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Hey, welcome back everybody. Over the next several months, I’m going to chronicle my practice’s journey as we try to move away from insurance panels. After having taken all the major insurance panels for nearly 15 years, we have decided that enough is enough. The administrative burden and poor reimbursement are no [00:01:00] longer sustainable for us. So listen in through the good, the bad, and the terrifying as we go through this process of dropping some insurance panels.
Today is the first episode in the series. I’m discussing how we moved from pre-contemplation to contemplation, and finally, to preparation for this decision. I’ll dive deep into the finances of insurance versus private pay and share what factors specifically led us to decide to finally drop two panels.
This question comes up a lot in The Testing Psychologist Community on Facebook and in my consultation. So my hope is that there are many of you out there who might benefit from this series of episodes.
Let’s go ahead and get to it.
[00:02:00] All right. Preparing for this episode has been interesting and multi-layered. I can’t say that I’ve ever truly applied these stages of change model to anything I’ve done in my life. Luckily, I haven’t struggled with addiction or other problematic behaviors, and I’ve typically been able to evaluate circumstances and information and decide and act pretty quickly when I want to. But the stages of change model definitely applies here.To even get to the point that we’re at now took literal years in our practice, but once we started moving, things really did accelerate quickly. So, I’m going to walk through the stages of pre-contemplation, contemplation, and touch on preparation today to [00:03:00] give some background on our decision to get off of some insurance panels.
This process started a long time ago, and it’s been a very long process to get here, like I said. We’ve been tied to insurance forever and it’s difficult to let go of things that are familiar.
For us, insurance has always been a matter of access. We didn’t want to exclude any clients from services because of cost. I know that taking insurance is not a guarantee that we won’t exclude anyone, but it was a big step toward inclusivity.
Another piece is that insurance was familiar and consistent. I jumped on pretty much every major insurance panel when I started my practice in 2009. And so, it’s really all that we have [00:04:00] known. So, expectations were clear. Even though it was a huge hassle, it was familiar.
Another fact is that insurance is low maintenance in one specific area, and that area is marketing. We really have not had to market at all in nearly 15 years. And so that’s something that I know will be changing. I’ve embraced that, but it’s a hard one to come to terms with when you have literally done no marketing aside from in-person meetings and networking, doing good work, and word of mouth.
The last reason that this was nowhere on my radar for a long time was fear. Plain and simple. I was scared that we would not get any referrals without insurance, even though cognitively speaking, I [00:05:00] know that we do really good work and we have a massive waitlist, so the likelihood that we would get no referrals is pretty low. And when you take into account that we basically only need one private pay referral for every insurance referral that we get, then it makes it even easier to move in that direction.
One of the descriptions I found of the pre-contemplation stage was underestimating the pros of changing behavior and overestimating the cons. This definitely fit. I was largely blind to the upsides because all I could see were the downsides and the risks to getting off insurance panel.
The move from pre-contemplation to contemplation started probably about a year ago. [00:06:00] So this technically falls outside the “changing behavior within the next six months” guideline for this stage, but it started around the time that we began the EOS journey- Entrepreneurial Operating System. I’ve done a whole series of episodes chronicling our implementation of EOS in our business. So you can check those out.
When we got started, our consultant came in, in the very first meeting, took stock of our services, waitlists and finances, and immediately asked why we were taking so much insurance.
To have someone come in from the outside, was a real wake-up call that led us to take, again, quoting from the description of the stages of change, a more thoughtful and practical consideration of the pros and cons of changing behavior.
We still sat on it for the next few [00:07:00] months. So this will be from about February to Maybe July or August, maybe September of 2022, but over time, it was like one of those gentle wake-up alarm clocks that starts very soft with the chime, but it gets louder and louder until it is just blasting that chime. And we couldn’t ignore it. We just could not ignore it any longer.
There were a few factors that really pushed us over the edge. One of the big ones is Blue Cross Blue Shield or Anthem here in Colorado made an enormous error with two of our providers. They loaded their contracts incorrectly in September of 2021. I caught the error and reached out to them in November or December of 2021, but it took [00:08:00] eight, maybe 10 months, we’ll say eight months. It took eight months after my initial message to load those contracts correctly and pay us for those claims.
And by the end, this was at least 30 emails and phone calls on the books trying to get this straightened out. It was spreadsheets sent back and forth documenting claims that have been denied. Most importantly, it was nearly $100,000 in unpaid claims just due to this Blue Cross Blue Shield error, which they admitted in the very beginning of the process, but took 8 to 9 months to correct and pay the claims.
