Terminating Insurance Contracts

In a traditional, insurance-based practice, you may need to cancel existing insurance contracts prior to starting or joining a DPC practice. In that process, there are a few considerations.

First, it’s advisable to obtain and review all of the active insurance contracts–whether you are self-employed or employed. Of note, many insurance contracts are “auto-renewing” and will often remain in force until you proactively cancel them.

EMPLOYED? Some employed physicians do not sign insurance contracts as individuals; rather, the contract is with the business entity (hospital or medical group). In that case, if you leave the practice, you would not need to cancel the contracts. However, you must clarify this with each contract and your employer, because, in some cases, the individual physician is signing a contract with the insurance plan.

TIMELINE. Once you get the contracts, you should search through them to find the “terms of cancellation” or similar section. Some may be canceled within 30 days, while others could require up to 1 year of notice! Most commonly, the effect of cancellation is in the 60-90 day range. In any case, having this information will be required as you choose the start date of your new DPC practice.

NOTICE OF CANCELLATION: You will need to find out what is officially required to cancel a contract. While several options may be permitted, the safest option to ensure cancellation is to mail a certified letter. Make sure you send it to the correct address and get confirmation. It is advisable to call after 30-60 days to confirm the cancellation was processed.

DEPENDING ON TIMING you may not be able to recruit certain pts until the contract with their insurance ends. You aren’t required to still see these pts and bill their insurance, but you should be aware that abandoning them is not allowed either. In your notification letter, you might consider educating your pts to begin looking for other PCPs available to them. You could also see the pt and continue to bill the insurance or see them for free until the contract terminates. You can pick and choose which pts to offer these options to. Be aware that they may not convert to DPC with you no matter what but the longer you continue to care for them the better your chances.

Risks and Benefits of a Hybrid Practice

Some physicians elect to transition their current private FFS practice to a hybrid DPC practice, meaning that part of their practice is made up of pure DPC patients and the other part is still insurance-based fee-for-service. Some physicians elect to continue Medicare contracts only in order to both keep Medicare patients as well as keeping the ability to moonlight in more traditional settings. Other physicians prefer to keep all or part of their commercial insurance contracts. Still, others use hybrid as a stepping stone to eventually become a pure DPC practice over the course of months to years.

Some of the reasons people give for wanting or needing to do a hybrid practice:

Some insurance contracts can take 90 days or more to cancel. Ignoring this requirement leaves a physician liable to a breach of contract allegation.
The physician may be the sole breadwinner of their family and they fear that losing most of their patients all at once will put them into a difficult financial position
The need to continue moonlighting opportunities which are more limited when you opt-out of Medicare.
Concern for abandoning patients or losing patients they have seen for years
Wanting to continue seeing a large portion of patients over 65 who may not be able to afford services not covered by Medicare

The potential benefits of running a hybrid practice include:

The ability to drop insurance contracts at a slower pace allowing the practice to continue a more steady revenue stream during the transition
The ability to support family and lifestyle while transitioning, including having the flexibility to moonlight for extra income

The potential disadvantages of running a hybrid practice include:

Potentially competing against yourself. It may be difficult to recruit patients to DPC when you are continuing to support their using insurance to pay for your care.
The need to differentiate care for DPC patients vs. Insured patients (It can create a perverse incentive. You would want to enroll DPC patients but are financially incentivized to pack your schedule with insured FFS patients.)
The need to continue administrative tasks and inability to lower overhead due to the need to continue maintaining the staff and software to deal with insurers and meet data collection requirements.

If you’d like to read a little more about hybrid DPC practice, this is a great article by Dr. Lee Gross.

How many patients will follow me into DPC?

Physicians transitioning from traditional, insurance-based practice have reported a wide spectrum of success in having existing patients sign up for their DPC practice–from 0-25% based on many factors. But, an average for many private practice doctors (transitioning their entire practice to DPC) is in the 5-15% of their panel in the first 6-12 months of DPC practice. Employed doctors, especially in a hospital or a large practice, have reported less.

