Practices' clear payment policies let patients know where they stand

A column about keeping your practice in good health

By — Posted Sept. 12, 2011.

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The policy of the two-physician Fairfield Avenue Family Practice in Johnstown, Pa., is that if patients don't pay their co-payment, or build up a significant balance due, they will not be seen. But the practice says it has never had to turn away anyone for financial reasons. Patients are well aware of the policy, and the staff sticks to it.

"Our policy is payment up front before you even go back, although there are many, many regulars who pay on the way out," said Walter Kowtoniuk, DO, a family physician and partner in the practice. "For the most part, it works. Payment is expected at the time of service. The expectations are known. No one wants to pay a co-pay, but no one wants to pay for gas in their car, either. But you have to do it."

In the same way that good fences make good neighbors, experts say good payment policies that are reasonably enforced mean that physicians and medical practice staff almost never will have to tell a patient "no" because of money.

"We put the expectations out there. It can sometimes be difficult, but staff can be diplomatic and ask patients whether they want to go out and get their wallets or reschedule," said Richard Lotenfoe, MD, a urologist with Urology Health Solutions in Celebration, Fla. "We have minimal problems."

Experts say these policies are particularly important now, because patients are paying an ever-larger share of their health care costs. This means that not only do physicians and medical office staff need to be able to collect this money, they also need to deal with patients who don't have the cash, check or credit card in hand. But practices need more than policies. Staff need to adhere to them.

"Patients need to know what the payment expectations are and what the consequences are of not meeting those expectations," said Jennifer Dynia, senior associate at Health Directions in Oakbrook Terrace, Ill.

These policies, which need to take into account that many patients may not know that their insurance policies require them to pay a co-pay or how much it is, need to be tailored to the individual medical practice and take into account a practice's legal and ethical obligations. They also need to be clear and consistent to minimize legal or public relations problems.

"We're trying to make a policy so that we're not trying to invent a new wheel on the run," Dr. Kowtoniuk said. "The worst thing is to have to think about what to do. You're going to make a mistake then."

The first step is for medical practices to consider what policies work for their particular setting. Will it be most effective to ask patients to pay their share when checking in or checking out? Will a patient be sent to the closest ATM if they can't pay? Is there an ATM nearby? Will appointments be rescheduled? Is it acceptable for a patient to neglect to bring a co-pay once and pay the next time? What if a patient forgets three times in a row? Will a patient be asked to pay before the end of the day? Will there be additional charges if not having a co-pay at the time of service means a practice has to generate extra bills?

"Maybe the first time is OK, but action is taken if someone forgets on a chronic basis. Are you going to charge them a fee as a deterrent? How strong are you going to be if it's not an urgent problem? Identify what your policies are going to be up front," said Dixon Davis, vice president of business development with AAPC Physician Services in Salt Lake City.

Other questions to consider: What will an office do if a patient builds up a significant bill of co-pays and unpaid deductibles? Will a patient continue to be seen if a patient adheres to a payment plan? In what situations will a practice be more lenient about financial issues, particularly at a time when unemployment is high and the number of people who are uninsured is growing? At what point will a patient's account be turned over to collections? Or will the debt be written off and the patient steered to other community resources?

"Turning patients away at the time of service can be problematic, particularly with current economic conditions. Many practices are being a little more lenient during these times," Dynia said. "Practices need to develop a financial policy that fits their culture as well as their patients' needs."

Those crafting these policies also need to keep in mind legal and ethical requirements. For instance, patients in emergency and urgent situations usually cannot be turned away for financial reasons.

"From a liability standpoint, there's always some degree of danger if patients come in to be seen and they are refused, but if you have a standard policy and everybody knows what it is, that practice may be within its rights," said Michael Sacopulos, a partner with the law firm Sacopulos, Johnson & Sacopulos in Terre Haute, Ind.

The American Medical Association's Code of Medical Ethics states that if a co-pay is a barrier to necessary care and creates financial hardship, physicians should forgive or waive it. The code also states that medical practices need to consider that routinely waiving co-pays may constitute fraud under state and federal law. Physicians may need to consult an attorney or other practice management expert to ensure that related policies are consistent with applicable regulations and with the requirements of insurer agreements.

The next step, after such policies have been devised, is to ensure that office staff are aware of them.

"A lot of practices are struggling with this right now, because the staff are not sure how to respond," Dynia said. "But once policies are developed, they must be communicated to the staff. Talk to your staff about collecting from patients. Give them some scripting for talking to patients who cannot pay. If the staff don't feel comfortable, if they are not on board, it won't be effective."

The policies then need to be made clear to patients. The information can be included on a practice's website or in a new patient information packet. Reminders also can be added to calls to patients about upcoming appointments or mentioned to patients at check-in.

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