Getting Paid by the Self-Pay Patient
Neda M. Ryan, Esq.
Corporate Compliance Attorney, Anesthesia Business Consultants, Jackson, MI
Christopher J. Ryan, Esq.
Giarmarco, Mullins & Horton, PC, Troy, MI
The number of self-pay patients continues to rise. The term “self-pay” used to apply primarily to the population of individuals who are uninsured; now, the term continues to expand to also represent the insured population with high deductible plans. Some in the community call self-pay “no pay” because collecting payment from these individuals can be extremely difficult. Unfortunately for healthcare providers, medical debts do not rise to the top of many consumers’ priority lists, especially if money is tight. They often fall behind items like mortgages, car payments and credit card bills. To address this situation there are two options: either eliminate self-pay patients from a practice altogether (which is not feasible for most anesthesiologists), or take the right steps early on to increase a practice’s likelihood of being paid. This article will focus on the latter option and review some helpful steps in assisting anesthesiologists in getting paid by selfpay patients.
- Communication with Patients and Facilities
Communicating with patients about their financial responsibilities clearly, early and often can avoid confusion and ambiguity in a patient’s payment obligations. It also assists in quicker payment for services rendered. Communication with the patient regarding payment can, and should, begin prior to the procedure, should continue through the patient’s experience, and, whenever possible, should be in writing. During appointment reminder calls, the patient’s insurance can be confirmed and any outstanding balances with the practice can be discussed. Moreover, for patients who are not new to the facility, insurance information can be validated and updated. When an individual arrives for his/her appointment, the patient’s information should be confirmed, including his/her insurance and any outstanding balances can be paid. Finally, following the procedure, a request can be made for the patient’s credit card information so it can be billed when the charge is determined.
Unfortunately, for our anesthesia readers, this type of communication is left to the facility and the group has little to no control over patient communication prior to the patient presenting for surgery. However, the facility’s and the anesthesiologists’ interests are somewhat aligned in this regard. Facilities should be open to a discussion with their anesthesia groups about improving this process and maximizing opportunities to obtain payment from patients. Some anesthesiologists may also find it helpful to craft an anesthesia-specific informational flyer to be handed to patients upon admission. This flyer may explain to patients what to expect and whom to contact if they have questions about anesthesia coverage for their procedures.
- Incentivizing Prompt Payment
The group or the practice may find it useful to give discounts to patients for prompt payment of their balances. Often, groups or facilities find prompt pay discounts beneficial to save on the costs associated with collecting the payment from the patient. While beneficial, however, implementing a prompt pay discount must be done with caution as it may implicate the Federal Anti-Kickback Statute (AKS).
The AKS generally prohibits remuneration in exchange for the generation of healthcare business. The AKS has a safe harbor for the waiver of inpatient beneficiary coinsurance and deductible amounts (42 CFR §1001.952(k)) (Inpatient Safe Harbor). When instituting a prompt pay discount, care must be taken to ensure, among other things, that (a) the cost cannot be shifted to the Medicare or Medicaid programs, other payers, or individuals; (b) the discount must be given without regard to the reason for the patient’s admission, his/her length of stay, or diagnosis related group; and (c) the waiver may not be part of a price reduction with the third party payer.
In a favorable Advisory Opinion issued in 2008, the Office of Inspector General (OIG), analyzing a prompt pay discount arrangement by a health system for outpatient services, stated that while the arrangement did not fit squarely within a safe harbor, the health system took steps and various commitments to ensure that the discount was not a disguise for payment for referrals. In addition to following the elements of the Inpatient Safe Harbor, which, of course, did not apply directly, the OIG noted the additional steps the health system took, such as (i) not advertising the discount opportunity, (ii) only informing patients and/or their representatives of the discount during the course of the actual billing process, (iii) notifying third-party payers of the discount policy, (iv) the health system bearing the costs of the arrangement, and (v) having the amount of the discount bear a reasonable relationship to the amount of avoided collection costs. In giving its support for the arrangement, the OIG stated, “[w]e believe that these features reduce the likelihood that the Proposed Arrangement would be used as a means to draw additional patient referrals to the Health System and is consistent with the characterization of the Proposed Arrangement as a prompt payment discount implemented for the purpose of more successful bill collection.” If you are considering this type of arrangement, your group should have the proposal analyzed by a healthcare attorney to ensure compliance.
- Establishing Payment Plans
It is important that patients be given every opportunity to pay. Not only should they have multiple avenues through which to pay—cash, check, credit card, etc.—but they should be given opportunities to pay over time in the event that full immediate payment is impractical or impossible. Groups should establish payment plans with their billing companies and/or billing personnel that are reasonable and viable both for the patient and for the group.
Importantly, sometimes when payment plans are established, the payment owed by the patient reflects a lesser amount than what was originally billed. As mentioned in the previous section, offering discounts must be done with care and with regard to applicable State and Federal laws. Discounts should not be a regular occurrence and should be given only after an individual determination of the person’s ability to pay. The amount of the discount must not be shifted to payers.
- Collection Agencies
The landscape surrounding collections from patients can be tumultuous and as time progresses, the likelihood a practice will be able to collect patient payments diminishes dramatically. That being said, payment is not impossible and practices should not give up on the money they have earned. Many practices find it helpful to review their aged accounts (e.g., those accounts that are more than 90 or 120 days overdue) and select which accounts to send to a collection agency.
- Self-Pay Policies
The above may all be incorporated into a self-pay policy. Having a clear plan for how to address self-pay patients is instrumental in smooth and efficient payment. It is important for the policies to be fluid enough to apply to most all patients without an additional burden on the practice. Finally, policies should be reviewed by qualified counsel to ensure compliance with applicable laws and regulations. Payment by self-pay patients can be difficult, but practices can put steps and procedures in place to minimize administrative burden while maximizing revenue. Working in conjunction with facilities, billing personnel, and, when necessary, collection agencies, can also assist in streamlining the process.
Neda M. Ryan, Esq. is a Corporate Compliance Attorney for ABC. Ms. Ryan has experience in all areas of healthcare law, including healthcare transactional and corporate matters; health care litigation matters; providing counsel regarding compliance and reimbursement matters; and third party payer audit appeals. She can be reached at (517) 787-7432 or at Neda.Ryan@AnesthesiaLLC.com.
Christopher Ryan, Esq. is an associate at Giarmarco, Mullins & Horton, P.C. in Troy, MI. Mr. Ryan practices healthcare law, working with healthcare providers in the areas of corporate formation and dissolution, contract negotiation, and health compliance. Mr. Ryan also practices litigation with a special emphasis on defending healthcare providers faced with claims of medical malpractice. He can be reached at (248) 457-7154 or at firstname.lastname@example.org.