Dealing With Deadbeat Patients and Insurance Companies "Increasing Collections & Mitigating Risk"

Many years ago I contributed this article to BC-Advantage ( September of 2007) because we were seeing such incredible struggles in medical practices who were hiring us as consultants to fix their issues. What I wrote about back then holds true today... through all of the interviews with healthcare professionals especially those responsible for direct patient interaction the guidance provided in this article still hold true! I have made some changes to this article to ensure it is right in-line with what we are dealing with specifically in 2016...

By: Sean M. Weiss, Partner/DoctorsManagement, LLC, Copyright 2016

As an industry I believe we are and will continue to struggle with the collections from our patients and insurance companies until we realize how we need to go about doing it the right way. I personally believe 80% if not more of medical practices in the United States are struggling with this component of their practice. Asking for money from patients can either be the scariest part of your job or the part you most you most enjoy depending on how passive or aggressive you are. Collecting monies owed by insurance carriers is a rough go as well and requires you to be on your “A” game to succeed. The first part of this article will deal with collecting from the patients and then we will turn our attention to collecting from the payors as well as ways to reduce denials.

While asking for money is never an easy task it is still one that is an absolute necessity. Failure to ask for money a patient owes the practice could lead to a breach of your participation agreement as well as potentially creating a False Claim to the insurance carriers.

Many patients believe their coinsurance is optional. Many patients also believe your providers’ make enough money that they do not need the extra $20, $30 or more dollars that make up co-payments. If only your patients knew what a financial hardship your practices were facing they might be a little more inclined to pay their portion of the bill.

One of the areas in health care that makes me chuckle is the cosmetic aspect. Many practices over the past few years have sought other ways to make up for lost revenues. One of the ways they have achieved this is through adding ancillary services to their service mix. Take for example the Obstetrics and Gynecological practice that now offers weight management and laser hair removal or skin resurfacing. Interesting enough that these services are completely cash up front before you ever are taken back for the services to be provided. The best part when you look at the clientele is the patients who are lined up to pay cash for these cosmetic services usually totaling in the hundreds of dollars each visit are the same patients who gripe and complain when it comes to paying their coinsurance or their deductible.

The really sad part is we allow patients to dictate how we run our practice. We have allowed this behavior for years. Many times when the person at checkout asks a patient to pay their co-payment they duck as soon as the words come out of their mouth so as not to be hit by a thrown object. The other way we deal with patient co-payments is by saying to the patient would you like to pay now or should we bill you? What on God’s green earth do you think they are going to say? “By all means, bill me!”

Now, I know there are those of you out there who say, “Not my practice Cowboy!” I totally believe you because I have seen how some of you handle your patients. You have what I refer to as the bull dog sitting at the check out area and when a patient tries to leave without paying their portion they attack like a dog going after a piece of raw meat! You know the type, as a matter of fact you are probably laughing right now saying, Yep, that is me.”

Where does the biggest problem lye in our practices? The Physicians of course! What do most of your physicians say when a patient gripes or complains to them about what they are having to pay out of pocket to come and see them? “Don’t worry about it, I’ll handle it! This is the beginning of the end. This is where you the practice manager and your staff charged with the responsibility of collecting from the patients get discredited.

Here is Sean's "Golden Rule" regarding collections, you ready for this? Get your highlighters and pens ready because this is the pay-off for the entire article. Here it goes, “Never let a physician get involved with a patient face to face or on the phone over finances, period, the end!” When they do it forever alters the physician/patient relationship and they can never get that back. APPLAUSE ARE WELCOME AT THIS POINT!!!!

Health care has been and continues to spiral out of control. With stagnant and in most cases declining reimbursements over the past decade the potential of further reductions in reimbursement moving forward is absolutely possible and now more than ever it is critical for your staff to make every effort possible towards collecting patient co-payments and deductibles!

Can you ever waive a co-payment and/or a deductible? Now I am not asking about once in a blue moon, I am asking about routinely waiving co-pyaments and/or deductibles. Of course you can but at what risk. The real answer to the question I posed above is yes but with some restrictions. Routine waiver of deductibles and co-payments by charge-based providers, practitioners or suppliers is unlawful because it results in (1) false claims, (2) violations of the anti-kickback statute, and (3) excessive utilization of items and services paid for by Medicare.

A provider, practitioner or supplier who routinely waives Medicare co-payments or deductibles is misstating its actual charge. For example, if a supplier claims that its charge for a piece of equipment is $100, but routinely waives the co-payment, the actual charge is $80. Medicare should be paying 80 percent of $80 (or $64), rather than 80 percent of $100 (or $80). As a result of the supplier's misrepresentation, the Medicare program is paying $16 more than it should for this item.

