Cash versus Billing Insurance for Midwifery Care?

I have been asked so many times, “Is it better to be a cash only business or offer insurance coverage for midwifery services?” I wish there was a simple answer to that complicated question. This question usually gets a response of more questions than an answer. What is your business plan look like? What population do you serve? What do your competitors do?

If you serve the Amish and do home births, cash would be an easy answer. If you live in an area where all competitors are in network and covered 100% with their insurance plan, it would be very difficult to survive in your area without accepting insurance. Your services would have to be so much better than other options in the area for families to pay cash versus covered with their insurance plan.

Pretty much all hospital based midwifery practices accept insurance. About half the birth center practices accept insurance. Far less home birth practices offer insurance processing. Families tend to have provide insurance plan with itemized bill of paid services to get reimbursed directly if out of network benefits exist.

Fewer insurance plans have out of network benefits and being in network usually requires some form of malpractice insurance in place. Few smaller midwifery practices can afford monthly payments required to have that level of coverage. The larger your practice is or will become, the more likely insurance billing for services will be necessary to be profitable.

What services will you offer? If you are doing mostly births versus gynecological services, insurance processing isn’t as necessary. If you running a women’s health clinic, very few practices can compete with specialists in area offering that similar service. I have seen creative boutique practices offer services with a primary care provider to do a flat monthly family rate to have access to the services within clinic. That cash subscription model works great for simpler, preventative style practices. Once you start offering obstetrical care and all the additional support a midwife provides versus a typical medical practice delivering in the hospital, it is hard to keep overhead expenses of the business kept with lower health insurance reimbursement rates.

I know these are the answers midwives would like to hear, but you need to look at your specific mission, goals, area, and services wanting to provided to the community. Typically care is a hybrid between insurance reimbursement and cash discount prepayment models of payment. It will give families choices that can fit a family that doesn’t have good and poor health insurance coverage.