash-pay programs is medical tour- ists. Cedar Orthopaedic Surgery Cen- ter’s program is attracting patients from throughout the US, Pealock says. “Our owner and operator, Randy Del- core, MD, has focused on the idea of domestic medical tourism. He did not think people should need to leave the country to save money on surgery. With people shopping around for their care, we are contacted by folks all over the country on a regular basis.” International medical tourism might benefit Northwoods Surgery Center, a Pinnacle III ASC in Woodruff, Wis- consin, McMahan says. The ASC has sought ways to attract patients from Thunder Bay in Ontario, Canada, who were frustrated with waiting to receive surgical care. “We are happy to be their faster option,” she says.
Components for Success A cash-pay program’s success hinges upon knowing your procedure costs, McMahan says. “Without knowing the costs of your procedures, setting an appropriate fee is difficult. For cases with implants, decide whether to
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