In certain cases, a provider, practitioner or supplier who routinely waives Medicare co-payments or deductibles also could be held liable under the Medicare and Medicaid anti-kickback statute. 42 U.S.C. 1320a-7b(b). The statute makes it illegal to offer, pay, solicit or receive anything of value as an inducement to generate business payable by Medicare or Medicaid. When providers, practitioners or suppliers forgive financial obligations for reasons other than genuine financial hardship of the particular patient, they may be unlawfully inducing that patient to purchase items or services from them.

Now, I am going to take a little bit of help from our friends at the Office of Inspector General for this next part on helping you to identify what is considered “ The Routine Waiver of Co-payment and/or Deductibles:

To help you identify charge-based providers, practitioners or suppliers who routinely waive Medicare deductibles and co-payments, listed below are some suspect marketing practices. Please note that this list is not intended to be exhaustive but, rather, to highlight some indicators of potentially unlawful activity.

• Advertisements which state: "Medicare Accepted As Payment in Full,'' "Insurance Accepted As Payment in Full,'' or "No Out-Of- Pocket Expense.''
• Advertisements which promise that "discounts'' will be given to Medicare beneficiaries.
• Routine use of "Financial hardship'' forms which state that the beneficiary is unable to pay the coinsurance/deductible (i.e., there is no good faith attempt to determine the beneficiary's actual financial condition).
• Collection of copayments and deductibles only where the beneficiary has Medicare supplemental insurance ("Medigap'') coverage (i.e., the items or services are "free'' to the beneficiary).
• Charges to Medicare beneficiaries which are higher than those made to other persons for similar services and items (the higher charges offset the waiver of coinsurance.)
• Failure to collect co-payments or deductibles for a specific group of Medicare patients for reasons unrelated to indigence (e.g., a supplier waives coinsurance or deductible for all patients from a particular hospital, in order to get referrals).
• "Insurance programs'' which cover co-payments or deductibles only for items or services provided by the entity offering the insurance. The "insurance premium'' paid by the beneficiary is insignificant and can be as low as $1 a month or even $1 a year. These premiums are not based upon actuarial risks, but instead are a sham used to disguise the routine waiver of co-payments and deductibles.

Now that we have talked about the importance of collecting these patient amounts let’s now, talk about some techniques:

1. Be assertive with your patients (eg. Mr. Jones, you have a coinsurance of $25.00 for today’s visit, how would you like to pay, Cash, Check, or Credit Card?)
2. Avoid being passive (eg. Mr. Jones, you have a coinsurance of $25.00 for today’s visit, should I bill you or can you pay it today?)
3. Never insult your patients
4. Educate your patients on the importance of paying their coinsurance and/or deductible amounts.
5. Provide all patients with a welcome to the practice brochure that outlines your practices policies….

There are many more techniques to use but because of space limitations we will stop there for now.

Let’s change our focus now to the insurance carriers and how best to deal with monies owed you by them as well as how to reduce denials of claims. The first thing you need to realize is this, the more you appeal your denied claims the less likely they are to deny them in the future for bogus reasons. Most practices think they made the mistake when they get a denial from a carrier. That is just not the case. Approximately 30% of all claims submitted to an insurance carrier on the initial submission are denied whether they are correct or not. They do this because less than 25% of all medical practices in the U.S. appeal their claims. That figure just blows my mind.

So, what are some steps you can take to reduce denials when billing to insurance carriers?

1. Make sure you are using the most current versions of the CPT, ICD-9CM and HCPCS Level II manuals
2. Ensure the proper usage of modifiers on your claims where appropriate
3. Utilize the Correct Coding Initiative (CCI)
4. Use the Internet to search for policies from the various carriers (many post them online, which most in our profession do not even recognize they do. Google is great for this type of search function.)
5. For those payers with a formal appeals process such as the Federal and State programs, know your appeal rights and the various steps involved with the process.
6. When you have done all the battle you can with an insurance carrier get in touch with the Department of Insurance. This is not the same as going to your Insurance Commissioner.

We live in a world of uncertainty when it comes to dealing with reimbursement from insurance carriers, which is why we have to be diligent in our efforts to collect monies owed us. Keep in mind insurance carriers are in the business to make money, bottom line! Regardless of what any one tells you that is the truth. Why do you think the highest paid CEOs are those who run the big insurance companies.The “Bottom line” is what matters! That is the reason so many carriers require you to do pre-authorizations. It is so they can control the costs and ensure profits are high for share-holders.

Don't allow yourself or your staff to continue being complacent or unwilling to do the necessary to ensure your practice continues to thrive.

Sean M. Weiss is a Partner with DoctorsManagement, LLC. Sean is a Nationally recognized speaker and published author with more than 20-years of service time in the healthcare industry. For more information on this topic or to schedule time to discuss your practice or organizational needs with Sean you can contact him at [email protected] or at 1-800-635-4040.