One of the most frequently asked questions I've received over the past 12 years of writing for Neurology Today has been what to do about no-shows, and recently, there seems to have been an uptick in these inquiries. Despite a growing number of avenues by which to contact patients — phone, portal, email, and text — and an increased use of automated reminder systems and confirmations, some patients still don't show up for their appointments.
With expenses poised to outstrip revenues, each empty slot in our schedules translates to lost income. In fact, many neurologists are asking if efforts to remind patients about their scheduled appointments fail, can we bill for that time? And what about other services that fall outside the scope of traditional insurance-reimbursed billing codes — completing forms, after-hour routine refill requests, medical records, e-mail transactions, prior authorizations, and more?
Neurology Today asked Daniel B. Brown, Esq., a health care attorney based in Atlanta, to review legal, ethical, and health plan sources and report on the propriety of physicians charging their patients for specific types of administrative items. Brown regularly advises clients on the legal and regulatory aspects of buying, selling, and operating heath care businesses. Here, Brown discusses current ethical rules, contractual obligations under managed care contracts, and applicable state and federal laws, such as state balance billing or “hold harmless” laws.
BANKS, AIRLINES, CELL PHONE CARRIERS AND OTHER SERVICE PROVIDERS NOW CHARGE FEES FOR ADMINISTRATIVE SERVICES NOT DIRECTLY ASSOCIATED WITH THEIR LINES OF BUSINESS. CAN PHYSICIANS DO IT TOO? DO INSURANCE CONTRACTS ALLOW IT, AND IS IT LEGAL?
As a general rule, doctors are free to charge patients fees for non-medical, administrative services — as long the fees and charges aren't also payable as part of a covered service under the patient's insurance program. Even if the charges are permitted, most commercial insurance plans require doctors to tell patients that such fees aren't covered by their plans and to obtain patient consent to pay the fees when they are charged. So administrative surcharges are deemed acceptable as long as the physician is not double-charging for activities that should have been charged in association with a covered service. An example of a “double-billed” charge would be a separate surcharge to cover the doctor's malpractice liability coverage. Both Medicare and private insurance plans factor malpractice coverage into the amount they reimburse physicians for performing a covered service. As such, separate patient surcharges for malpractice coverage will almost always be an inappropriate fee.
WHAT ABOUT NO-SHOW FEES? A NEUROLOGIST FROM FLORIDA WROTE ME THAT HE THOUGHT THAT THIS VIOLATED MEDICARE RULES. IS THAT TRUE?
No. In fact, Medicare specifically permits physicians to charge Medicare beneficiaries directly for missing scheduled appointments — as long as the charges apply equally to Medicare and non-Medicare patients. Some Medicare contractors even say that doctors don't need to obtain an Advanced Beneficiary Notice from patients before charging the no-show fee.
In 2007, the Centers for Medicare and Medicaid Services (CMS) issued a formal Change Request to Medicare's Claims Processing Manual, which allows doctors to charge no-show fees directly to their Medicare patients. The Change Request explains that missed appointment fees are not part of the medical charges covered by Medicare. Rather, CMS says that these charges are for the doctor's missed business opportunities. So as long as the missed appointment policy applies equally to all patients, including both Medicare and non-Medicare, then Medicare laws and regulations permit doctors to charge Medicare patients directly for no-show fees.
For example, according to Medicare Administrative Contractor Noridian Healthcare Solutions, doctors should notify patients in writing about the charge and get the patient's signature that they accept this policy. Noridian directs doctors in Medicare Jurisdiction E to use their own waiver forms and not to file an Advanced Beneficiary Notice (ABN) form for these situations.
BUT WOULD THIS BE ETHICAL?
The American Medical Association (AMA) supports this policy from an ethical standpoint. The AMA says it has no policy directed specifically at physician surcharges. But when it comes to no-show fees, the AMA has a specific ethics code section that says that it is fine for a physician to charge patients for missed appointments or for appointments cancelled 24 hours in advance — as long as the doctor tells the patient in advance to expect a no-show charge.
