Why would a physician refuse to accept credit cards?
August 15, 2014 11:27 PM   Subscribe

I recently fired a doctor because she doesn't take credit cards or insurance. Can anyone think of a legitimate reason for this?

I'm sympathetic to not taking insurance: many providers in solo practice cannot handle the administrative headache of filing insurance claims, and she would give you paperwork so you could file yourself. That's fine. But not taking credit cards on top of not taking insurance or doing billing seems to me to place an undue financial burden on people seeking help, and is therefore unethical: if you can only pay with cash or check, and you must pay in full at the time of service, then you couldn't put it on a credit card, file your insurance, and use the insurance check to pay the card. You have to have the cash in hand...and she charges $300+ per hour. I asked her why she doesn't take credit cards and she refused to answer. I've been wracking my brain ever sense, and I just can't think of a good reason for this behavior in an era when eight-year-old girl scouts use card readers on their phones to sell cookies. I don't think it's that she is technologically inept: she took notes on a Macbook and was promoting a really recent DNA test.

Did you work in a medical office that didn't accept credit cards? Why not?
posted by Violet Hour to Work & Money (45 answers total) 3 users marked this as a favorite
Google "Chargeback."
posted by jbenben at 11:32 PM on August 15, 2014 [12 favorites]

Uncharitable guess: it's much easier to evade taxes when there are no credit card transactions to confirm.

More indulgent guess: card transaction fees can be very high, and many small businesses just don't want to sacrifice 3-9% of their rates to processing fees.

Either way, ethics don't play into it unless she is the only available doctor in town. She runs a private business, not a charity.
posted by third word on a random page at 11:33 PM on August 15, 2014 [9 favorites]

Credit cards takes as fees approximately 2% of the transaction cost, they also allows users to pull their money back at a later point (charger backs) if they are unhappy.

Both of those could cause a pretty big hit to your bottom line.
posted by bottlebrushtree at 11:34 PM on August 15, 2014 [2 favorites]

The "legitimacy" of this is debatable, but one reason merchants don't accept credit cards is because of the processing and merchant fees associated with them. Sure, your physician could use a mobile swipe tool like Skype, and then she'd only lose $8.25 on your $300 payment (vs. the $15 or higher amount she'd lose with a traditional merchant account allowing her to accept credit cards). She could have many reasons, but the first one that comes to mind is that she doesn't want to lose any of her fee.
posted by The Wrong Kind of Cheese at 11:35 PM on August 15, 2014

Re: fees, I considered this, but she would be legally able to pass those fees onto the client.

My first thought was that she is underreporting her income, but wouldn't she get caught if clients filed insurance claims?

I considered chargebacks as well, but if enough people are walking out angry that chargebacks are a significant issue, then that's a problem too.
posted by Violet Hour at 11:47 PM on August 15, 2014 [2 favorites]

It can be a lot of extra work to implement a credit card system in addition to the fees.

My guess is that eliminating credit cards and Insurance selects for a certain kind of customer who doesn't blink to pay in cash or with a check. What those clients look like, exactly, I'm not sure but it's a hunch.

I wouldn't assume anything unethical though.
posted by Tevin at 11:55 PM on August 15, 2014 [4 favorites]

Credit cards impose requirements beyond transaction fees and liability for chargebacks. If you're keeping credit cards on file for repeat billing, you just triggered a variety of PCI compliance requirements that require expensive software, etc... basically for a solo practitioner, either a big headache to keep additional overhead down, or paying for a third party service adding their cut on top of the transactions fees.