Let’s take a break to hear from our featured partner.
When you’re assessing memory in children and adolescents, remember these three assessment tools from PAR: the ChAMP, the MEMRY, and the MVP. These measures were [00:09:00] developed specifically for use with children, adolescents, and young adults. Used together, the three instruments, which are co-normed, provide you with comprehensive information about memory and performance validity. Learn more at parinc.com\memry.
All right, let’s get back to the podcast.
So that put a bad taste in my mouth for insurance. It didn’t help, but here in Colorado, Blue Cross is our lowest paying payer, so double whammy.
The next factor is that we got a few clawbacks from Optum for testing claims. It was nothing major, but it was enough to piss me off. It was enough that, just another pebble in the pond, so to speak, to get me thinking this is a real hassle and it’s just not cool that they can pay us and then take the money back because [00:10:00] they made a mistake.
And then the last thing again, just another small component but important is the increased fees for testing materials. I think we all know that in November, December, and maybe before that, most of the test publishers up their fees with a major increase from Pearson. That was another factor in this decision to get off some panels and try to make a little more money.
Speaking of money, a big part of this contemplation phase was running numbers. Here’s exactly what I did to figure out the financial impact. I looked at all of our major panels to determine exactly how much we were getting paid from each one. You can find this info on your fee schedules. Hopefully, you have a fee schedule from each insurance panel, if not good place to start.
So I looked at all the major panels [00:11:00] and looked at the CPT codes for testing and determined exactly how much we were getting paid. Now, I’ve known this information for a long time. We have a master finance sheet that has all this info, but I went back, pulled it all together, and put all of those numbers side by side.
I then zeroed in on the fact that our two lowest-paying panels paid about 25 to 30% less than our highest-paying panel. So then I looked at what percentage of evals these lower-paying panels made up and it was about 30%.
At that point, I both freaked out and got really excited because, in my mind, the wheels were turning. It’s like if we could replace 30% of our evaluations with a higher paying panel that pays about 30% more per evaluation, that could [00:12:00] be a significant difference. So I calculated two more things. The difference in revenue if we replaced these low-paying evals with private pay and the difference in revenue if we replaced these evals with just higher paying insurance panels.
In both cases, the impact was significant. Of course, better with private pay replacement, but even working with the higher paying panels was going to make a huge difference on the order of tens of thousands of dollars in our practice.
The last component, which wasn’t calculated but it is important, is that the two lower-paying panels were also the two most labor-intensive from the admin side in terms of denials and billing issues. So combining all those things, it was a win-win for us.
So with the numbers staring us in the [00:13:00] face, this happened probably, let’s call it October or November of 2022. I still wanted to take our time. I wanted to ask for raises from these panels as a last-ditch effort to keep them, but the thing that pushed us over the edge was getting to another EOS meeting and our consultant was like, what are you doing? Just drop these panels. I think that was all that we needed to feel justified in doing so. We really didn’t look back from there.
So that’s how we moved from pre-contemplation to contemplation and started knocking on the door of preparation. In the next episode, I will be talking all about the action steps or preparation that we took [00:14:00] to get the ball rolling with this process.
All right, y’all, thank you so much for tuning into this episode. Always grateful to have you here. I hope that you take away some information that you can implement in your practice and in your life. Any resources that we mentioned during the episode will be listed in the show notes, so make sure to check those out.
If you like what you hear on the podcast, I would be so grateful if you left a review on iTunes or Spotify, or wherever you listen to your podcast.
And if you’re a practice owner or aspiring practice owner, I’d invite you to check out The Testing Psychologist mastermind groups. I have mastermind groups at every stage of practice development: beginner, intermediate, and advanced. We have homework, we have accountability, we have support, and we have resources. These groups are amazing. We do a lot of work and a lot of connecting. If that sounds interesting to you, you can check out the [00:15:00] details at thetestingpsychologist.com/consulting. You can sign up for a pre-group phone call and we will chat and figure out if a group could be a good fit for you.
Thanks so much.
The information contained in this podcast and on The Testing Psychologist website is intended for informational and educational purposes only. Nothing in this podcast or on the website is intended to be a substitute for professional, psychological, psychiatric, or medical advice, diagnosis, or treatment. Please note that no doctor-patient relationship is formed here, and similarly, no supervisory or consultative relationship is formed between the [00:16:00] host or guests of this podcast and listeners of this podcast. If you need the qualified advice of any mental health practitioner or medical provider, please seek one in your area. Similarly, if you need supervision on clinical matters, please find a supervisor with expertise that fits your needs.