Getting Paid for Deductibles
The high cost of health insurance has contributed to a sharp rise in deductibles, which may range from $1,000-$5,000. For 2011, Medicare Part A deductible increased $1,132 and Medicare Part B for outpatient services increased $162.
High deductibles can decrease your cash flow, especially during the months of January through March. Patients, especially those who are out of work or on a tight budget, usually consider medical bills a low priority on their list of necessities.
However, even if it is legal, collecting deductibles up front may not be a good business practice. It could end up costing a practice more to collect up front and then have to refund them later in view of increased overhead, including clerical and bookkeeping expenses. For example, in processing a refund you will incur costs for:
- Staff time
- Checks and associated bank fees
- Paper and other supplies
These increased costs may exceed the benefit associated with requiring the up front payment of unsatisfied deductibles. When a physician accepts Medicare Part B assignment, Medicare Part B recommends:
“Since it is difficult to predict when deductible/coinsurance amounts will be applicable, it is recommended that providers do not collect the deductible prior to receiving payment from Medicare Part B because over-collection is considered program abuse. In addition, this practice can cause a portion of the provider’s check to be issued to the patients on assigned claims.”
Consider the following practice tips which may increase cash flow:
- Wait two or three weeks after the claims are submitted for the explanation of benefits to find out the exact amount of deductible owed by a patient.
- Don’t assume that the amount you determine at the time of service is the patient’s outstanding deductible as you may be surprised that the patient may have visited another provider or have some other medical charges submitted and applied to their deductible prior to the filing of your claim.
- Ask the patient about additional policies. The patient may have a secondary or supplemental insurance that covers the entire amount of deductible.
- Confirm the status of deductibles yourself. Most patients do not know what is covered under their plan and may give you inaccurate information.
- Contact the patient in advance and inform him or her of the amount due. If a patient is scheduled for an elective surgery, verify the patient’s benefits prior to the surgery. Obtain payment of the deductible balance or work out a financial arrangement for payment of the portion prior to performing the surgery.
- Make sure if you give discounts and/or write off amounts for financial hardships, that this practice is done across the board on a case-by-case basis. Do not make this a routine practice. Any fee reduction or write-off should be properly documented.
- Prevent scrutiny. You can be investigated for fraud if you do not bill for the deductible and/or coinsurance of a Medicare patient. You could lose your contractual arrangements with non-Medicare insurance carriers if you do not bill for the portion due from patients under their plans.
Do not bill the patient more than the fees allowed by Medicare or by non-Medicare carriers. There is no law that says how many times you must bill a patient before taking a reduction or write-off. So long as you can document that you have billed the patient, you should be safe in discounting or writing off a fee due to a genuine documented financial hardship.
By Delly Parham, AS, CPC