Your success will be very dependent on how well you notify and market to your current patient population.

WHICH PATIENTS WILL FOLLOW? Many physicians have noted that the patients they thought would definitely follow them did not, and some of the ones they did not expect to follow them did. Market to every patient in the same way, as you never know who is really understanding the value of what you are doing.

BLOWBACK. You may experience some negative feedback from patients about your leaving traditional practice or not accepting their insurance plans. Expect some anger and frustration. You will have some patients that just will not understand why you are doing this and ones that feel you are probably just trying to make extra money. Try not to overwhelm yourself in appeasing these patients. Do your best to explain your “why” and move on. Many times, these patients come around later, especially when they find that continuing in traditional practice is not as great as they imagined. Word of mouth travels fast and your biggest supporters may actually sway these patients to come back to you, even years later. Do not engage angry patients. Be gentle and let them know that you understand that this model is not for everyone but that you feel it is right for you, your patients, and your family. (See Reaction From Patients for more information.)

Marketing to Patients When a Non-Solicitation Clause is in Place

Non-solicitation clauses in employed practice can be difficult to navigate when you are trying to transition into DPC. Try to find out exactly what the clause states and how restrictive it is. If you are able to let the patient know you are leaving, but not where you are going, you may be able to simply hand them your new DPC business card and direct them to your website for enrollment. In these cases, it is especially important that you have your cards, flyers, and website already created, so it is very simple for patients to find you on their own.

Some clauses are very restrictive and will not allow you to let patients know that you are leaving. In this case, there are opportunities to create a personal brand via social media, podcasting, or blogging. While planning and preparing for your transition to DPC, you can share these channels and content with your patient so they can start following you on your journey. This way, you can eventually let them all know where you will be in a more passive form.

Know the laws and the board regulations in your state. In Texas, for example, you are required to send a letter to all patients you have seen within the last 2 years and notify them of your departure. You can allow the employer to do this for you but since the physician is ultimately responsible, you can elect to do this yourself instead. For physicians in Texas, this is a prime opportunity to alert patients of their new location and practice model. They may even want to invite patients to a town hall type meeting explaining the workings of the new practice inside the text of the letter.

Leaving an Employer

If you are currently employed by a clinic or hospital, prior to leaving, you’ll need to consider a few things, including your contractual obligations.

CONTRACT: Hopefully, you have a copy of any contract you signed, but if not, you have to ask your employer for a copy of it. Once you have the contract, you should review it with an attorney to find any potential legal problems in leaving or starting your new DPC clinic. A few specific issues often come up:
NOTICE OF TERMINATION PERIOD: Most contracts will contain a minimum length of notice for termination; 30-90 days are most common. You need to know that specific time to plan your leave.
NON-COMPETE CLAUSE: Many employment contracts include a clause that restricts a physician from practicing elsewhere after leaving. These are called “non-competes” and restrictions can include a scope of practice, duration, and geographic locations (i.e. not within a 100-mile radius).

In some situations and states, non-compete clauses can be difficult to enforce. For a review of this, read this article from DPC Frontier. Regardless, these clauses are often used by an employer to scare a physician from leaving or starting a business that poses competition.

NON-SOLICITATION: Some contracts may prohibit you from directly marketing your (pending) new practice to an existing patient. Obviously, this can be difficult to enforce, but best to understand the terms and what is permitted.

Regardless of your contractual obligation, it’s always best to sit down with your employer (clinic owner, manager, administrator, or other boss(es)) and have a discussion. Leaving on amicable terms when possible is best.

Review this article on terminating insurance contracts.

Pre-Enrolling Patients

“Pre-enrolling” entails signing up patients (members) prior to your official opening date, so that, when the time comes to open your practice, you can bill patients from your first day of practice. This allows you to have a revenue stream from the very beginning. While this seems enticing, there are a few things to consider when doing this:

EXISTING OBLIGATIONS: If you are in an existing practice, you need to clarify any employment obligations and current insurance contracts before creating a pre-enrollment process.

