Practice Management Alert

Question: We’ve had more and more out-of-network patients lately, but we’re a little worried about the compliance challenges that come along with these patients. Any advice?

Connecticut subscriber

Answer: If patients are visiting your practice out-of-network (OON), that’s likely a good thing. It may mean that patients are choosing to pay more to come to you due to your stellar reputation or the unique expertise you offer. Because payers usually pay OON claims at a higher rate than in-network claims, it often means increased revenue. But OON billing—healthcare provider billing without a payer contract—could also be a big liability, leading to increased denials and, more alarmingly, charges of false claims.

“To me, as a lawyer, out-of-network billing has become incredibly risky,” says Mary Jean Geroulo, MBA, JD, who spoke about the opportunities and pitfalls of OON billing at ASCA 2017. But by having compliant policies and procedures in place—and following them 100 percent of the time—you can protect your facility from allegations of improper billing and fraud when billing OON.

First, always fully disclose your OON status to patients. This should be done verbally as well as in writing. It’s simple to include an OON explanation form in your patient registration materials. Make every effort to inform patients of estimated payment obligations prior to their visit. Secondly, Geroulo emphasizes avoiding the “trifecta” of waivers/fee forgiveness, increased payer charges, and payments to referring physicians. Here’s what she recommends:

Waivers

• Make reasonable and consistent efforts to collect patient payments. Advise your physicians that you will collect patient payments unless the patient qualifies for a hardship or prompt pay discount. Physicians should not tell patients that any obligations will be waived.
• Have clear, written policies regarding hardship or prompt pay discounts. Ensure there is appropriate documentation in the patient record when applying these discounts.
• Never advertise that your facility will waive or forgive payments.

Payer Charges

• Be cautious about inflating your facility’s rates. “Charges that are grossly inflated compared to similar facilities tend to draw unwanted attention,” Geroulo warns.
• Use the same charge amount on claims as you do to calculate patient payments.

Referral Payments

• Be careful when contracting with marketing companies, especially those with physician entities behind them. Ensure the marketing company discloses what, if any, type of physician arrangement it has. If you are paying a marketing company a percentage of the revenue that their marketing generates, that could be interpreted as a kickback in some circumstances.

“The more egregious you are with [these] big three, the more likely you are to get pegged by the government or insurance company,” Geroulo notes. “It’s a good time for everybody to step back and look at how you’re doing [OON], and make sure you’re not committing any of these big errors.”