Direct Care (cash-based)

In Direct Care practices, patients pay at the time of service and there are no third-party payers involved to complicate the transaction or the relationship. Although contracting with health plans can produce a wealth of patients for a medical practice, it can also increase practice costs substantially and result in deeply discounted payments. As a result, many physicians must work extended hours and rush through appointments to maintain practice viability and income.

However, some physicians have begun rejecting insurance contracts opting instead for a simpler practice model Direct Care resulting in decreased costs of care and significant savings. There are variations on Direct Care practices such as Concierge Medicine and Hybrids, a mixture of cash-based patients and insurance patients.


Avoid complex and costly reimbursement processes
Ability to spend more time with patients, and clinical autonomy
Enhancement of financial viability by reducing cost and collecting payment upfront
Increased satisfaction with the care delivered
Reduction in hours worked.


Reduced patient volumes least initially
Increased marketing expenses as the practice will not be listed in any payer directories • Increased healthcare cost for patients.

Implementing Direct Care

The local market should support this type of practice, for instance, a community with large numbers of uninsured patients and affluent patients with or without insurance. 
Are there other Direct Care practices in the area?
Conduct a survey to determine if existing patients would be willing to transition to this type of structure. If too few would be willing to make the transition, consider keeping contracts with better paying health plans, at least temporarily.
Physicians should determine what services they would offer:
        -Would lab tests be a part of the practice?
        -Would you see patients in the hospital?
        -Would you order medication via the insurance's specialty pharmacy and administer it in the office?
        -Would you order DME through the patient’s payer and have the DME shipped to the patient?

Fee Schedule Development

Several approaches are available to determine your fees. One approach is to identify your cost, determine your break-even point, and apply a profit margin using our Charge Master Calculator. Another is to charge a percentage of the current Medicare fee schedule for your locality. Still another is to purchase data on fees for your market from Fair Health, the MGMA, or other sources. Consider hiring a practice consultant, available at the TMA, to help develop an appropriate fee schedule.

Concierge Practices

Concierge Medicine also may be described as “Retainer”, “Boutique” or “Membership” Medicine. This model is based on the financial relationship the doctor has established the patient to provide exceptional personalized care. Patients pay a membership fee (monthly, annual, or pay-as-you-go) in exchange for enhanced services. Such services may include 24/7 access to physicians, same day appointments, extended visits, house calls, nutrition and fitness coaching, etc. The amount of the membership fee must be sufficient to compensate for seeing fewer patients resulting from the enhanced services offered.


The U.S. Small Business Administration has a web page and step by step tool to assist in developing a business plan.

The American Academy of Family Physicians has a guide to assist in determining actual costs of services rendered. After determining actual costs, you would then be capable of determining fees to break even and maintain a profit.

City Data is a useful resource for determining socioeconomic information of the intended area of practice. Information may be segregated by zip code.

The Texas Medical Association has a free CME on the subject of alternative practice models.

Physicians interested in Direct Primary Care can find information at the Direct Primary Care Coalition website.