According to your professional liability insurance policy with OUM, all claims must be reported to OUM as soon as practical. Failure to do so puts you at risk for being denied insurance coverage should that claim or incident result in a lawsuit. OUM also  encourages the reporting of incidents that you believe may develop into a claim in the future. A patient’s request for a waiver of an outstanding balance falls within the definition of a claim. Should you receive a request from a patient for a bill write-off or if you are considering writing-off a patient’s bill, you are encouraged to contact OUM’s Claims Department for guidance. You will be advised if any additional action needs to be taken and if additional information and/or documents will be needed.

In instances of clear or questionable medical error or in instances where the patient is extremely dissatisfied with the care that was rendered, the act of writing off the patient’s bill may be seen as an act of good will and may avoid a lawsuit. However, there are no guarantees. To reduce the appearance of admitting liability following an adverse event or unexpected outcome, communicate with the patient and document that the bill is being written off as a gesture of goodwill.

In instances where the patient is unhappy over collection attempts of a bill and is demanding a write-off, you must decide whether or not you want to continue to pursue collections. Your decision may be based upon the amount of the bill and how much “hassle” you are willing to undergo and how you feel the patient will react to your decision, etc. If you feel the care and treatment you provided and the charges for the care rendered was appropriate, you have several options, including:

• Denying the patient’s request to write off the bill, and continue pursuing collections.
• Discontinuing pursuing collection attempts, but keeping the balance due on the records.
• Agreeing to write off the bill.

If you deny the request, send the patient a letter stating you have reviewed the care and treatment rendered and the charges, found it to be in order and are respectfully denying his/her request to write off the bill. If you decide to write off the bill, send the patient a letter stating you are writing the bill off as a goodwill gesture. You should be aware of federal anti-fraud, abuse and anti-kickback laws and consult your personal counsel regarding the application of these laws. Write-offs for risk management purposes should be considered on an individual basis and not offered routinely. If you decide to write off a patient’s bill, it is generally best to write off the entire bill, not just the co-payment or deductible. For Medicare, if the claim has already been billed, the provider may not write off a bill without triggering reporting obligations. If the claim has not been billed, the provider may forgive a bill and not bill Medicare without triggering reporting obligations. Practitioners should carefully avoid routine write-offs and follow the provider manuals and provisions of each private insurer.

Resources:
Video: Handling Patient Refunds the Right Way

Medicare rules state that routine write-offs of co-pays and deductibles constitute billing fraud and abuse. Private insurers often have similar rules. Thus, practitioners should carefully avoid routine write-offs. If, however, the patient has a legitimate financial hardship, Medicare (and most private insurances) will allow a write-off to occur. To protect themselves, practitioners should get documentation from the patient explaining the financial hardship in as much detail as possible. At a minimum, the patient should be asked to send a letter; if possible, tax returns, bankruptcy and foreclosure papers could also be helpful documentation.

Resources:
Video: Handling Patient Refunds the Right Way

Each office practice should have a written policy regarding billing and collection procedures, and patients should be informed of the office’s billing practices prior to the initiation of treatment. For example:

• What insurance plans do you accept?
• What is the patient’s responsibility regarding co-pays, out of pocket expenses, etc.?
• Do you take credit cards?
• When is payment expected?

Hold communications with patients regarding billing matters in a private location. Make sure the person(s) handling billing issues in your office is courteous and has the ability to help patients understand their bills.

Try to determine the reason for non-payment. Is the patient unhappy with the treatment provided? If so, see “Should I write off a patient’s bill?” above. Is the patient having financial difficulties? If so, try to work out a payment schedule. Prior to turning over a patient to a collection agency, send the patient 30, 60 and 90 day billing notices. Recognize any patient attempts to make payments.

DO NOT allow your staff to turn over a patient to a collection agency until you have had a chance to review the patient’s records and weigh the risk of malpractice litigation against the need to collect. OUM may be consulted for guidance.

If you choose to utilize a collection agency, make sure the staff is courteous, tactful and professional since the collection agency could be viewed by the patient as a part of your office. Providers should be aware that federal law prohibits certain debt collection actions and statements. Providers should utilize the services of a qualified debt collection agency or legal counsel to pursue any debts. You should approve any forms and/or letters used by the agency, and you should give written approval before the collections agency files a lawsuit against a current or former patient. Collection procedures should treat all patients consistently. Collection efforts should NOT be recorded in the patient’s record.

Resources:
Video: Handling Patient Refunds the Right Way

You need to continue to treat the patient until such time the doctor-patient relationship has ended in order to avoid or defend against allegations of abandonment. Should you decide to terminate the relationship with the patient for non-payment of bills, you should undergo a formal termination process as outlined in the “Patient Care Issues” section.

Resources:
Video: Handling Patient Refunds the Right Way

First, you need to review any contracts you have with the insurance company or organization. You will be bound to the terms of the contract. If there is no contract, or if the contract is silent on the subject of patient notification, then you should notify the patients who will be affected by your decision as soon as possible in order to give them time to find another doctor and to avoid or defend allegations of patient abandonment. It is recommended that you provide those patients with advanced notice that you will no longer be taking his/her insurance by certified mail.

A sample Loss of Insurance Coverage Letter is available on the Sample Forms page of our website. This or a similar letter should be sent via certified mail (or a notification by any other authorized means) and a copy of the correspondence should be saved to the patient’s record.

Resources:
Video: Handling Patient Refunds the Right Way

You have a responsibility to continue seeing the patient as long as a doctor-patient relationship exists. Once you are aware a patient is no longer covered by insurance, ask your staff to review your office financial policy with the patient, which should include the forms of payment you will accept. If the patient cannot abide by your financial policy, then you may choose to formally terminate your relationship with the patient.

However, exercise caution if an existing patient who no longer has insurance has a condition that warrants ongoing care and treatment. Patients who have serious conditions may “fall through the cracks” if no other provider will accept them as a patient. You might consider offering an extended payment schedule or making other payment arrangements until the patient is stabilized or over the critical period. It is recommended that you confirm with these patients that they have secured treatment with another provider, and document it in the patient’s medical record. Referrals for another provider in the area may be appropriate in certain circumstances. This should be documented in the patient's record, too.

Sample templates for a Patient Financial Responsibility Policy and a Termination of Doctor-Patient Relationship Letter are available on the Sample Forms page of our website.

Resources:
Video: Handling Patient Refunds the Right Way

Immediate recoupment is a voluntary repayment process that allows Medicare to automatically withhold future claim payments to recover overpayments instead of the provider mailing a check or going through the standard repayment process.

No. It is voluntary. Providers must elect to participate.

If elected, Medicare will automatically begin deducting the overpayment amount from future payments starting as early as day 16 after a demand letter.

A demand letter is a formal Medicare notice sent to a provider that explains:

• The total overpayment owed
• Repayment instructions
• Appeal rights and deadlines

Yes, providers must request recission through their Medicare Administrative Contractor to stop future recoupments. However, any amounts already recouped will not be refunded unless your appeal succeeds.

Contact your Medicare Administrative Contractor to verify your account setup.