What to say when patients haggle over their bills

"Doctor, can you lower that bill?"

How patients negotiate payments with their physicians has been the subject of numerous stories in the media. With patients having a harder time than ever affording health care, consumer publications are running articles on how to haggle with doctors over prices.

So how should physicians respond to patients who have read these articles while keeping the payroll covered, the rent paid and the doors open?

"Practices need to be sensitive to this, and the more proactive we are, the better off we are going to be," said Owen Dahl, an independent consultant with the Medical Group Management Assn.

The solutions will vary depending on the practice, but generally, if a patient expresses financial concerns before care is provided, physicians can consider whether lower-cost options are available without actually discounting their services. One piece of advice from recent consumer articles was for patients to make clear upfront that cost is an important factor in medical care decision-making.

These articles have advised patients to ask for reduced rates if the bills are beyond their means. Experts say practices should be prepared to negotiate by following well-established procedures.

The goal is to have a consistent process to avoid violating government regulations and third-party payer contracts.

"You cannot just willy-nilly give discounts," said Elizabeth Woodcock, principal of Woodcock & Associates, a physician management and consulting firm in Atlanta.

The first step is to determine whether negotiation will be only with patients who lack insurance or, under some circumstances, with those who have coverage, especially the growing number who belong to high-deductible health plans. Changing fees for Medicare and Medicaid patients is impermissible.

Discounts on co-pays and deductibles for insured patients may be possible depending on the practice's contract with third-party payers. However, experts suggest an explanation rather than a lower price may be a better answer when insured patients discuss price. Private insurers generally pay less than a physician's fee schedule, but patients may not understand that.

"The contractual adjustment is the discount, but you have to talk to patients in their language, not our language," Woodcock said. "Practices are already extending a hefty discount. I would even use those terms."

Other questions to consider are: Who will handle the negotiating process in the office? Will financial need be a factor? If so, how will financial need be assessed? Will a patient's word be good enough, or will a recent tax form be required?

"It doesn't need to be the last three years of tax returns, but the staff need to ask some questions rather than making assumptions about ability to pay," said Jennifer Searfoss, principal and health care attorney with Searfoss & Associates in Annapolis, Md.

Practices should decide what discount is possible if a patient needs to spread payments over several months. What if a patient can pay part of the balance on the spot? A prompt-pay discount is common, because a medical practice saves money on billing if a patient takes care of a charge before leaving the office.

The amount of a discount that allows a patient to pay his or her bill but keep the office financially viable needs to be determined. Management consultants suggest that a practice not just look at its fee schedule but also analyze how much it costs to provide certain services.

"The practice needs to have a collection policy in place that tells the staff under what parameters they can negotiate," Dahl said. "And you need to know what a reasonable discount rate is. You need to be aware of the overall cost of providing care. How much does it cost to see a patient?"

The next step is to decide how these policies will be communicated. Practice management consultants recommend adding wording to signage or patient forms that says if a patient has difficulty paying a bill, he or she should bring the mater up with a staffer. Advertising specific discounts is not recommended, but the wording makes it the patient's responsibility to start a conversation.