Look at it from the doctor's perspective: assuming she has a full calendar and is paid up front, cash or cheque, every time, she's got minimal fuss and maximal revenue. Leaving aside nefarious explanations, "it's easier this way" is good enough reason to do it for some. Your discomfort with it says nothing at all about her reasons for doing it, even if you wouldn't be similarly motivated.
posted by fatbird at 12:08 AM on August 16, 2014 [13 favorites]

Very charitably: It might allow her to charge lower rates than she would otherwise to people who have no choice but to pay cash. I mean, $300 is a lot, but how much would the same service be at other offices?
posted by batter_my_heart at 12:10 AM on August 16, 2014

You don't have to walk out angry to do a chargeback, though--all you have to do is be willing to tell the credit card company that you're disputing the charge. Even if it's decided in the doctor's favor, there will be a delay in payment, etc. Which is sometimes the point--you know that you can't afford doctor + groceries, so you put doctor on the credit card, call and dispute the charge, then go charge your groceries. Eventually the dispute (which you may or may not have followed up on) is decided in the doctor's favor, but by then you've hopefully gotten paid again--or the card will just allow the no-longer-charged-back fee to put you over your credit limit.
posted by MeghanC at 12:29 AM on August 16, 2014 [3 favorites]

The cost of doing business with Visa/MasterCard at all is actually very steep. And as someone who processes chargebacks for a living, I can attest to the fact that PLENTY of people pay for medical services with a credit or debit card and then dispute the charges, claiming fraud. (These people never seem to realize that the place they're disputing charges from has just enough personal information about them to prove, without violating HIPAA, that it was most definitely them making the transaction.)
posted by palomar at 12:32 AM on August 16, 2014 [3 favorites]

I can think of a major reason why a physician would refuse to take credit cards, but it doesn't make sense if she accepts checks.

A physician who only accepts cash saves a huge amount of money and headache because they don't have to worry about not getting paid for their services, which is typically a major problem for a medical office. Most physician offices have full time billing people on staff who spend all day working to ensure that the office gets paid by at least a certain proportion of their clients. Most physician offices don't care about credit card processing fees for the same reason that most physician offices are willing to negotiate on what you owe - because if you're using a credit card or you're negotiating a repayment plan, at least you're paying them. Having you pay them saves them time and money that they'd otherwise be spending bothering you to pay them and sending your bill to collections.

Anyway, that doesn't really jive with the whole taking checks thing, because if the check bounces, then you're still in the same situation of not getting paid and having to deal with the repercussions of that - but I thought I'd mention this anyway because it does answer your question of why a physician would refuse to accept credit cards. But I've mostly heard of that practice being undertaken by concierge physicians of some sort or physicians who don't accept insurance at all.
posted by treehorn+bunny at 12:38 AM on August 16, 2014 [2 favorites]

Charge backs due to people claiming fraud due to a stolen card number is unlikely to be the reason. Because the transaction occurs in person, the issuing bank, not the merchant (ie the doctor), eats the cost. There's still the possibility of people claiming to have paid for services and then not received them, ie the doctor cheated then, but I don't know how likely that is.

The real answer is probably that she does it because she can. If she has enough patients who don't mind paying in cash or check, why bother setting up a system to desk with credit cards? She might even be trying to decrease how many patients she has or how many new patients request her services
posted by matildatakesovertheworld at 12:55 AM on August 16, 2014

Many physicians are already at their full panel capacity. That means they can't see any additional patients in their schedule. If she has a full patient load which pays in cash why would she take a portion of her fees and hand them to a credit card company? Why would she waste office time on chasing credit card chargebacks and fees?

It's not unethical. She's a business person and charge cards don't fit with her revenue model.
posted by 26.2 at 1:04 AM on August 16, 2014 [21 favorites]

Suggest she look into Square?
posted by k8t at 1:31 AM on August 16, 2014 [1 favorite]

Additional thought: How old is she?

I am 44. Yes, Square and the like are super easy (I just used MY square reader on my son's speech therapist's iPhone the other day to pay for his session when I forgot the check book!)


The gulf between my use and understanding of tech, and those of my friends, neighbors, and colleagues just 5+ years younger is HUGE.

Sometimes people just want to be Old School. I remember getting a lecture from my new (at the time) doctor about 20 years ago about how fucked up new (at the time) HMO type insurance was, and how it put up barriers to the care he was able to provide.

