Friday, January 11, 2008

Charging Patients For Deductibles, Copays, and Coinsurance Amounts

Many offices lose money by not collecting all of the money that is due to them from patient responsibilities. Some do it by choice, and others because they don’t have a system for their patient billing. They don’t even realize that the patient’s aren’t paying the portion they owe.

In any case, it is important to know that you could get into trouble. With Medicare, it is illegal to not bill the patient for their portion, whether it is the deductible or the coinsurance. It is also illegal to bill for more than Medicare allows you to, so you must make sure you understand what the patient’s portion is. If Medicare finds out that you are billing Medicare for services, but not billing the patient’s for the patient responsibility, you can be investigated for Medicare fraud.

Of course there are exceptions. If a patient has a financial hardship you can waive the patient responsibility, but you must document this in the patient’s chart. And you can’t claim that every Medicare patient that you treat has a financial hardship. There are also other ways around this. You must bill the patient for their responsibility, but there is no law on how far you have to go to collect it. So if you send them a patient statement and they do not pay the bill, there is nothing that says you have to send a second one. As long as you can show that you billed them.

With commercial insurances, there is usually a clause in the contract that you sign that states you will bill patient’s for all copays and/or any other patient responsibility. If the insurance carrier finds that you are not charging the patients, they can consider it a violation of your contract with them and terminate your participation. They do not usually go any further than that, such as investigate for fraud, unless there are other violations going on as well.

If you have a couple of patients, friends, relatives or people with true financial difficulties that you are not charging that will probably not hurt you. But if you pretty much across the board don’t charge your patients, you could get into some trouble. Some people have a difficult time charging their patients. These laws are a good excuse for them. “I don’t want to have to charge you, but if I get caught I could be removed from the insurance carrier’s panel or investigated.”

If you have not been charging your patients, you will be surprised how much your receivables can go up when you do. It doesn’t seem like much, but it really adds up.

24 comments:

Anonymous said...

Just another word to the wise; if insurance companies find your office is doing this and can document it, they can stop paying ALL claims from your office whether you're in their network or not. Which means if 20% of your patients come from Insurance Company A, you will lose 20% of your business in a heartbeat.

And don't believe that they won't report you to your state's fraud bureau or the FBI, because they will. As well as pass the word onto other insurance companies that you're engaging in this practice. Since virtually all commercial carriers have some clause in their contract which prohibits this practice...you could lose it all in a very short time.

Anonymous said...

An optician in NY is hanging a sign in their windows saying, "We are proud to accept all insurance plans." They then collect the patient's co-pay for the examination and never actually bill the insurer because they are not in-network/panel providers. When asked, they claim they are "in the process" of getting accreditation. Is this legal?

Solutions Medical Billing said...

Well, they actually aren't doing anything fraudulent since they are not billing the insurance company. If they truly are in the process of getting credentialed, that process can take some time (up to 6 months and sometimes more). Some insurance carriers back date the date of participation to the date the contract is signed so you would need to hold the claims to bill until after the paperwork is all done.

On the other hand, if they are willing to just accept the copay amount until they become in network, they are giving the patients a break. As long as they charge the same amount for exams to both insured and self pay patients they are not breaking any laws. They can take the copay then allow an adjustment citing that they are completing paperwork so they aren't going to charge the patient.

Anonymous said...

I'm in shock, i just realized that I have to bill, patient responsibility, and I'm losing lots of money in this. I would like to know if I can bill a patient for his responsibility(in medicare) of 2 years ago. I didn't know this was the gap that was making me lose money, so I need to collect more or less 2 or 3 years ago. Can I send billing letter of that time ago?

Solutions Medical Billing said...

Laws vary from state to state on how far you can go back but 2-3 years is probably ok. But I must tell you the patients will not be happy. We have patients that complain when the bill is for services 3 months ago. I would recommend putting in a letter or something explaining why the bill is being sent so late.

It is amazing how much money offices lose to not billing patients.

Michele

Kris said...

Are there any rules/regulations regarding collecting copays for services not rendered? For example, if a patient is on a treatment plan and that plan is for 10 visits and their copay is $20.00, can a doctor ask for payment of all copays upfront? My understanding is that it should only be done at the time of service since copays are determined by the insurance company and linked to the billing.

Solutions Medical Billing said...

Actually it would be against the provider's contract with the insurance company to charge for copays BEFORE the visit. The copays are meant to be collected at the time of the visit. Not before, not after. Although there are always situations where the patient doesn't pay at the time of service and has to be billed.

Michele

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sp said...

Can doctor charge deductable & coinsurance UPFont. my doctor says that they are going to charge $75 upfront because I have $500 ded and 20%coins. They will refund the diff or bill me for more after the claim get paid.

Thanks.

Solutions Medical Billing said...

It depends on a couple of things. If the dr participates with your insurance company then they must follow what is in the contract that they signed. If the dr is not participating with your insurance, then they can charge you up front. If your deductible is not met then that is reasonable.

Michele

Anonymous said...

