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[00:00:00] Hello everyone. Welcome to the Testing Psychologist podcast, the podcast where we talk all about the business and practice of psychological and neuropsychological assessment. I’m your host, Dr. Jeremy Sharp, licensed psychologist, group practice owner, and private practice coach.

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Welcome back, everyone. Today’s episode is another episode in the Private Pay transition series. You may have seen a couple of previous episodes. As we transition to private pay in our practice, I’m trying to document this journey [00:01:00] and look at it through The Stages of Change lens. There have been two previous episodes where we worked through the pre-contemplation and contemplation and then moving through to preparation. And now, we’re transitioning into some action. So, listen in as I talk about approaching our go-live date or our termination date and things that we are taking care of as we get ready to take this leap.

Now, if you’re a practice owner and you’d like some support in a group environment, The Testing psychologists masterminds typically enroll in July and January, so we might be pushing it with July, but there is always a waitlist. Don’t hesitate to reach out. If you’re interested, you can schedule a pre-group call at thetestingpsychologist.com/consulting.

[00:02:00] All right. Here we are. Like I said, there are two previous episodes in the series, so if you did not listen to those, it may help to go back and listen to them just for some context. They are linked in the show notes. But the idea here is that I am trying to document largely in real time as we prepare to drop some insurance panels for testing in our practice.

 A lot of people ask about this and how to do it. I’m not saying we’re doing it the right way necessarily, but I am committed to letting you know how the process is going and what we are doing to make this happen.

Last time was all about preparation/determination: taking small steps toward behavior change. We determined our stop date. We figured out [00:03:00] exactly how to terminate our contracts, and we dialed in the standard operating procedure for scheduling out-of-network clients, and we prioritized the existing clients who are already scheduled for our cancellation spots prior to the termination date to try to provide a little better client care and be able to see the folks who we had already scheduled.

So now it’s all about action. And I’ll quote from the description of The Stages of Change model here. In this stage, people have recently changed their behavior defined as within the last six months, and intend to keep moving forward with that behavior change. People may exhibit this by modifying their problem behavior or acquiring new healthy behaviors.

So we’re really straddling the determination and action stages at this point. One big [00:04:00] action is that we implemented the out-of-network policy. We are not scheduling these clients anymore and we’ve told all of the community partners about our transition. We bolstered the marketing efforts to target private pay clients through Google Ads and networking with specific practitioners in the community. We created space in clinician schedules for out-of-network evals so we could prioritize those and contract evaluations that pay our full rate. And again, we’re prioritizing cancellation spots for these clients as well. So, we’ve taken a number of actions to move us in the right direction and really commit to this process.

Now, our contract termination date was June 1st, so we have submitted the paperwork to terminate our [00:05:00] contract. We needed to give 30 days’ notice to this particular insurance panel. And we are committed. It feels a little scary, but when I get scared or anxious, I go to the data and to the facts. And at this point, we do have some data on conversion rates and private pay scheduling.

And this is, I think, a real benefit of having the combination of booking evaluation several months in advance and giving a long on-ramp to the termination of your insurance contract.

We made this decision back in January, and at that point, we were scheduling evaluations probably into September or October, and we set a termination date of July 1st. Just to clarify that a bit. We made the decision in January 2023. We knew we were going to [00:06:00] terminate our contracts and not see any clients from the dropped panels after July 1st. So we had essentially six and a half months before that termination date, and we already had evaluations booked into September, and October 2023. So we had July, August, and September’s evaluations to experiment with in seeing how many people would stick around. Plus it gave us about a six-month lead time of scheduling to fill and dial in our private pay script and so forth. All that to say, we have some data on our conversion rates and our private pay eval scheduling.

Over the six months after our stop date, at this point we are, I guess, booking into January. We have found that approximately 10% of those spots have been filled with private pay [00:07:00] evaluations. So this is huge. For our practice, which is highly insurance based, that’s a pretty significant increase from probably the 1% to 2% of private pay evaluations that we typically booked.

So this is good. This gave me some relief. People are actually scheduling on. On the front end, our calls for evaluations have increased. Our Google Ads are converting into leads at a great rate and the conversion ratio from our intake phone calls is holding steady, if not going up even though the expectation is for it to go down when you switch to doing more private pay.

I’ve heard varying numbers, but just as a little sidebar, when I say conversion rate, I mean what [00:08:00] percentage of clients who call actually end up scheduling their appointment? So for insurance-based practices, this should be around 70% to 80%, if not higher. For private pay practices, this should be somewhere around 30 to 40%. Maybe a little bit lower depending on your market. And yes, our conversion rates are holding steady right around 75% with a little bit of fluctuation there, even as we are increasing the private pay referrals and spots and dropping these insurance panels.

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All right, let’s get back to the podcast.

So the data is hopeful. The idea is that private pay evals will increase. I think I mentioned that our team is going to continue to file out-of-network claims for folks. I heard from a community practitioner recently that that’s actually a nice selling point that they can tell clients hey, yes, they’re out of network and the process is relatively seamless.

So this is going beyond superbills. We’re not just doing superbills, which require the client to submit the charges on their own. We are actually submitting out [00:10:00] of network claims for our clients. We have it set up in our EHR where we submit the out-of-network claim, the client pays us directly on the front end when they receive the services, but then the client gets reimbursed directly by the insurance panel if they have out-of-network benefits. This is the opposite of what happens within network claims, in which case, the insurance company pays us and then we collect from the client.

So if you’re considering going out of network, I think that is a nice selling point for clients where you can say, hey, we’ll still submit claims for you and you’ll get reimbursed directly by your insurance panel if you have out-of-network benefits.

I don’t know if I mentioned back in the beginning and previous episodes that I am using a weighted average spreadsheet to calculate our income based on payer. It’s been very useful to project out our revenue with different percentages of private pay versus each [00:11:00] insurance panel for our evaluations.

If you’re interested in that, it’s pretty easy to calculate weighted averages. And what I mean by that is, instead of just averaging the amount that you make per hour of evaluation across different insurance panels, you assign a “weight” to each panel depending on what percentage of your practice is comprised of that panel.

Let me break that down a little bit more. So, let’s just say, in our practice, I’m making this up, we take three insurance panels: Blue Cross Blue Shield is 40%, Optum is 30%, and Cigna is also 30%. So rather than averaging those out to calculate projected revenue, you would assign a weighted average which would give more weight to [00:12:00] Blue Cross Blue Shield, and then Optimum and Cigna are weighted equally. And then when you do the calculation of your average reimbursement rate, it assigns a heavier weight to whatever rates Blue Cross pays.

All of that to say, it just helps you dial in your revenue projections a little bit more precisely, and in my case, I have this weighted average spreadsheet where I can manipulate the different percentages of private pay versus each insurance panel and see exactly what kind of effect that’s going to take on our income.

I will say too, just as I start to wrap up, that a nice sidebar of all this is that the panels we continue to stick with have all given us raises for testing services. That was part of this process. I think I mentioned in the first private pay episode that the very first step in all of this was requesting a raise from all of our insurance panels, and one of them [00:13:00] neglected to give us a raise, which is fine, but a few did and that was really helpful.

So the next episode will happen after two months of the private pay transition as we just continue to take action and potentially move into the maintenance stage. We may also start the process over as we consider dropping more panels for testing, depending on how the referral stream breaks down. So thank you for listening and maybe you’re considering going private pay.

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 [00:14:00] wherever you listen to your podcasts.

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, 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 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 [00:15:00] information contained in this podcast and on The Testing Psychologist website are 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 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.

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