Plus, is this doctor of your's some type of therapist or psychiatrist?

There's a whole thing about note taking and privacy involved with taking insurance for these specialties. In terms of Chargebacks, I imagine it is a similar headache if the fee is via credit card.

Sometimes people just want simplicity.
posted by jbenben at 2:55 AM on August 16, 2014 [3 favorites]

My GP does this, won't even take debit cards because of the tiny transactional fee. We think it's probably underbilling reporting for tax reasons because he doesn't always give a receipt as well, but he's also said that he keeps costs down so he can treat neighborhood people cheaply. I know he has given us steep discounts and avoided extra charges for us. When we haven't had the cash, he lets us rain check a few days on trust. He does relatively high profit aesthetics stuff as well, and he refuses to take anything but cash in full for those because he thinks if you can't pay cash for those services, you shouldn't have them. He's somewhat eccentric - high tech in lots of ways, but his billing is weird like he refused a local insurance scheme because you have to collectively bill stuff and he doesn't trust the governing board in question.

Good doctors can be weird.
posted by viggorlijah at 3:04 AM on August 16, 2014 [3 favorites]

Very few doctors (or lawyers for that matter) want to run a business. They want to treat patients, with the least fuss necessary. If they are at full capacity without taking credit cards, then it's not necessary.
posted by snickerdoodle at 3:21 AM on August 16, 2014 [4 favorites]

Why? Because you can! No insurance discounts or hassle, no credit card fees or hassle? Nice work if you can get it. The work & cost of dealing with those vendors cannot be understated. If you're running your own practice and already paying for everything else, cash-only is so attractive.
posted by ThePinkSuperhero at 4:42 AM on August 16, 2014 [2 favorites]

Nthing that your doc probably doesn't want any headaches and that she simply can, because she doesn't need to offer it. It may also be a bit of snickerdoodle's answer. My mother would never have taken credit cards for all those reasons, and I guarantee there were no unethical shenanigans going on. She is just an old school doctor.
posted by odin53 at 4:51 AM on August 16, 2014

As others have pointed out, not taking credit cards makes some financial sense.
As for not accepting insurance, there can be a couple of reasons...
• Not wanting to take-on the overhead of dealing with insurers
• Not wanting to negotiate acceptable fees with insurers
• A political statement...As in "No Obamacare!"
posted by Thorzdad at 5:11 AM on August 16, 2014

She's also exing out anyone who has an Health Savings Account. But hey, it's America and she can decide to run her business anyway she wants.

A cash-only business is pretty simple bookkeeping. Simple for taxes too.

She may not want to deal with the hassles of checks and credit cards and insurance, hell I don't want deal with those things either, if I'm honest.

It also selects clients who have the means to be able to pay in cash. Some people are snobby.
posted by Ruthless Bunny at 5:25 AM on August 16, 2014 [1 favorite]

There's a hemp-y clothing shop here in town whose owner won't accept credit cards, on the principle that people shouldn't spend money they don't have. Maybe it's that kind of situation.
posted by BostonTerrier at 6:00 AM on August 16, 2014

Doctors who don't take insurance are usually the ones who are in really high demand. As mentioned above, she likely has no problem maintaining a full panel of patients, despite not offering conveniences like insurance and credit card processing. I'm not familiar with every market, but here in New York, the top academic specialists usually charge similar rates and take neither insurance nor credit cards. They just don't have to.
posted by telegraph at 6:02 AM on August 16, 2014 [2 favorites]

Small business people (which is what private practice doctors are) would prefer to take cash over credit cards.

I am going to guess that this doctor offers some kind if special standard of care that a large number of people are specifically looking for, and he markets himself towards that niche and has managed to fill up his practice within that niche. Since the patients don't have anywhere else to go, because no other doctor offers the mindset/practices he offers, he can do what he wants. Since he is so old-school, ask if he will let you run a "tab."