I would like to know what the insurance companies think of their insureds not paying their deductibles or patient responsibility? We are an urgent care clinic and are having a difficult time collecting on some patients once they have been treated and insurance has settled. I would like to know how to report patients who refuse to pay their portion.

Anonymous said...

I would like to know what the insurance companies think of their insureds not paying their deductibles or patient responsibility? We are an urgent care clinic and are having a difficult time collecting on some patients once they have been treated and insurance has settled. I would like to know how to report patients who refuse to pay their portion.

Anonymous said...

We are currently charging our patients their deductibles up front, is this legal. Or should the deductible be sent out on a bill after they receive the service?

Anonymous said...

I work for a mental health billing company and a question recently arose. If a client paid their copay at time of visit and we submitted the claim and let's say it denied for no auth, or not filed timely. Can the provider still post the copay or does the client have to be refunded?

Thank you

Solutions Medical Billing said...

Actually if the claim is denied for a reason that was the responsibility of the provider, such as no auth, they are not supposed to collect the copay.

Christina said...

Hi,

I have the above mentioned case where a doctor is willing to waive the 20% Medicare would have me owe to to them as I do have a financial hardship... After what you said, I will try to ask them if they can place this in my chart...
I did tell them that I have Medicaid Share Cost (and easily meet the amount as I'm disabled and need to see specialists). They said that they stopped accepting it. I think that most of their patients have financial problems as well and that they are observing this. They are a D.O.'s office and they have recommended acupuncture for me which I believe would not be covered by ShareCost.
My question is, since they have never billed me or given me any kind of statement, can I end up owing them or getting in some sort of trouble?... Since I have Medicaid ShareCost and they are not honoring this (and perhaps can't for the majority of the appointments if it's acupuncture), would them putting "financial hardship" in my chart be of no use? (it could look as though I just failed to tell them I had Medicaid)...

Solutions Medical Billing said...

You are not liable, the provider is, to provide proof of why they waived your balance.

Anonymous said...

I work for an orthopaedic surgeon - can we collect copays during a global surgical period?

HDiaz said...

If a patient comes in with an insurance that the clinic is not in-network (no contract) with but the insurance may or may not pay a portion of the fee, is the clinic able to collect the full fee upfront from the patient and reimburse the patient whatever the insurance reimburses the clinic? Or does the clinc have to solely collect the co-insurance/co-pay the patient's plan requires? When a contract is involved, that is another story but in this case the clinic does not have a contract at all.

Ex: Session fee = $125.00. The out-of-network plan states a $20.00 co pay. Can the clinic collect $125.00 upfront? If the insurance pays $105.00, $105.00 is reimbursed to the patient. Or can the clinic only collect $20.00 and hope the insurance pays the remainder. If the insurance doesn't then try to collect the $105.00 from the patient 1-2 months (or more) after the service date when the insurance sent an EOB?

Anonymous said...

MCR IVR for providers calling for patients’ eligibility and benefit said "This patient is currently eligible for Medicare Part B benefits." "Please note: Medicare patients should not be billed at front for their deductibles"
I'm so sick of patient or others calling our office on behalf of patients and saying "you are not supposed to collect deductibles before billing the claim, bill me!
To my understanding, MCR IVR is giving a suggestion, no more than that. According to the MCR provider Manual and Our doctor's MCR contract, there is no information that prohibits a provider to collect MCR deductibles out-front, there forth, there is no violation of MCR contract for collecting from MCR patients their part B deductibles not met. Could you please give me your opinion for this issue?
Thank you.

Frustrated Medical Staff

Anonymous said...

If a patient comes in who is out of network and for whatever reason the office inadvertently collected a Copay does this change what can be balance billed to the patient like a Deductible or Coinsurance? In one particular case the patient was trying to state that legally since we took their Copay that now we must write off all balances and accept the Copay only. I do not believe this is the case at all but was still curious enough to ask though the patient was aware we were out of network and signed a document stating as such.

Solutions Medical Billing said...

If the office advised the patient they were out of network accepting the copay does not legally bind them to anything. Actually the office isn't responsible for making sure the patient knows if they are in or out of network. The patient is responsible to know their insurance plan. But it is good customer service for an office to notify a patient if they are not in network before the patient is seen.

Anonymous said...

I work for a DME that for years didn't bill everyone for copays or deductibles. They actually insructed us not to mention to patients they had a balance unless they asked. Even if the did ask, we only told them yes if they were sent a statement, and only then, the balance from the last statement. The statement could have been for $15, but the actual balance could have been $200. We still sent suplies if they didn't pay. Old balances were adjusted off for untimely billing or bad debt. Now with Competitive Bidding they are sending bills, some of them large and going back to 2010. Of couse, most patients say they can't pay so we offer them a waiver. It's even printed on the statement that financial assistance is available. When they want to cancel because they were sent a bill, we offdr the waiver. I feel bad working here. Is this a legal way of doing business with Medicare patients?

Solutions Medical Billing said...

With Medicare it is illegal not to attempt to collect the coinsurance. A provider can document hardship, etc to 'forgive' a balance or to give a reduction but it needs to be documented in the patient's chart/file.