Practice Management Alert

If your surgical practice is in a market that has high insurance deductibles or coinsurance amounts, offering patients a surgical cost quote before the procedure may help you avoid being stuck with the bill later.
 
Providing patients a cost estimate of the professional component of their surgery can help them better understand their financial responsibilities, and help the practice identify potential collection issues before they become problems, says Sarah Wiskerchen, MBA, an associate with Karen Zupko and Associates, a consulting firm based in Chicago.
 
The cost quotation process begins after the patient is seen and the decision is made for surgery. The practice's surgical specialist or surgical coordinator calls the patient's insurer to precertify the procedure and verify the patient's eligibility and benefits. "If I came into your practice and was going to have surgery," Wiskerchen says, "the practice would confirm with the insurer that I have this plan, my identification numbers and benefit level. You would find out whether I have a deductible and what the amount is. You would also ask how much of my deductible has been met, and what the coinsurance is."

Use the information to prepare a cost quote for the patient. The surgical cost quote is a worksheet that a practice can develop and fill out which states the proposed procedure, fee and patient's insurance information. For example, the form would list the practice's charge, the plan's allowable for the service, what the noncovered services are and their charges, the deductible and its amount, the coinsurance and its amount. The sheet contains a calculation of the patient's estimated financial responsibility.
 
The written cost quote is discussed with the patient, often during the visit when the procedure is discussed in detail, preoperative and postoperative instructions are supplied, and a surgery date is scheduled. In some practices, the surgical coordinator calls the plan to gather the cost quote information while the patient is in the office so the patient can discuss coverage and benefits directly with the insurer. Practices need to point out to patients that the cost quote is just that an estimate based on a normal surgical procedure performed by the physician. The physician's actual charge may be more or less than the quote, depending on what occurs during the surgery, such as the doctor discovering new or different medical circumstances during the surgery, or complications.
 
After the surgical cost quote is presented to the patient, practices should ask for a deposit. How much the deposit should be depends on the practice. "This is where the practice can be flexible on what its policy is. There is no hard and fast rule about how much of a deposit should be requested," Wiskerchen says. "Many practices will ask for 50 percent on any expected patient portion. Others may say 20 or 25 percent. It depends on the situation and the total amount the patient will owe."
 
Getting a deposit before surgery commits the patient to the procedure and payment, she adds. "This also helps practices to be sure they do not get stuck with uncollectible patient-responsibility amounts," she says. "If it turns out the patient cannot afford the surgery, financial arrangements can be made before the procedure. You could work with patients at this point to set up a budgeted payment plan. If there is a potential problem, you'll find out up front, instead of sending unanswered bills and statements, or patients saying they never would have had the surgery at this time if they had known the cost."

The surgical cost quote should work with your practice's financial policy. "You would explain what the payment requirements are for surgery as part of the financial policy that patients receive when they first come to the practice, so they understand what their responsibilities are," she says. The practice also needs to have a credit balance reviewing process. If the insurance company pays more than expected, the patient receives a refund immediately. "If a credit is created, you don't want to be sitting on that money," she says. Practices have a legal obligation to refund overpayments, and failing to do so can be considered fraud.
 
Some practices argue that giving surgical cost quotes and requesting deposits up front is unnecessary because the hospital will submit its claims first, and it will hit the patient's deductible. The hospital will have to collect the deductible from the patient. The practice doesn't need to worry about getting a deposit up front to cover any unmet deductible. But you don't know what the hospital billing timing is going to be, Wiskerchen says. "So, why not start with a more conservative approach, like a 20 percent deposit, and offer the patient the guarantee that if the claim comes back paid in full by the insurer or the patient responsibility required by the plan is less than expected, you will issue a refund to them immediately?" she says.
 
The cost quote benefits patients by taking some of the surprise out of how much surgery will cost them. It benefits the practice by helping patients understand their financial responsibility. However, the cost quote does not cover hospital costs related to the surgery or anticipate the hospital's bill. You need to explain that to patients when discussing their financial responsibilities, says Susanne M. Byrd, business manager of Podiatry Associates of Wausau in Wausau, Wis.
 
Byrd's practice gives patients written cost estimates before surgery and asks them to check with their insurance companies to find out how much of the fees will be covered, whether a second opinion is required, and whether preauthorization is necessary. "Prior to surgery, we estimate our fees. But we tell patients that this is the doctor's fee only. It does not include the hospital or surgery center costs or supplies, the anesthesiologist, or lab work. And, if patients ask about those other fees, we tell them to contact those providers. We want our patients to be informed, rather than find out afterwards that there are all these bills," she says.