That said, all-cash businesses tend to thrive on under-reporting of income.
posted by deanc at 6:10 AM on August 16, 2014

I don't know what Tevin's hunch is, but I think she wants rich clients. It's possible she fired you.
posted by pullayup at 6:23 AM on August 16, 2014 [5 favorites]

Nthing many responses above: Because they can.

Seriously. If your business supplies you with "enough" income, why would you bother taking on additional fuss (paperwork for insurance is TREMENDOUS) and lower-profit work (paying the insurance paperwork handlers, or credit card fees)?

If a physician feels that the $200/hr (after overhead) they manage to squeak out in their well-established practice, working 40 hours a week, is enough to get by on (assuming they are a coupon-cutter and belong to Sam's Club, of course) (/sarcasm), why would they want to work another 4 hours a week at $170/hr?
posted by IAmBroom at 6:42 AM on August 16, 2014

I think she wants rich clients.

This. Where I come from, doctors who don't take insurance don't want to deal with the class of patients who need to use it. I'd assume not accepting credit cards is just taking this one step further, as an attempt to avoid treating anyone who doesn't have large reserves of cash available at any time. (Of course it probably varies by location; if you don't live someplace with lots of filthy rich people about, it could be an issue with fees or just a preference for old-school systems.)
posted by DestinationUnknown at 6:59 AM on August 16, 2014 [1 favorite]

I bet they are doing this to select for patients -- as noted above, they want the kind of patient who can write the $300 check without flinching, plus do the same next week at the followup appointment and at the equally selective specialist you get referred to. Anecdotally, I've been seeing a lot more articles in the last couple of years about doctors experimenting with this kind of cash practice, "concierge" practices, and other business models that get them out of spending all that time dealing with insurance, medicare, and other billing issues.

We are using one of those kinds of practices right now actually, where you pay a (modest but noticeable) chunk of money upfront every year that allows them to keep their patient load lower and have much better response times and personal service. It's nothing like the luxury version that you read about in New York or LA, but even at the downmarket end of this there are significant benefits for both the patients and the doctor.

But access is predicated on being able to pay the fee (upfront and in cash), and if you are needing to float medical bills on your credit card (which is a totally normal thing in 2014 America), you are probably not their desired patient and they are not going to change their billing model to suit your needs.

(They could be doing this to avoid taxes, but my impression is that the real money is in medicare and insurance fraud, not tax avoidance.)
posted by Dip Flash at 6:59 AM on August 16, 2014 [3 favorites]

I asked her why she doesn't take credit cards and she refused to answer.

Because she's run into people before who want to logically argue her out of her stance. If she simply doesn't answer, then she can't be logically argued with. You take it or you leave it.

I don't think it's that she is technologically inept: she took notes on a Macbook and was promoting a really recent DNA test.

The latter of your examples doesn't necessarily mean anything -- people can be on the bleeding edge of one kind of technology and utterly ignorant of and/or unwilling to use another (there are many stories about Albert Einstein not understanding things like boat keels and shaving cream, for instance).

Really, I think it all just comes down to the fact that she has enough clients who will hand her cash or checks, and she's okay with not having three additional people in her office who do nothing but argue with insurance companies all day.
posted by Etrigan at 7:08 AM on August 16, 2014 [1 favorite]

Chargebacks, credit card fees, not just to process but for the equipment to process, people using stolen cards/fraud. Credit cards suck for any small business. It is also a good way to filter out people who can't afford the services.
posted by wwax at 7:35 AM on August 16, 2014

This seems pretty standard for psychiatrists. My psychiatrist doesn't want to deal with handling insurance or deal with the credit card companies. He seems to have a full schedule, so he has no real reason to go out of his way to deal with credit cards/insurance. In his place, I would probably do the same thing. It actually seems rare for psychiatrists in private practice to take insurance/credit cards.
posted by parakeetdog at 8:26 AM on August 16, 2014

What everyone else said. Getting into a credit card relationship with someone adds a whole new level of legal entanglement to whatever your existing relationship is that I could see people not wanting to deal with if they didn't absolutely have to. Basically they would give you, the consumer, additional legal options for getting your money back (or engaging in extended lengthy arbitration) if you felt that you didn't get the services you paid for. This is especially something a doctor might want to avoid if they were involved in providing medical services with especially stress-making outcomes (offhand I'm thinking pregnancy-related stuff, but therapy and other non-GP stuff would fall into this category) where even providing good care could result in something potentially confrontational and unavoidable as a result.

if enough people are walking out angry that chargebacks are a significant issue, then that's a problem too.

