When You Can and When You Cant:
Writing Off Co-Payments, Deductibles, and More
Published on Tue Jun 01, 1999
Perhaps a Medicare patient has come in for an eye examination, including 92015 (determination of refractive state), and says he cant pay for that part of the examthe only part of the visit which Medicare doesnt cover. Or, maybe a mother brings a child in with a speck of rust in the eye (65222, removal of foreign body, external eye; corneal, with slit lamp), and the mother is furious because the familys HMO has a $200 surgical deductible for a nonparticipating physician, and says she cant afford to pay. The examples are varied and go on and on, but the question for the biller always comes down to this: When should you write off these charges, and under what circumstances?
The answer is basically never. For commercially insured patients, you must always collect the co-payments and deductiblesthis is a contract issue. This is also true for Medicare patients, but there is one exception: if the patient cannot afford to pay due to financial circumstance and has signed a financial hardship statement, says Jane Bernheim, director of operations for the Department of Ophthalmology at New Jersey Medical School in Newark, where there is a full-time ophthalmology physician staff of 12. This is typically a letter, written and signed by the patient, which states the nature of the financial hardship and that the patient cant afford to pay.
If the patient is a Medicare patient, you have to have made a reasonable attempt to collect the money from the patient before writing it off, and you must obtain a financial hardship letter. First, you make a reasonable attempt to collect. The definition of reasonable is up to the individual practice. Your collection efforts have to be consistent across different patient accounts and payers.
Many practices use three months as a rule of thumb. Then, after taking steps to determine that the patient is unable to pay the bill due to financial circumstances, you can get a financial hardship letter from the patient/guarantor.
The financial hardship letter isnt something that you can do as a routine matter, Bernheim stresses. It must be based on an evaluation of an individual patients financial need after they have demonstrated an inability to pay the bill. You cannot have a standing letter which covers services for an indefinite period of time. Each time you waive a co-payment or deductible you must have a statement of financial hardship from the patient. Also, if Medicare audits you and you have a financial hardship letter in every file, youre going to have a problem. This has to be an exception to the offices normal protocols for a specific date of service.
Also, as a practice management issue, financial hardship letters should be [...]
