Many healthcare professionals have become frustrated with having to deal with multiple medical aids. It costs money in administration and staff, claim submission, processing errors, waiting for payments and, of course, bad debts (exhausted benefits that patients never pay).
However, there can be considerable benefits to contracting with medical aids, and many medical professionals choose to do this, despite the costs and the difficulties involved. As a medical practitioner, you get to choose whether to contract with medical schemes, and with whom to contract.
Before you decide, here are three points worth considering:
What does contracted in to a Medical Aid mean?
If you are contracted in to a medical aid, it simply means you take on the task of submitting claims to the medical aid and waiting for payment directly from the scheme.If you are contracted out, you deal directly with the patient, who then has to claim back the money from the medical aid themselves.
Consideration 1: Which medical schemes do most of your patients belong to?
If you have a large number of patients on just one or two medical aid schemes, it makes sense to contract with the schemes to minimise your cash collection processes. You might also want to enter into a preferred payment contract that could result in more revenue. For example, the practice in the graph below has over half of its patients coming from just two medical schemes – Polmed (21%) and GEMS (30%). This suggests that if the GP was contracted with the two schemes, he or she could benefit from entering into a preferred payment contract with them. It could grow the average GEMs fee by R19.60 and the Polmed fee by R27.00 – that’s an extra R5 588.60 per month1.
This GP could also set up the maximum acceptable rates per scheme in their PMA to ensure they are being paid directly from the scheme, instead of having to collect additional amounts from patients.
Consideration 2: What type of medical cover do most of your patients have?
The type of cover your patients have (cash, medical aid, Keycare, Hospital plan, etc.) can be a strong indicator of their ability or willingness to pay. For example, patients on a cash or hospital plan will generally pay their medical practitioner upfront in cash, as they understand that payment is their responsibility. Other patients may not prefer this cash option at all, feeling it’s unfair or unethical, as they already pay for medical aid premiums every month.
Similarly, if your practice is in an area that has many Keycare patients, they will not be able to come to you unless you are a Keycare enabled practice. So the lesson here is to know your demographic and your patients’ ability/willingness to pay in cash from their own pocket. A practice having many patients on Keycare can do as well as one serving a small number of patients on higher medical aid plans.
Consideration 3: Your technology and practice process setup.
Sending your claims while the patient is at the practice is important for both cash practices and those contracted to medical aids. However, being able to collect from a patient directly after a consultation is essential if your practice relies on cash patients. The problem with collecting payments from patients rather than from the medical aids is that many practices don’t have the necessary processes in place – particularly when it comes to collecting straight after the consultation. Remember that the chance of collecting from a patient drops by around 16%2 as soon as they leave the practice.
Similarly, if you are going to rely on medical aid payments, you need to ensure that you have the right technology and supporting staff to ensure claims are sent swiftly with minimal errors.
A private practice is essentially a private business. So you should make a business decision on whether to contract in to medical schemes, and evaluate the potential benefits to your practice. The above considerations will help you with that decision.
1. Value based on increase in rate when moving from a Polmed/GEMs non-contracted to a contracted rate at current claim volume indicated in graph.
2. Ferkovic, T.J. (2016) Waiving copays puts you at risk for fraud. Available at: http://medicaleconomics.modernmedicine.com/medical-economics/news/modernmedicine/modern-medicine-now/waiving-copays-puts-you-risk-fraud (Accessed: 26 October 2016).