Sure but that's her problem to reckon with and a risk she may have decided to take. It sounds like you've made your decision that you think this is an irrational decision on her part. And perhaps it is. People in positions of power are allowed to make irrational-but-legal decisions all the time, and do. My vote is for "Adds another legal of legal entanglement and friction that isn't necessary because the doctor isn't hurting for patients"
posted by jessamyn at 8:37 AM on August 16, 2014

Some people refuse to take credit cards because of moral or religious objections to that sort of revolving debt. This has become slightly more common since the financial meltdown.
posted by Eyebrows McGee at 8:38 AM on August 16, 2014 [1 favorite]

Nthing most of the above, but I will add that there might be a connection between no insurance and no credit cards. If the doctor has an agreement with the insurance company, the fees are set and she can't pass the CC processing fee onto the patient. With no contract with the insurance company, she can charge anything.

Its all about maximizing income. Whether it works out that way is moot, however.
posted by SemiSalt at 8:54 AM on August 16, 2014

My dentist doesn't take credit cards or insurance. He is an older guy and doesn't want to have to hire more people to deal with the paper work.
posted by interplanetjanet at 8:56 AM on August 16, 2014

Good answers here. What would have bothered me is the lack of transparency, her refusal to say why she refused to accept them. She doesn't owe an explanation, of course, but I prefer more openness in relationships like this.
posted by fivesavagepalms at 9:44 AM on August 16, 2014

She's also exing out anyone who has an Health Savings Account

Granted, a lot of people have HSAs at a bank that does not have a physical location near them, but you can definitely just pull cash out of a Health Savings Account. You don't have to prove to the bank it's going to a medical expense, you just have to prove it later to the IRS if you get audited.
posted by Juliet Banana at 10:05 AM on August 16, 2014 [2 favorites]

She doesn't owe an explanation, of course, but I prefer more openness in relationships like this.

It's possible she has poor bedside manner. However, I'm looking at the language used in this question—"fired," "unethical," "she refused to answer"—and seeing another possibility. I often advise newer professionals to value their time and not chase every client who exists. In part, this means recognizing the difference between legitimate accountability versus attempting to please complainers who will never be placated. Such people exist. They will waste your time. When you recognize one, shuffle them out the door. Don't worry, you're not leaving anybody in the cold; the world is full of professionals who will do anything for a buck. Those squeaky wheels will get their grease elsewhere.

If the question was phrased as a polite inquiry and the doctor belligerently stormed out of the room, then of course the doctor behaved poorly. But of course that's how the story will be framed, and the question is whether that's actually what occurred.

...and is therefore unethical

In the context of a licensed profession, "unethical" is a term of art and it's a serious word to invoke. I'm not a doctor but I am a member of a similar licensed profession and I can tell you that I have no duty to create a credit card infrastructure, and the idea that not doing so is "unethical"...well, let's just say that I hear valid client complaints and I hear silly ones, and that's not one that would keep me up nights. I understand your argument. It's silly. The point could just as easily be argued in reverse—that enabling clients to assume debt for services will more likely yield harm than good—but in strict terms of ethics that'd be silly, too. There is no professional ethics issue here.
posted by cribcage at 10:38 AM on August 16, 2014 [14 favorites]

