Those Darn Deductibles – Part 2 – The Questions You Need to have Answered, but were Afraid to Ask.

Hello! It’s me again, Susan. Your Billing Buddy!

Last time we talked about the clocks turning over to the New Year and Insurance deductibles, copays, and coinsurance starting all over again on January 1st.   If you didn’t get a chance to read it, check it out here. Those Darn Deductibles – Part 1

How to maintain your income in the New Year!

Ok, onward!  Let’s dive into more detail here in part 2 – The Questions You Need to Have Answered, but Were Afraid to Ask

In this blog, I discuss being in-network and what you can do…and can NOT do.  One question clinicians rarely ask me is:

If I’m in the network.  Am I allowed to collect my full contracted rate ahead of the claims being submitted/adjudicated, because I know there’s a deductible?

I’ve never seen this question directly addressed in a provider contract or manual. 

However, in-network contracts/manuals say the in-network provider should collect deductibles and copay/coinsurance, and no more. But these documents never specify when you can collect them. I think that’s a critical point.

So, my answer is always

“If it’s not explicitly forbidden, then it’s allowed.”

But…  🠟 You are on shaky ground here!

Well, the most obvious reason is that the client may want to wait until the claim goes through. And if the client brings it to the insurance company’s attention, even innocently (as opposed to complaining), I’ve known payers to slap some wrists. 

Here are a few common examples:

The client or their employer may have set up a Health Savings or similar fund that will pay the deductible – and sometimes that money is distributed by the insurer. No claim = no reimbursement from the fund, and the client meanwhile is being charged out of pocket.

Or, perhaps a family member had or will be having an expensive procedure or ongoing medical condition that will take care of the deductible quickly. Family members help to satisfy the family deductible and this can help your client. (Keep reading for more information on how family deductibles work).

Let’s say the client has been meeting with you for several weeks now and thinks their deductible is almost met. Then they need another, more expensive, medical procedure. But the hospital or doctor’s office verifies their benefits ahead of time and tells them nothing has been applied to the deductible. You’ve collected – but not filed. And the client calls the insurer for more information. Not to complain about you, just to get more information. And now the payer knows. 

WHOOPS

It’s all in the timing

Collecting too far ahead of filing can become a relationship and/or PR issue. 

There best way to avoid problems if you plan to collect deductible amounts before filing a claim, and it is something therapists specialize in: Communication.

I do believe it’s fine to collect at the time of service in January or whenever the client still has a significant amount to meet toward their deductible, even before filing claims.

But…take a few simple steps to protect yourself and be ethical.

1. Make the time of service collection an official part of your practice policy.
   Put it in writing for new patients to sign as part of the intake. For existing patients, tell them you are updating your policies for the New Year. 
2. Tell the client exactly how much they will owe.
   What are the contract rates for 30, 45, and 60-minute visits? Family therapy?  Given the No Surprises Act, this is a MUST to know what the cost is and make sure your client knows.  If you don’t know, find out! 
3. File the claim at the same time you collect the deductible amount.
   You’ve collected the money, so there’s no point in waiting to file.
4. If an overpayment occurs, identify it and refund PROMPTLY!
   It is ok if the client chooses to apply the overpayment forward to upcoming visits instead of a refund, but don’t assume that’s what they’ll want. Ask. Your client will appreciate being given the option. 

Most clients who have high deductibles will understand collecting at the time of service and filing claims at the same time, especially if it’s framed as your standard policy.

For new clients, be sure to notify them before the first appointment (after verifying their benefits). Explain that they have a high deductible, the cost of your service when applied to the deductible and that your policy is to collect it at the session. 

It’s better to let the client decide in advance to go somewhere else, than work for free or risk a payer complaint that might backfire on you. 

Then there are social media. It’s easy for clients to complain online. It’s not just Yelp or Google. Ever been to Healthgrades.com? Insurance payers look at what’s written there. And because of HIPAA, you should NEVER post your side of the story online. It doesn’t matter how valid your point of view is. 

License board complaints are free for clients to make – but can be costly, stressful, and time-consuming for you to defend.  Not to mention to potential effect it can have on your practice and you!

What happens if I get pushback from clients?

