Patient Billing Challenges: Frequently Asked Questions

Susan Shepard, MSN, RN, Senior Director, Patient Safety Education; and Richard Cahill, JD, Vice President and Associate General Counsel

This article answers common questions about serious problems that can occur when a patient is unable to or doesn’t pay a copay or when a patient refuses to pay a bill for services provided.

  • 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. For patients who prefer to pay by credit card, one approach is to require them to execute an authorization to release protected health information (PHI) before you render services. In the event of a billing dispute, the PHI authorization will allow you to release information to the credit card company.
  • 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 a monthly repayment plan and 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. Additionally, post a similar notification on the practice website to reinforce the importance of the policy.

    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 hospital’s requirements as established in its 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 status and whether the patient has an emergency medical condition that qualifies under the Emergency Medical Treatment and Labor Act. If the patient needs emergent treatment, you will likely be required to provide care regardless of the 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. Give potential patients some indication of your practice’s financial requirements when they make an initial appointment for treatment. In addition, posting a notification on your practice website helps communicate the policy and avoid any subsequent disputes or misunderstandings.

    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 may 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.

    We also recommend that doctors include a disclaimer regarding the doctor-patient relationship on the practice website and on 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 concluded, and the individual has been notified that he or she has been accepted as a patient. Similarly, advise prospective patients at the outset that simply making an appointment or returning a completed health questionnaire does not automatically trigger the relationship.
  • 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 are the best ways to defend against patient dissatisfaction. If, however, 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. Payer-provider agreements often specify the circumstances under which a refund or waiver of some portion of a bill is permissible.
  • 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 a 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, and consider consulting your corporate or personal counsel for guidance.

    Be aware, too, 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 may be able to help you locate a commercial credit company that specializes in these types of arrangements.

Patient Safety Strategies

  • Ensure your office staff recognizes correspondence regarding disputed credit card charges and brings all notices to your attention promptly. The inquiries often have a specific deadline for responding, and failure to comply with the deadline may impair your ability to collect the outstanding balance. 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 charges. The limit can be a dollar amount or a percentage of the total treatment charge; for example, $3,500, $5,000, or not more than 50 percent of the procedure cost. You may also want to consider requiring the patient to sign an appropriate HIPAA-compliant authorization prior to the procedure or treatment to ensure that you can provide the credit card company with any information requested regarding the nature and scope of the service in the event of a subsequent dispute.
  • Payment plans should be in writing, signed by the patient, and witnessed by an employee of the practice.
  • 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 specific time limit on any adjustments or revisions to the original procedure (such as 60 or 90 days from the original procedure date). Otherwise, a patient could come in years later and request a revision that was discussed when the procedure was first done.
  • HIPAA privacy rules permit the use of collection agencies to recover payments for healthcare services. The privacy rules require that medical offices disclose only the minimum information necessary for such purposes.
  • Make sure you select a reputable collection agency. States have very specific laws about dealing with fair debt collection. A doctor who selects an agency that violates state laws could face liability for negligent selection and risk any chance of recovering some or all of an outstanding bill.
  • It is always good practice to resolve financial disputes in an amicable and professional manner. Clear communication of financial responsibility is critical.
  • Identify poor payers early and deal with the problem proactively. Do not wait until the situation reaches a crisis point that jeopardizes your doctor-patient relationship and creates a risk of adverse comments on social media. Maintaining a good doctor-patient relationship may help you avoid negative comments posted online 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.

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