Practice Management Alert

Prevent hundreds of dollars from running out the door with these expert tips.

There are some insurance companies that your practice just doesn't want to participate with. So, if your physicians are seeing patients with insurance you do not par with, how can you ensure that your practice still gets paid?

The problem: When you are a non-participating provider with a payer, the patient directly receives the check from the insurance company. But some patients do not, then, use those funds to pay the bill your practice sends. What are your options? According to the experts, you have four.

Since you know that your practice does not participate with the patient's insurance company, you also know that the payer will send the check directly to the patient. Therefore, you can collect the fee for your services directly from the patient while he is in your office.

Post your policy: You need to ensure that your patients know they are responsible for paying for non-covered services. The practice policy should appear in the financial policy you give all patients. Additionally, you should put up a sign in the waiting area stating that payments are due at the time of service. You should also try to let patients know when they make their appointment and when you call with a reminder what they will owe for the visit, as well as the payment methods your practice accepts.

"We explain to the patient that the reason for having them pay at time of service is they have chosen to see a non-participating provider, and the insurance company will almost always send the payment directly to the patient since there is no contractual obligation to pay the provider," explains Lori Braidic, billing manager for Women's Care Center Of Columbus in Ohio. "We will give them an itemized statement for that visit that they [the patients] can submit to their insurance company for reimbursement. We are not contractually obligated to bill it for them either."

Caveat: This method won't work for all practices because up-front collection isn't always possible.

"It's hard to obtain payment at time of service when the patient doesn't come to your office," says Alice Wonderchek, CMBS, CPC, billing and coding specialist for Franklin & Seidelmann Subspecialty Radiology in Ohio. "I code and bill for a radiology group, strictly professional component." Her radiologists often interpret and report on radiological studies that other facilities have performed; the patients themselves do not visit the practice. "Our only option is to turn over to collections if the patient refuses to send payment after acknowledging cashing and spending or saving the money."

If you opt not to collect at the time of service, your next option is to send the patient's account to a collection agency, to small claims court, or even to the Internal Revenue Service (IRS). Do not be afraid to use a collection agency whenever a patient owes you money and refuses to pay you.

Good practice: Write a letter or a form that states the patient will receive payment from the payer and therefore the patient will be responsible for paying the bill. "When the patient arrives at the office, give him a letter regarding the payer payment," suggests Kathy Philp, CPC, director of physician services at Praxis Health Group in Oklahoma City. "Have him sign and date the letter, and then put it in the patient file."

The letter should state that the insurance company will be sending the patient the payment, therefore, making him responsible for the services provided. The patient will then need to pay services in full at the time of the visit or arrange to make payments, Philip adds. "Once the patient leaves the office and several attempts have been made to try to collect with no response from the patient either by phone or by mail, then turn the patient over to a collection agency or take them to small claims court," she advises.

If you do not collect payment at time of service for whatever reason, you can submit the claims to the payer accepting assignment if the patient agreed to allow you to accept assignment, even though you do not participate with that payer.

The patient will have to sign a form allowing you to accept assignment, and that form should be part of your standard initial patient packet, says Barbara J. Cobuzzi, MBA, CPC, CENTC, CPC-H, CPC-P, CPC-I, CHCC, president of CRN Healthcare Solutions, a coding and reimbursement consulting firm in Tinton Falls, N.J., and senior coder and auditor for The Coding Network.

How it works: "If the payer is Medicare and you do not participate, you will be paid less if you accept assignment, but you will be guaranteed to get paid and not have to worry about collection," Cobuzzi explains. "Other third-party payers will pay the practice the same as they would have paid the patient, and you will only have to balance bill the patient and perhaps have to send them to collections or small claims court for her deductible or coinsurance (copayments). And still other third-party payers, for example Horizon Blue Cross Blue Shield of New Jersey, will not pay a physician even if the claim has an assignment of benefits to the physician." In a situation like this, you will not be able to accept assignment and will need to look at one of the other three options.

There are times when it may not make sense to send a patient's account to collections. Your practice should regularly evaluate the payers you contract with (and don't contract with) as well as your patient base. You may find in some cases that participating with a particular insurance company will save the practice time, money, and headaches in the end.

"It's unfortunate, but sending them to collections or small claims court cuts the amount you would get almost to the point that it may be worth participating with the insurance companies," says Robin Yazell, CPC, billing supervisor at Cardiology P.C. in Syracuse, NY. "I know I-d much rather fight the insurance companies to get our money than fight with the patients. In this economy I-m afraid collecting from patients will only get worse."

A possible way around: While you may be concerned that sending a patient to collections will ultimately just cost your practice money, don't let that notion necessarily prevent you from attempting to collect. One way to overcome this challenge is to include a statement in your financial policy that says the patient is responsible for the associated fees if his account goes to collections.

However, you can only do that if:

- your state allows that practice;

- you make it clear to the patient up front when he signs the financial agreement with the practice that adding the collection fee is part of your policy; and

- the contract with the collection agency allows it.

"If you have the patients sign a financial agreement (which we have on our registration/demographic sheet) that states they will be responsible for any cost incurred by the collection agency/attorney, you can receive full payment for services rendered, and they [the patients] pay the collection agency fee," Braidic says. "The laws may vary from state to state but it is worth checking into."

Caution: "Before you consider participating with the payer, look at your operations," Cobuzzi says. "Are you sending patients to collections because you are not doing a good enough job of collecting at time of service and you could put better processes and procedures in place? Or are you putting patients in collection because you don't have the opportunity to collect at time of service because you have such a large hospital-based patient base? If the second is true, there may be a case to consider participating. If the first is the case, evaluate your processes, your training, and your communications with your patients."