Practice Management Alert

One key is knowing which of your payers let you charge no-show fees.

With increasing deductibles, unemployment jumps, and the current economy affecting patients abilities to pay for services, you may be seeing more patients canceling appointments or simply not showing up.

If you dont collect for no-show appointments when youre allowed, your practice could see a significant reimbursement loss. Follow these expert tips to ensure you make the most of a potentially negative situation.

Develop a Set No-Show Policy

The purpose of a no-show policy is to notify your patients of a possible financial penalty for failure to cancel a scheduled appointment. Missed appointments have an impact on the physicians schedule or the physicians availability to other patients, and can also pose a health risk to the patient.

No show appointments cost the practice real dollars, says Nicole Martin, CPC,owner of Innovative Coding Analysis in Coplay, Penn. If you add up all the no-shows over a years time and calculate what the reimbursement would have been, it will likely be a significant dollar amount at the end of a year.

You need a written policy that includes information such as:

" If the patient needs to notify you that he is not going to show, and how long before the appointment you expect to be notified.

" Whether youll charge a fee, and how much that fee will be.

Example: Your policy could state something such as Failure to give 24-hour notice of cancellation of an appointment or not showing up for an appointment can result in a charge of $25.00 on your account. This charge is non-covered by your insurance company and is your responsibility. Failure to pay a no-show fee will be treated the same as our policy on unpaid patient balances and will be subject to reporting to a collection agency if unpaid.

Notification: Ask your patients to sign and date the form when they first join your practice, as they would do when they initially sign your privacy or financial policies. You can incorporate the no-show policy into your financial policy. If your practice does not send out new patient paperwork, including your financial policy,then you should explain the financial policy and noshow policy to the patient when he makes his appointment, Martin says. You should document the patient notification somewhere in the patient account,she adds.

You can warn patients that they have violated the policy by phone or in letter form. (See the sample warning/dismissal letters on page 36.)

Be proactive: Sending reminder notices or making appointment reminder phone calls can help alleviate someof your missed appointment concerns. Check to see if your electronic record systems will generate automatic phone or e-mail reminders.

Make exceptions: Not every missed appointment is the result of a poorly behaving patient. Emergencies do happen, so you need be somewhat flexible. If a patient misses an appointment because she is in the emergency room with her child, you probably shouldnt charge her.

One of the things about medicine is the obvious -- were dealing with people, not widgets, says Jean Acevedo, LHRM, CPC, CHC, president of Acevedo Consulting Inc. in Delray Beach, Fla. And weve all had a time that we just forgot about a meeting or appointment.Besides acknowledging the human nature component, the physician probably doesnt want to jeopardize the physician-patient relationship over one forgotten appointment. That first missed appointment, however,gives staff an opportunity to remind the patient of the practices policy to charge $25 or $50 for no-show appointments as well as to stress the clinical importance of keeping all scheduled appointments.

Watch for Payer Differences

Your first step in evaluating whether to charge a fee to patients who do not show up for appointments is to check with your payers. Read the details of your contract or contact your payer rep to see what limitations you may have on billing the patient.

Before implementing a fee for no-shows, it would be wise to check your managed care plan contracts for any clause that might prevent this fee from being charged to a particular plans members, Acevedo says.

Your contract may give you scenarios of when you can, and cant, bill for a no-show. For example, most payers will not allow you to charge a patient who cancelled her appointment more than 24 hours before the scheduled appointment time.

Note: You should also check your states laws to see if there are any laws prohibiting you from billing for noshow visits.

Medicare clarification: Medicare used to frown upon no-show billing. However, in Oct. 2007 CMS changed the policy and since then youve been able to charge Medicare patients if they miss an appointment -- with one major stipulation: Your no-show charge policy needs to apply to both your Medicare and non-Medicare patients. You cannot discriminate against Medicare patients by only charging them and not your other patients who miss appointments. You also have to charge the same amount to all of your patients.

Remember: Even if your contract allows you to bill for no-show visits, that doesnt mean you can bill the payer. You need to bill the patient for the missed appointment. If you do bill a missed appointment to Medicare, for example, your claim will be denied citing reason code 204 (This service/equipment/drug is not covered under the patients current benefit plan).

Make a Note in the Patients Chart

Good practice: When a patient does not show up for an appointment or cancels an appointment on short notice,you should make a note in her medical record. This gives you an accurate count of how many times a patient has been a no-show. Accurate documentation can help with any legal issues that arise if you end up discharging a patient from your practice or if the patient has a problem or complication resulting from their non-compliance related to their care, Martin explains.

Any practice implementing a no-show fee should develop an internal code that would be entered into the computer to track these, Acevedo recommends. If you are charging a no-show fee, the reason for doing this is obvious: The charge must get into the system for a bill to the patient to be generated.

Bonus: You will see additional benefits to tracking no-shows even if you arent charging the patient for the missed visit, Acevedo explains. For one, patient noncompliance creates a professional liability risk for physicians and these should be tracked both in the billing system and patients chart. The doctor needs to know when she has  the chart open that Mrs. Jones has missed three out of her last seven appointments, so no wonder her diabetes is not well controlled, she says.

Additionally, no-shows typically mean lost revenue for the practice, Acevedo adds. Reducing the number of no-shows is a great project to implement where it seems that there are too many of them. Unless you are keeping track of these no-show visits you wont know how big a problem this is, nor how well you are doing in trying to reduce the number of no-shows.

Weigh the negatives: Keep in mind that charging patients a no-show fee could have a negative impact on your patient relations and could result in negative PRfor your practice.