When it comes to setting fees, the AMA has several policies that allow physicians the right to establish their fees at “a level which they believe fairly reflects the costs of providing a service and the value of their professional judgment.” Moreover, they support the right of physicians to establish fair and equitable fees. According to the AMA, these administrative fees, though not defined by law, may include those “charged for specific support services such as providing copies of medical records; filling out forms/writing letters for school, work, travel and other patient activities; phone calls made on the patients' behalf; emails sent to patients; no-show fees and other services.”
HOW DO BALANCE BILLING OR “HOLD HARMLESS” LAWS COME INTO PLAY WHEN IT COMES TO NO-SHOW BILLING?
Many states have adopted “Balance Billing” or “Hold Harmless” laws addressing health insurance plans. Basically, these laws prohibit doctors and other health care providers from charging their patients more than what the insurance plan pays for covered services. The question arises whether these laws, in effect prohibit doctors who participate in health plans from charging patients administrative surcharges, such as “no-show” or form fees. Generally, the answer is no. Statutory “hold harmless” clauses rarely apply to fees and charges for non-medical charges or other charges not covered by the insurance plan.
Kentucky's balance billing statute is illustrative. The statute requires that managed care plans offered in Kentucky include a “hold harmless” provision. These provisions ensure the patient that the health care provider will not “bill, charge, collect a deposit, seek compensation, remuneration, or reimbursement from, or have any recourse against the subscriber, dependent of subscriber, enrollee, or any persons acting on their behalf, for services provided in accordance with the provider agreement. This provision shall not prohibit collection of deductible amounts, copayment amounts, coinsurance amounts, and amounts for non-covered services.” Thus, state balance billing statutes permit doctors to charge patients for “no-show” or other administrative fees because the charge is not for a service covered by the patient's insurance plan.
HOW DO COMMERCIAL PAYER CONTRACTS TREAT NO-SHOW FEES?
State statutes typically permit doctors to charge health plan patients for non-covered services such as administrative fees. We have run across lots of health plan contracts as part of our practice. Many specifically address administrative fees. While contracts vary, most contain a clause allowing physicians to bill patients for services not covered by the plans. Importantly, these contracts generally require that before charging the patient, the physician should first notify the patient that he or she may be liable for such charges and then obtain the patient's written consent to be charged for the fees. So if the doctor wants to charge health participants for administrative expenses, he or she should first confirm that the specific item is not covered. If not, then the physician should provide advance written notice to the patient that the specific fee or charge may not be covered by their plan, and the patient should agree in writing to pay for such services after being so advised.
CAN DOCTORS BILL INSURANCE COMPANIES DIRECTLY FOR ADMINISTRATIVE FEES?
They can, but the charge will likely be rejected. One health insurance payer tells me that they have several providers who choose to bill the health plan for administrative fees like missed appointments. This company routinely rejects the charges because no covered medical services relates to the charge. This leaves the patient directly responsible for the fee as if the doctor had charged the patient directly.
Other insurance plans might cover certain administrative fees as long as the fee was not part of the medical service being provided. Physicians thinking about billing insurance companies for administrative fees should review their individual provider contracts to see how the company handles such charges.
CAN I CHARGE FOR THAT? Look for Part 2 of the interview with Daniel B. Brown in the next issue of Neurology Today for more discussion of the legal and regulatory questions regarding billing for medical records, prescription refills, email consultations, forms of all types, medication pre-authorization, and concierge services.
AMA: LIABILITY SURCHARGES IN PHYSICIAN OFFICES
The AMA Report 27-A-05 lists typical physician surcharges in three categories — those that are either widely accepted, sometimes accepted, or unacceptable or questionable in common practice.
Widely accepted administrative fees include charges for:
- filling out forms for school/camp/employment wellness/disability outside of an office visit;
- copies of medical records (state law may impose price limitations);
- no-shows for appointments (if equally applicable to all patients); and
- returned checks.
Sometimes acceptable administrative fees (subject to verification that there are no contractual or regulatory prohibitions) include those for:
- email consultations;
- phone consultations; and
- prescription refill requests.
Unacceptable fees that should not be charged to government health plan beneficiaries and which are of questionable validity for privately-insured patients include charges for:
- offsetting the doctor's medical malpractice premiums;
- coordinating care with other providers;
- making comprehensive assessments or planning for optimum health; and
- spending extra time spent on patient care.
Source: AMA Report 27-A-05