Practice Management Alert

 Sooner or later, most medical practices must dismiss a patient who simply refuses to pay his bill. And as if that wasnt bad enough, you could wind up paying in a big way if youre not careful how you handle this prickly situation.
 
Aside from being an unpleasant situation on a personal level, dismissing a patient is fraught with legal and professional peril as well. Physicians are caught between a rock and hard place when dismissing patients from their practices  theres the potential that the patient could file abandonment charges and also that your licensing board could level administrative action against you for what it considers to be unethical behavior, warns attorney Robert Wanerman with Reed Smith in Washington.
 
The problem of outstanding patient debt is particularly prevalent in surgical practices, notes consultant Catherine Brink, CMM, CPC, president of Healthcare Resource Management Inc. in Spring Lake, NJ. Thats because surgical practices often deal with large deductibles.
 
Regardless of your practice type, the first decision you must make is the point at which youll discharge a patient on financial grounds. In most cases, a practice wont dismiss a patient unless theres a substantial sum of money at stake, says Brink.
 
Most practices will hand over a patient to a collection agency before dismissing him, so you must also decide how much time youll give the agency to work the account before throwing in the towel  Brink suggests three months for large accounts (e.g., $1,000 or more). Your practice should establish these dollar and time cut-offs in your financial policies and procedures (see related story,"Do Financial Policies Stick....."), and they should apply equally to all patients.
 
Take a close look at your state medical societys rules when establishing these policies, Wanerman advises. Some states have strict requirements. For example, Texas doesnt allow its physicians to cancel an appointment for failure to pay, he offers. Similarly, look at your managed care contracts when establishing patient dismissal policies, because many contracts contain provisions about what a physician must do.
If the Checks Not in the Mail, Make Sure Your Letter Is  
Lets say a patient owes you $1,000 and the collection agency isnt getting the money, Brink offers. What do you do? First, you have to let the patient know hes being discharged from the practice  you cant simply drop him without a word. After giving notice, physicians must agree to provide treatment as needed in the meantime, explains Wanerman. Thirty days is usually plenty of time, but whats considered reasonable could vary from one context to another, he warns.
 
The best way to notify a patient that shes being discharged is in writing, Brink and Wanerman agree. If you want to give the patient one last chance to [...]