My preferred doctor is in a group that doesn't process insurance claims. You can submit the claim to your insurance company yourself. They don't have contracts that specify 'usual customary charges,' so you don't get as much reimbursement. Dealing with insurance companies is a massive, massive pain for doctors. Some companies pay slowly, refuse claims for goofy reasons, etc. And they have a standard set of fees that they use, generally rather less than the posted fees. Docs who stop submitting claims can spend as much time as they like with patients, order the tests they choose, etc., without fighting with insurance companies. My preferred doc is making plenty of money, and practicing medicine as he prefers. I can't afford to see him, but enough people can that he has a full schedule. I think of it as yuppie medicine. See also concierge medicine.
posted by theora55 at 10:55 AM on August 16, 2014

Another thing I was going to mention is that I recognized your username because I remember you as someone who has very specific beliefs about what physicians should and shouldn't do when it comes to health care, and I assume you sought out this physician specifically because she provides that kind of care. Likewise, your physician's market appeal is that she provides a level of care and service that others don't. The flip side being that she runs her practice as a cash-only business.

You are both chasing after your specific needs-- you feel a doctor should treat you in a certain way and provide a standard of care that most physicians don't. She doesn't want to run her practice having to deal with the overhead of credit card companies and insurance companies. And while I normally associate a "cash only business" with the corner bodega or local pizza place rather than with high cost professional services, sometimes you need to bite the bullet to get what you want.
posted by deanc at 11:16 AM on August 16, 2014

Is it possible she's had some dispute with the credit card processing service? Maybe she got fired as a merchant by them for some reason, or is still holding a grudge for something that didn't go her way.
posted by ctmf at 11:33 AM on August 16, 2014

> Anyway, that doesn't really jive with the whole taking checks thing, because if the check bounces, then you're still in the same situation of not getting paid and having to deal with the repercussions of that

Except disputing a credit card charge isn't a criminal offense, and passing a bad check is. So it falls on a risk assessment spectrum.
posted by kjs3 at 2:07 PM on August 16, 2014 [2 favorites]

I considered chargebacks as well, but if enough people are walking out angry that chargebacks are a significant issue, then that's a problem too.

One of the things with medical services is that a great many people feel like if the doctor couldn't figure out what's wrong with them, cure their cold or give them whatever drugs they wanted, they shouldn't have to pay. They're not justifiably angry, and they didn't necessarily get bad care, but some things that happen to people are really, really difficult to pin down and treat, and doctors deserve to get paid for trying even if they aren't successful.
posted by jacquilynne at 2:12 PM on August 16, 2014 [6 favorites]

Where I work I handle a huge volume of cash/credit/check sales, and checks are by far the highest risk for fraud and bouncing (mostly fraud) relative to the number of checks we receive, so I find it puzzling that someone would think checks are "safer"? The nonprofit where I volunteer stopped accepting checks years ago due to bad checks. Anyone can print checks. Whereas credit offers protection to the merchant as well as the consumer, so I would have thought it would be better?

In the context of a licensed profession, "unethical" is a term of art and it's a serious word to invoke.

I apologize, I meant the common definition of unethical, not anything to do with the AMA Code of Ethics.
posted by Violet Hour at 2:11 PM on August 17, 2014

so I find it puzzling that someone would think checks are "safer"?

If your ex-doctor has successfully filtered her patients to include only the relatively well-off, then checks are likely a much safer form of payment than average, especially if the patients skew older. You're talking about a fairly narrow slice of the population being seen by the doctor. Handle a lot of checks from a wide selection of people, you'll see a lot of fraud; handle a smaller number of people from within a smaller demographic that's otherwise financially reliable, it's probably not an issue. And I suspect the doctor handles bounced checks with a zero tolerance policy--bounce one and you're not a patient anymore, which will quickly remove the problem patients without triggering long, unrewarding processes with the credit card companies.

I get that you don't think her policy is a good or moral policy, but it's plainly a pretty reasonable one given a more self-interested perspective.
posted by fatbird at 10:48 PM on August 17, 2014 [1 favorite]

« Older How do I conquer my longtime addiction to...   |   What are the best books on becoming a consultant? Newer »
This thread is closed to new comments.