Q&A: An option for dealing with slow third-party payments

February 20, 2009

It is possible to bill patients up front for the cost of treatment to get around slow third-party payments. But there is a lot to consider before going this route.

Q: We have seen a significant slowdown in third-party payments. We are contemplating whether to implement a policy of collecting payment from all patients at the time of service, regardless of coverage, and refunding the difference once the insurer pays. Are there any legal or regulatory issues to consider?

A: Medicare and many private insurers prohibit collecting more than the copayment and deductible amounts from the patient. However, if you're in a market where there is not a lot of managed care, and the contracts you have signed don't prohibit billing patients directly, this course of action is possible. Your front-desk staff will need resources that indicate which insurance companies allow you to bill the patient, as well as limits to the agreed-upon fee schedule. You will most likely not be able to collect more than what you agreed to in the schedule. Your healthcare attorney should review your insurance contracts to identify plans where up-front payment is possible, then you should create a resource list for your front-desk staff to use in collection and set up a system so that refunds are processed promptly.