Good and Valuable

You provide a good and valuable service and deserve to be paid for it.

Although this statement seems to be obvious, I find it one of my most oft-made speeches. Between the current health care market and the insurance environment, our doctors are finding collections an increasingly more difficult proposition. Though you have provided good and valuable services to your patients, a collection problem may easily arise in three situations: insurance companies denying reimbursement for lack of medical necessity challenges to personal injury bills, and patients unwilling or unable to pay deductibles or co-insurance.  In all three of these cases, the potential solution looks very similar. 

What is the solution?  It might be simpler than you think:  involve the patients in the payment process.  Doctors must understand that their patients must be a part of the payment process, more than simply paying their co-pays and deductibles.  Always let your patients know what is happening with their bills.  Assuming your office requires a financial agreement that informs patients they are ultimately responsible for their bills, the patients have already agreed to their responsibility.  Remember that you and your patients have your own legal relationship that obligates them to pay, separately and apart from any reimbursement by third parties.   Communicate the process and your patients’ financial responsibility.

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Insurance denials:

When insurance companies deny reimbursement, doctors should make sure patients understand their own responsibility and what you are doing for them.  Let the patients know that you are filing an appeal, but if the appeal is unsuccessful, tell the patients they are responsible (assuming your PPO contract does not hold the patient harmless).  Always arm your patients with information, and encourage them to contact their insurance companies regarding the necessity of the treatment.  In short, ask the patients to advocate for themselves. 

Many times, we forget that patients pay premiums, and insurance companies want to continue to receive premiums…  patients have more clout than doctors. Patients can talk to a number of different interested people to help them navigate their insurance policies: insurance agents, human resource department personnel, union representatives, and the insurance companies themselves. Patients are nearly always more successful than doctors when seeking payment for services.

Personal injury cases:

When personal injury cases are finalized, pursue the patients for the balance of their bills.  Even when your bill has been justly reduced according to the lien laws in Illinois, patients continue to be responsible for the remaining portion.  Remember, if 33% goes to the medical bills and 33% goes to the attorneys, this means that 33% of the settlement goes to the patient.  If the patients received good and valuable services from you as a physician, they should pay for those good and valuable services – and, don’t forget, they received the means to pay through the case settlements.

Deductibles and co-insurance:

Many doctors with whom I have spoken over the years take an easy but unprofitable approach to co-payments and deductibles by waiving them. This approach will either be in violation of the law (Medicare, Medicaid, other federally funded programs and the Medical Practice Act) and/or a breach of contract. Most PPO contracts require physicians to collect patient responsibility portions in order to ensure the patient is seeking only needed care. However, I would contend that business sense also should encourage our doctors to seek co-insurance payments.

Remember, when you choose not to collect co-payments from your patients, you are typically choosing to reduce your revenues by 20-50% of an already insurance-reduced amount. After spending considerable time with doctors calculating the impact of collecting co-pays and deductibles, doctors invariably discover they make more money when they collect the funds that patients owe.

I am not advocating collecting from patients who do not have the means to pay. For that, the ICS has good information on hardship policies for your office. Instead, I am advocating that our doctors maximize their business potential by involving patients in their health insurance, personal injury payments, and co-pay and deductible responsibilities.

In the end, do not try and bear the burden of collections alone – involve the patient.  Demonstrate the value of your services. Collect from the patients and have the patients advocate for themselves.