FIRM(ISH) LOCATION & OPENING DAY: In order to pre-enroll, you should have a fairly solid clinic location secured and an opening date, hopefully, 3-6 months (or longer) in advance.

PRACTICE DETAILS, FORMS, & POLICIES: Have you created a patient contract[UPDATE LINK]? Are you building a website with embedded enrollment forms? Does your EMR potentially have a link you can embed into your website? Do you have business cards or flyers? Having these all in place prior to starting a pre-enrolling process is advisable.

PATIENTS COMPLETING FORMS:

Online enrollment is likely the easiest choice here. This generally involves using your chosen membership management or billing program.  which will allow you to embed an enrollment form on your website.
You can have patients manually (in-person) complete required forms and then enter information into your systems later. This can be more leg work, but some doctors prefer this method to make sure patients understand the model and are a good fit.

ROLLING START DATES? If you are successful in pre-enrolling hundreds of DPC patients, you may consider using a staggered start date for their membership. If you are pre-enrolling your current patients that is the best of all worlds. You already know them and won’t have to have a “new patient” visit to get to know them.

Marketing to Existing Patients

Whether you are employed or self-employed, there are lots of ways you can market to your existing patients while you are transitioning to DPC.

If you are employed, check your employment contract for clauses that may hinder or prohibit the solicitation of existing patients. Read Leaving an Employer for more information.

First and foremost, BE READY!

Before you start talking about your new practice have a few things in place, including contact information, website, and some practice (business) basics. Read this article to learn more about Branding and Marketing[UPDATE LINK].

Create and share some print marketing: business cards, flyers, brochures, etc.
Consider possibly waiving enrollment fees or for patients that sign up prior to your opening date.
Create a letter for patients to give notice of your transition. Consider adding an event invitation to the letter, such as a town hall event.

Pre-enrollment

Embed a link to your enrollment/EMR inside your website to pre-enroll patients prior to your opening date.

Once you have everything ready

Use the time between announcing your transition and your opening date to market to EVERY SINGLE patient. Use each patient visit as a marketing opportunity and practice your 1-minute elevator speech.
Hand out flyers and business cards during patient visits and direct each patient to your website for immediate enrollment. You might consider letting them know that enrollment will be limited.
Consider holding one or more events where you explain your practice, answer questions, and enroll patients
Find networking events, such as health fairs or other community events. You might also consider small business networking, such as BNI, Rotary Club, Lion’s Club, and Chamber of Commerce.

Reaction from Patients

Most patients will be intrigued by what you are doing, especially if you get really good at getting your point across in a few sentences. Some get it right away and are ready to take the plunge with you. Others take a little more education but eventually come around. Some don’t understand right now, but once you are gone and they get lost in the system, they realize you were right and come find you.

The most difficult thing to deal with are those patients that get angry. These patients just don’t understand and some feel you must be leaving them because you are looking to line your own pockets.

If you must deal with someone who is angry face to face, stay calm, and let them know that this was a decision you did not take lightly. Let them know you are very sorry they are angry but that you are doing this for both the improvement of patient care, as well as for your own sanity. Don’t try to reason with them if they continue to be angry. Just let them walk away.

If you are dealing with someone who is angry and has verbally abused your staff, call them directly and try to allow them to voice their concerns. Again, be calm but firm in how you deal with them.

Lastly, combat anger with education. Give your patients plenty of opportunities to learn about your new model. Send out letters, hold town hall meetings and allow for plenty of time for questions and answers, make Facebook posts, talk to all your patients at each visit leading up to your opening date. Think about scheduling fewer patients if possible and having a little more time with each one to talk about your DPC future.

Notifying Your Existing Patients

During your transition to your DPC, you will want to notify your existing patients about the change. If you have a non-solicitation clause in your agreement, you have to be careful how you do this. Before announcing your departure, there are some ways to circumnavigate this and maintain contact with patients without breaking your non-compete clause. Check your contract – does your non-compete clause include email addresses and social media connections?

