Wednesday, August 27, 2014

Medical Billing and a Restaurant

Medical insurance and billing is a mess. That is one thing I think most people would agree upon. The difficult thing is to find a solution that most people agree upon.

photo source: Shutterstock

Since our office has started a new financial policy that includes sending credit card information for secure storage to be used for payment of money owed, we have been encouraged by many people. They realize that businesses must have a means to collect payments owed. Many businesses use a credit card storage system. For instance, when someone books a hotel room they must have a credit card on file with the hotel. That protects the hotel in case people never show up (so the hotel can collect per their cancellation policy), if they damage the room, or otherwise build charges for which the hotel needs to collect payment. Because the hotel industry has been doing this for so long, most people don't question the practice when booking a room. There have been a few (but vocal) people who are upset by our new financial policy. I am hopeful that they can begin to see from our perspective just why this is a much needed policy.

We see most collection issues with high deductible plans but can't pick and choose which patients need to give a credit card. It must be the same policy for everyone. If you never owe money, we will never charge your card. If you owe money, you owe money. Your insurance company lets you know how much after they make their adjustments on the Explanation of Benefits (EOB). That amount is not up to us. It is per your contract with your insurance company. We will save you time in processing the bill by submitting it to your credit card if it's under the amount stated in our policy. If it's a higher amount owed, out of courtesy we will contact you to alert you to the charge. If you need to work out a payment plan, we're happy to work with you. But you still owe the money for services already rendered. It's that simple.

Where else does someone make a purchase, but only find out how much it will cost them weeks later? That is exactly what happens when someone goes to the doctor or has a lab or procedure done. You don't know the cost to you (and neither does the office) because it depends on how your insurance adjusts the bill and what portion they pay versus what they state is expected from you. It is not my system nor my office's system. It is the insurance system.

Our office does have a "menu" of codes representing common procedures, vaccines, and more with the associated charges, but it doesn't really tell people how much they will owe. This menu is in every patient room and can be given to parents if requested. The charges listed are our charges, but the amount any family will owe depends on how their insurance company adjusts and pays for things. I think it would be ideal for people to have access to a standard set of codes on their insurance company website, with a clear depiction of how much their portion will be for each code. But this would be difficult since there are so many plans, people who owe a percentage that varies based on if their deductible is met or not, etc. It varies even to the point that your employer has a different contract with your insurance company than the next employer has with the same company.

When we get the adjustment report from the insurance company and there is a portion left to be paid by the patient, it is typically already weeks after the service was provided. We then are responsible for collecting that money from the family. Many practices (including my own) are starting to hold credit card information to help with collecting payments. We simply can't afford to track down the high volume of patients that owe money. It is often small amounts, sometimes so small that it would cost more to send the bill than the amount owed. But to simply not collect small amounts from hundreds of people adds up to a business in the red.

Think of it like this: "Pay Later Restaurant" doesn't have people pay immediately after dinner. They send the bill to one of the people who enjoyed the meal. About 2 - 4 weeks later, the restaurant receives a payment, but the customer first adjusted the bill down 80% because they have a contract that states they can. But even that payment of 80% of the bill doesn't all come. Since the payment will come from multiple people at the table, only a portion of that discounted price is paid. The remaining portion of the discounted price is owed by someone else at the table. That person wants to see the bill and have it explained to them. They still take a few weeks to pay because they didn't know they were going to pay for their portion of the bill. They thought it would be covered by their dining partner. During all these weeks of trying to decide if the diner really does owe the restaurant, the restaurant still has to pay their rent, pay salaries to their employees, buy new food to sell, and otherwise pay business expenses. How can they continue to stay in business if they don't collect? Businesses in the red close. This is exactly how medical offices must operate.

We want to keep seeing patients, so we need to collect money owed us to be able to pay our bills.

In my perfect world the insurance company would pay the office the full contracted amount owed, and if the patient had a responsibility for part of that fee, the insurance company would charge the family. This keeps it clear that the money is due per the insurance contract because the bill would be to the insurance company, not the doctor's office. This helps the doctor-patient relationship continue to be about medical care, not payments. The insurance company also would have the benefit of withholding coverage if patients don't pay their bills. That encourages people to stay current on payment of their fees. When patients owe the doctor, the doctor has little to do to collect payment other than send the patient to collections and discharge them from the practice - which is really hard for physicians who want to care for people, not worry about paying bills. But we need to think of the business bottom line. If we don't collect payments, we cannot pay our bills. Then we close (or sell to large hospital systems, as many offices have done) and we can't take care of patients the way we want.

My friend, Suzanne Berman, MD, FAAP, of Plateau Pediatrics in Crossville, Tennessee, has written this list of similarities between a restaurant and medical care. It might just help clear up some of the issues we have with competition of walk in clinics, office scheduling, billing, and collecting.

1)      A meal at Hardee’s is different than a meal at the Palm, in many ways (including costs).
2)      Sometimes it’s just cheaper to eat at home.
3)      Most restaurants are a la carte.   The more you order, even if you don’t eat it all, the more you pay. 
4)      Yes, some restaurants are all-you-can-eat for one price, but drinks are still extra.
5)      Just because you had to wait for a table doesn’t entitle you to a free meal.
6)      Some places bring you chips for free.  Other places charge for chips.
7)      Plate sharing and corkage fees have legitimate reasons behind them, even if you don’t like the idea of them.
8)      Just because there are no prices posted on the menu does not mean that the chateaubriand is free.
9)      Your total does not include tax.
10)   Your total does not include tip.
11)   Liquor is always a very expensive add-on relative to the wholesale price of spirits. 
12)   Even if you don’t like how the shrimp makes your pasta taste, you’re still obliged to pay.
13)   Do you treat your own house like you treat our establishment?
14)   If you want a soufflĂ©, you need to declare that BEFORE you order your meal.  Adding on an “oh by the way” does not work with soufflĂ©s.
15)   We can help you split the bill and decide which party owes how much, but before you leave the restaurant, the bill must be paid in full by SOMEONE.

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