Here is one compromise suggestion:

After verifying that the client has a deductible with nothing applied to it, submit your first claim. Only one. Wait for the claim to come back. If it’s filed electronically and applied to the deductible, the turnaround can be as little as 3-7 days. 

Schedule the second appointment far enough ahead so that you can get a response from the insurance company beforehand. (IF CLINICALLY APPROPRIATE). 

At the time of the second appointment, bring it up. Do not expect that the client will have read their Explanation of Benefits. 

“[client name], as we discussed, you have a deductible. I filed your last session to your insurance provider and this is how they responded. The balance owed for your last session is $x, and today will most likely be $y. How would you like to pay today?”  Note: It is important to choose your words here so that they don’t assume they have the option to pay.  Make sure to use the word HOW and not CAN you pay.

If necessary, show a copy of the EOB received from insurance.

You repeat your expectation their balances must be addressed before further services can be obtained. You are modeling three things here:

1. Therapy – and your expertise – is valuable. 
2. If the client is going to be fully engaged in therapy, they must make a financial and emotional investment into the process.
3. It is not ok to let a balance build up.

Am I allowed to hold claims and hope the deductible gets met elsewhere?

Again, this is something contracts and provider manuals are silent on. There’s no official reason why you can’t, but it can be risky.

Here is why:

1. Timely filing might be as short as 90 days. Can a 4-figure deductible realistically be met by then?    Especially if other providers might be doing the same thing.
2. The client will accumulate a huge balance by the time you finally file the claims. If you collect during that period but hold the claims, you fall into the traps discussed above. And if you do not collect…THIS IS JUST NOT ACCEPTABLE!
3. What if you lose track of filing? You won’t have any grounds to appeal an untimely claim successfully. If you are in-network, then contractually you won’t be able to charge the client anything. If the insurance payer becomes aware of it, you will be ordered to refund money collected where claims were eventually filed untimely.  YES, REALLY!
4. It will require re-verification of deductible status, often repeatedly. You may not want to spend the time doing this!
   

How do family deductibles work?

Earlier, I mentioned family deductibles. People are often confused about how these work. When a claim is received for family member A and applied to A’s deductible, the same amount is also credited to the family deductible (if the plan has one).

So, if your client has a plan with both an individual and a family deductible, the rule is that whichever deductible is satisfied first, the insurance policy will then begin to pay. 

I’m so confused!!

This is complicated. You’re a therapist, not a biller!  So let me help you understand.

Here’s an example: 

Your client is the employee, “Sarah.” Her policy has a $2800 individual and a $5600 family deductible. Sounds high? Happens all the time. 

Sarah’s husband, “Frank,” has cancer and is undergoing radiation. You’d better believe those radiation treatments and the associated drugs are expensive! 

When you check Sarah’s benefits, it shows she’s met none of that $2800 deductible. But what’s not well-known is to look at the FAMILY deductible too. Maybe it shows as almost met.

How can that happen, if Sarah hasn’t had any claims this year?

No, she hasn’t…but Frank certainly has. And every claim of Frank’s that gets applied to his $2800 deductible, also gets applied to the $5600 family deductible.

Look at it another way. Frank goes to the oncologist and his bill is $500, applied to his $2800 deductible. Now he only has $2300 left to go. But that very same $500 ALSO gets applied to the family deductible of $5600. Now there’s $5100 left to go.

Since Frank will have a lot of medical bills, all those medical bills will add up, and Sarah gets credit toward her deductible as well. 

Now that’s cool.

Now, say they also have children who have to go to the pediatrician. And maybe the kids have medications to take. While not as expensive as cancer, the costs for pediatric visits and prescriptions, which apply to the kids’ deductibles, also count toward the family joint deductible. It all adds up.

Once the family as a whole unit hits that magical $5600 – however they arrive at it – then claims for ALL family members will start to pay. 

Family deductibles mean that a “One Size Fits All” policy for your practice will not always be the best route to take. There will need to be some flexibility, to consider individual circumstances.

And that requires communication with your client about the family’s financial and medical situation. 

In the example with Sarah, if you look at her benefits and only see there is a high individual deductible and collect at the visit, without communicating with her, you might be missing key information. You could end up owing her a sizable refund, and you might end up damaging the therapeutic relationship if she wasn’t prepared to pay upfront.

