Frequently Asked Questions: Treating Patients in a Difficult Economy

Susan Shepard, MSN, RN, Director, Patient Safety Education; and Richard Cahill, Esq., Vice President and Associate General Counsel, The Doctors Company.

This article answers questions that our regional patient safety risk managers receive about serious problems that can occur when patients are unable to or don’t pay their co-pays or when patients refuse to pay their doctor charges.

  • When a patient is dissatisfied with care, can he or she dispute the charge with the credit card company?
  • A credit card customer can always request that a charge be questioned. Normally, when this situation occurs, the credit card issuer will open an investigation into the disputed charge. During the investigation, the card issuer may withhold payment of the credit charge amount to the doctor.

    Office practices need to exercise caution when interacting with credit card companies to ensure they don’t violate patient confidentiality required under federal and state law. In this situation, your patient safety risk manager can help you ensure that patient confidentiality is maintained.
  • What is the appropriate response when an established patient receives care but is unable to pay?
  • Talk with the patient first. Investigate why he or she isn’t paying the bill; e.g., is there dissatisfaction with the care? After your discussion, you can consider alternative financing options, including bill collection.

    It is helpful to have a written document summarizing the practice’s policy on financial matters that you give to each patient during the initial visit. A doctor has the right to expect payment for services rendered. The practice should have a policy and apply it consistently in a nondiscriminatory fashion. Often, signage at the reception desk indicating that payment is expected at the time of service is an appropriate way to notify patients. When you can, remind each patient that he or she received a copy of your policy at the time of the first visit. It makes handling nonpayment situations easier.

    If you decide to terminate the patient relationship for nonpayment, you must follow a formal process that includes giving the patient proper notice and treating emergencies in the interim. For more information, read our article “Terminating Patient Relationships.”
  • Can the doctor refuse to establish a doctor-patient relationship based on the patient’s inability to pay?
  • Yes, as long as the patient is not seeing you based on a referral from an emergency department (ED) where you were on call when the patient was seen. If that is the case, determine the requirements of the particular hospital as established in the hospital’s medical staff bylaws and rules and regulations. You must follow those requirements.

    At a minimum, it is likely you will be required to see the patient at least one time to determine the patient’s status and whether he or she has an emergency medical condition that qualifies under the Emergency Medical Treatment and Labor Act. If the patient is in need of emergent treatment, you will likely be required to provide the care regardless of his or her ability to pay, although you can ask for payment or payment arrangements.

    If the patient did not come to you as a result of an ED call and you have an established policy of not accepting patients who cannot pay, you can refuse to establish the relationship. Potential patients should be given some indication of your practice’s financial requirements when they make an initial appointment for treatment.

    We recommend that doctors include a disclaimer on their websites and on their data collection tools (e.g., preliminary healthcare and insurance questionnaires). The disclaimer should state that the practice does not consider an individual seeking treatment to be a patient until a preliminary assessment is completed and the individual has been notified that he or she has been accepted as a patient. Similarly, prospective patients should be advised at the outset that simply making an appointment does not automatically trigger the relationship.

    If the potential patient is not aware of your financial requirements, he or she may delay making other care arrangements while waiting for an appointment with you. If the patient then arrives for an appointment and you decide not to accept him or her for financial reasons, your decision can appear questionable if the patient is injured by the subsequent delay in receiving medical care.

    Having the biller check the status of coverage before a patient arrives for an appointment can expedite your decision about whether to accept an individual as your patient.
  • If a patient is dissatisfied with the result of an elective procedure and demands a concession (e.g., a free revision, a refund, or a discount) or refuses to pay credit card charges, what recourse does the doctor have?
  • Selecting the correct patient, providing very thorough informed consent, and keeping the lines of communication open is the best defense against patient dissatisfaction. However, if a patient who is dissatisfied asks for compensation, contact your patient safety risk manager for help in evaluating the situation from professional liability and compliance standpoints. In some situations, making a concession may be viewed as a courtesy gesture and may be a positive factor in the defense of a claim. Other situations may warrant the use of a Release of Claims form.
  • What factors should I consider when choosing a commercial credit company to provide a line of credit to my patients? Where can I find a reputable company?
  • Some commercial credit companies hold the doctor responsible if the patient defaults on a payment. Before using a commercial credit company, read the contract carefully to make sure you won’t be liable for a patient’s outstanding balance.

    You should also be aware of your state’s consumer protection laws regarding lending and disclosure, and make sure that your patients understand the terms and conditions of the financing.

    Your bank, local medical society, or professional society can help you locate a commercial credit company.

Patient Safety Tips

  • Make sure your office staff recognizes correspondence regarding disputed credit card charges and brings all notices to your attention promptly. It is necessary to make a response that is in accordance with federal and state privacy laws.
  • If you accept credit cards for payment, you may want to consider setting a limit on allowable credit card charges. The limit can be a percentage of the total treatment charge or a dollar limit; e.g., $3,500, $5,000, or not more than 50 percent of the procedure cost.
  • Payment plans should be in writing and signed by the patient.
  • Be sure to obtain a reference for credit applications. This will ultimately assist you in locating the patient if the account needs to be sent to a collection agency.
  • Put a time limit on any adjustments or revisions to the original procedure (such as 60 or 90 days from the procedure date). Otherwise, a patient could come in years later and request a revision that was discussed when the procedure was first done.
  • Identify poor payers early on and deal with the problem. Do not wait until the situation reaches a crisis point and puts your doctor-patient relationship at risk.
  • Make sure you select a reputable collection agency. There are very specific state laws dealing with fair debt collection. A doctor who selects an agency that violates state laws could face liability for negligent selection.
  • It is always good practice to resolve financial disputes in an amicable and professional manner. Maintaining a good doctor-patient relationship can help you avoid negative comments posted on the Internet or retaliatory lawsuits for medical malpractice.

The guidelines suggested here are not rules, do not constitute legal advice, and do not ensure a successful outcome. The ultimate decision regarding the appropriateness of any treatment must be made by each healthcare provider considering the circumstances of the individual situation and in accordance with the laws of the jurisdiction in which the care is rendered.

J9501 11/13

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