Orthopedic Coding Alert

Save time, effort by learning the downsides of up-front collection.

Collecting deductibles from patients has never been more difficult -- between determining whether the patient has secondary coverage and seeking answers on whether she's already met her deductible, you could lose an hour of your time. Payer confusion and differing rules only add more difficulty to the process -- and more headaches to your day.

But if you follow these expert answers to two of the top questions about collecting deductibles, you can determine if up-front collections are right for your office. Here's how.

One of your payers tells you that you are performing an illegal act by collecting a deductible from a patient before you receive an EOB from the insurer. Is the payer correct in this statement?

"No," says Joan Gilhooly, CPC, CHCC, president of Medical Business Resources, LLC.

Compliance answer: "From a compliance standpoint, if the practice knew without a doubt that the patient's deductible had not been met, there is nothing that prohibits the practice from collecting it at the time of service prior to sending the claim to Medicare," Gilhooly says.

Good business sense: Even though it's legal to collect a patient's deductible at the time of service, it may not be a good business practice.

"In the distant past, people may not have had secondary payers, and it may have made good sense to collect the deductible in January," Gilhooly says. "But now that Medicare pays so promptly and so many people have secondary plans, it's very uncommon to find someone whose deductible you need to collect up front."

Secondary payers will usually pay you the cost of the patient's deductible, and the secondary payment often arrives at your office before you even receive your Part B reimbursement, Gilhooly says.

Information available: Insurance verification services now make it possible for practices to find out if a patient has met his deductible yet. Some services can tell you how much of the deductible remains unpaid. Because this information is available online, your practice can get this information last-minute, the day before, or the day of the appointment.

"Some practices collect the deductible up front as a rule, especially if they see the patient early in January, and then figure they-ll just issue a refund later if necessary," says Jay Neal, a coding consultant in Atlanta. "But generating all of those refunds can be a headache when February rolls around," Neal adds. This approach can also be costly for your practice.

The cost: What you collect from the patient up front probably isn't as much as you-d spend processing a refund, Gilhooly says. "Given the extraordinary expense of processing refunds, I generally recommend that practices don't collect the deductibles. Instead, they should simply wait the two weeks (assuming electronic claims filing) to find out if the patient really does owe any money," she advises.

Even if you can predict what the Medicare EOB will say (which is nearly impossible), the odds of knowing whether the patient will owe you her deductible get worse and worse every day after January 1.

"And that's before you start to factor in the implications of the patient having a Medigap policy you weren't aware of that would have picked up the deductible for the patient in the first place," Gilhooly advises.

Example: Suppose you see a patient on Jan. 15. She tells you that she hasn't seen any other physicians yet during the year. She also mentions during the history portion of the E/M visit that she performs her glucose test daily and that she just received a new box of glucometer strips the day before, so she is prepared to continue testing her blood sugar.

Although this patient has not seen a Medicare physician, she probably did pay some money toward her deductible when she ordered the glucometer strips.

Remember: "The deductible accounts for all services, including durable medical equipment (DME)," Gilhooly says. "I once did the billing for a practice that collected a deductible from every single patient they saw from Jan. 1 through Feb. 1," Neal says. "It was their policy, and they had no intention of changing it -- until we had to bring in a temp for a month to help us process all the refunds."

Possible solution: If you-re able to take advantage of real-time claims adjudication (RTCA), you won't have to worry as much about whether you-re collecting the proper amount. Faster patient collections top the list of pros for using RTCA.

You also may want to check with your benefits verification services, as some offer real-time information on how much of a patient's benefits have been used to date, the deductible to date remaining, number of hospital days remaining, SNF days remaining, and if the patient has Medigap coverage.

Bottom line: Determine whether collecting that deductible is really worth your while from a business standpoint before you ask the patient to pay it at the time of service.