Practice Management Alert

Avoid legal hot water by knowing when you can collect on Medicaid and workers' comp patients

You shouldn't allow patients awaiting workers' compensation or Medicaid benefits - or the settlement from a personal liability case - to leave your billing department hanging.

Read these two questions to see if you know the correct collections choice:
 
Question #1: We are a surgical practice in Illinois that often treats patients who have been involved in a liability case or a denied workers' compensation case. If the patient has personal insurance, do we have to bill this before sending him to collections?

We also have patients come to us from Indiana where the workers' comp carrier denied coverage. Can we legally send these patients to collections? An attorney in Indiana once sent us a letter stating we had to stop collections efforts or the patient would sue. Do state laws dictate which patients a provider can send to collections?
 
Question #2: Our provider treated a patient who has retained an attorney to help him pursue Medicaid benefits. Do we have to wait for payment until the patient's Medicaid benefits are established, or can we send the patient to collections now?
 
Answer: Don't be tricked by federal payment programs that have state-specific laws governing benefits and collections procedures. Here's the expert answer to this month's state-specific collections questions:

You Can't Always Collect on Workers' Comp Patients

Answer #1: Billing for workers' compensation cases and personal liability cases depends on state law, says Wayne Miller, founding partner of the Compliance Law Group in Los Angeles. You should always "check local laws first before pursuing a patient who may have rights under [workers' comp] or in an accident," he says.

Best practice: Patients who are involved in workers' comp or personal liability cases may still have coverage under their personal insurance plans, so it's a good idea to always bill the patient's personal insurance first to determine whether there is any coverage. Then you can send the patient to collections if need be, Miller says.

Collection law: In most cases, you can legally send a patient to collections who is involved in a personal liability case and awaiting settlement. Workers' comp cases can be more complicated, however. State workers' comp authorities should be able to assist you in identifying when it is appropriate to pursue a patient through collections, Miller says.

For example, even if workers' comp initially denies a patient coverage, the patient may appeal and certain laws may preclude the patient from collection efforts while the appeal is pending, he says. "Once a patient has exhausted all appeals, it may then be appropriate to pursue collections" - but again, you should first consult state law, he says.

Check State Medicaid Guidelines First

Answer #2: Although Medicaid is a federal program, each state's law determines its specific implementation, Miller says. When a patient is trying to establish benefits, "a state may have procedures that tentatively recognize the patient as eligible for Medicaid while final benefit determination is pending," he adds.

Best practice: You should review state law to determine if the patient's benefits status means you must treat him as a Medicaid patient for billing purposes. If this is the case, you must not engage in collection efforts until Medicaid makes a final benefit determination, Miller says. And being proactive is your best defense against this type of situation. Check on the patient's coverage or obtain precertification before you treat him.