More Practices Going ‘Third Party Free’


Faced with increasing bureaucratic demands and declining revenues due to price controls, more and more physicians are opting out of Medicare, Medicaid, and insurance contracts, write neuro-otologists Gerard Gianoli, M.D., and James Soileau, M.D., and office manager Beth Soileau in the summer issue of the Journal of American Physicians and Surgeons.

In 2008, less than 1 percent of physicians had a third-party-free practice. The number increased to 7.2 percent in 2014, and 13.3 percent are planning to make the transition soon, authors report.

The Ear and Balance Institute of Covington, La., made the transition gradually, starting with opting out of Medicare. The decision was made when Medicare cut the allowed payment for the practice’s most important diagnostic test, electronystamography (ENG), to below cost. Rather than cutting the quality of the test, or declining to see dizzy patients, Gianoli decided to opt out and charge an adequate but reasonable fee. Revenues increased, he states.

Each time the practice cut out an insurance contract, revenues dropped for a time, but so did overhead.

The advantage to patients is that they see a fully qualified, experienced physician, who can devote as much time as is needed. Patients always know the cost ahead of time; there are no surprises, authors state.

The main reason for NOT having a third-party-free practice is a desire to make more money. An insurance mill is far more lucrative, Gianoli observes. The transition can be challenging and scary, but the practice is ultimately very rewarding.

Authors conclude: “A private third-party-free practice is the best way to preserve the integrity of the medical profession and the sacred patient-physician relationship.”

The Journal of American Physicians and Surgeons is published by the Association of American Physicians and Surgeons (AAPS), a national organization representing physicians in all specialties since 1943.

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