This is NOT to say don’t collect. What I am saying is that each client’s circumstances are unique. And the issue is timing. You wouldn’t approach therapy with every client in the same way – so when it comes to collecting from clients, the best and first tool to use is open communication when it comes to money. 

The only rule here is that COLLECTING IS MANDATORY.  It is the how and the when that is up to your discretion.

My client is having financial problems. It’s my money, can I forgive the deductible?

Ultimately, of course, you collect for the sake of your financial well-being, BUT…and this is a big but…

You can get in serious legal trouble by waiving deductibles, copayments, and coinsurance!

SAY WHAT? REALLY?

Yep.  The precedents here have been set by the federal government to protect the integrity of Medicare and Medicaid; however, commercial plans usually follow the same rules. 

There have been legal cases where providers were successfully prosecuted if it was discovered they engaged in “routine” waivers of cost-share amounts.

The government’s view is that “routine” waivers of what clients owe violate the False Claims Act AND the Anti-Kickback Statute.

Seriously!

In English, rather than Legalese, the Anti-Kickback Statute says that healthcare professionals can’t offer or receive anything of value in exchange for referrals.

This also includes anything that may induce a client to obtain a service they might otherwise choose not to get if they had to pay their deductible, copayment, or coinsurance. 

The False Claims Act says if a provider routinely waives cost-sharing, then that means the provider is overstating their actual charge on the claim form – which is a form of insurance fraud. 

How does that work?

The therapist submits a claim for $150. A claim is a legal document. You are telling the payer that $150 is your price and without insurance, this is what the patient must pay. If you are in-network, the claim gets adjusted to your contracted amount. 

Let’s say your contracted amount is $100. If you tell the client “That’s ok, just pay me $50 and we’ll call it even” then what you are doing, legally, is committing fraud. 

Because if you’re willing to accept $50, then $50 is what should be billed. Moreover, the $50 that you have forgiven, is money that the client’s policy says they have to pay in order to obtain benefits. 

If you are out of network, it’s even simpler, because you are expected to collect what you bill. It doesn’t even matter what amount the insurance company says applies to the deductible; you’re out of network and can charge what you want.*

*For now, anyway…(the No Surprises Act may change this in the future).

AS LONG AS WHAT YOU ACTUALLY INTEND TO COLLECT FROM THE CLIENT IS THE PRICE YOU INDICATE ON THE CLAIM FORM. To do otherwise is a False Claim; i.e. insurance fraud.

What if the client has a financial need? Can I offer a sliding scale?

In private practice, especially one that is contracted with insurance, using a sliding scale is a potential legal minefield. I recommend avoiding it. 

When one specific client has financial needs, it is better to not waive but to set up a payment plan, as long as the payment plan is structured such that the client doesn’t dig themselves into a financial hole.

If the need is severe enough, some waivers are acceptable, but it is better to waive only some of their responsibility than 100% of it. This is important not only for your finances but also for the therapeutic process. Clients will value therapy more if they make a financial investment in it.

Before waiving some part of a client’s financial responsibility, follow the old axiom we heard repeatedly in graduate school:

When there is no documentation, it didn’t happen.

If your client has a financial need that leads to a waiver of some of what insurance says is their responsibility, then you are required to DOCUMENT the financial hardship and the reasons for the waiver. 

The government laws cited above were not intended to prevent people from getting help. The legal precedents show, repeatedly, that every situation must be individually assessed – and documented. The documentation is how you prove that the waiver is neither “routine,” nor an “inducement.”

You do want your practice to be financially healthy…right?

Do You want to stay out of court…right?

Then you have to deal with insurance (whether in or out of network), which isn’t fun for anyone…so how do you go about finding out what your patient will owe prior to their first appointment?

That’s where Verification of Benefits comes in. And it’s a skill that takes a whole lot of practice – because insurance payers do NOT make it easy. (Even I find VoB to not be accurate more than about 80% of the time).  There are a couple of products in the Shop that can help:

A four-hour training! Part 1 on Verification of Benefits, followed by Part 2 on using insurance cards to get faster, more accurate results.

Do you just want a checklist, to make sure you’re asking all the questions that you need to ask when you call? This is the form that I use in my own billing service.   (NOTE: if you purchase the webinar above, this form is included – no need to purchase it separately!)