CONNECT WITH YOUR PATIENTS ONLINE BEFORE YOUR ANNOUNCEMENT:

Open social media pages on all platforms and “friend” your patients from those (check your contract, some employers have shut down social media networking with patients)
Start your website as a physician (not the name of your new DPC….yet)
Consider posting some blog posts about health topics on your website/blog
Ask friends to share your posts so that patients can see them too
Join all the local community groups on social media with your full name and participate in some discussions. Patients will start to take notice that you are there.

EMPLOYED PHYSICIANS – TRY TO NEGOTIATE NON-SOLICITATION CLAUSE:

Most employers may restrict your ability to notify patients about a new (competing) practice. However, that is not universally true. It’s best to have a conversation with your employer to get the best terms possible.

Consider using the discussion point that your DPC practice will be totally different from your current FFS practice. You can argue that because the new practice will be so different you won’t be competing against each other. Each situation will have different results depending on the hospital and administrators. The best-case scenario is to obtain the contact information (mailing address and emails) of all of your patients. You may want to prepare for a negative outcome, that they say no to patient solicitation. Before you announce your departure, there are some ways to circumnavigate this and maintain contact with patients without breaking your non-compete clause. Check your contract – does your non-compete clause include email addresses and social media connections?

IF SOLICITATION IS PERMITTED – ANNOUNCEMENT(S)

HOW MANY? Send at least 2 notifications (letters, emails, or other) to create some anticipation and build-up to opening your DPC practice. This can be a great marketing strategy and ease potential shock patients.
CONTENT: Your announcement should include, and likely start, with your “why.” Let patients know the reasons why you have decided to switch to DPC, namely, to provide better care to them! This will help incite an emotional and human response from patients. At the end of this letter, create some anticipation, with a teaser and sign-off with “stay tuned” or “more information coming soon.”
FOLLOW UP: Your subsequent announcements should give more detailed information on your DPC practice, including timeline, website, how to sign up, and contact information. You can also use this letter to invite each of them to an informational meeting or town hall to help answer their questions about DPC.

MAILING LETTER(S)? It can be expensive to send letters to each patient or family when you have thousands of patients, so most physicians elect to only send one letter. You can use a local mailing service or you can recruit family, kids, or friends to help you stuff envelopes. This can be very time-consuming but can save you money on start-up costs if you have the time. Conversely, if you have enough money to use a service, this can save you significant frustration and time. Remember email is much more affordable, but at least one mailing would be appropriate. To invite patients to events you could consider postcard type mailing which is much more affordable.

SPREADING THE WORD IF YOUR NO SOLICITATION IS IRONCLAD

Continue to post health blog posts and share them on all your social media
Monitor your community social media groups and if patients post asking about where you went, recruit a good friend to answer the post with your details
Get involved. Offer to give a talk at your local business association/community center/church on medical topics. Give your new cards out and ask your community to spread the word.
Solicit newspaper or television media to write an article or do a TV news piece on your practice. Share it on your social media and ask friends and family to do the same.
The power of social media reaches far beyond the non-compete. As long as the patient finds you, and not the other way around, your non-compete patient solicitation clause has not been violated.

NON-COMPETE RADIUS:

Patients will travel for medical care from their physician that they trust, especially when DPC allows care to be done easily through telemedicine.
Find the location that suits you best. Take a 2-year sublet or lease. Once your non-compete is up, you can decide to move your DPC location closer to your original patient panel. Who knows, maybe your new location will suit you better.

SAMPLE NOTIFICATION AND TRANSITION LETTERS (DPCA members only)

Transitioning to DPC from Private Practice Letter – Written by Debbie Sutcliffe, MD (members only)
Transiti oning to DPC from Employed Practice Letter – Written by Kissi Blackwell, MD (members only)

Topic 5: Transitioning a Practice to DPC