Financial Policy? Collections? Oh my!

How naive can one Nurse Practitioner be?piggybanksm.jpg

You open your practice, you give excellent care and people are appreciative. They want to take you to dinner, they bring you fresh crab, fruit or whatever is in season. You are their new best friend.

You continue to run your business, and of course that means you eventually send out your bills after the insurance company pays you (or not). Jane and John Doe get your bill and at their next visit, they sayI talked with the insurance company, those bozos! They assured me they would take care of this. Let me call them and I’ll get back to you.  They never do get back to you unless it’s more excuses. You give them warning after warning and finally send the account to collections. They never come back. You are no longer their friend.

This scenario doesn’t just happen with commercial insurance patients. It happens with Medicare patients (they don’t always pay 20%), and others with deductibles and co-pays. I’m blessed that it’s only been a small percentage of patients.

All of us work very, very hard, and we deserve, no, we have the right to be paid for our services.

I’m still nice, I still give excellent care, but I no longer see patients who don’t pay their co-pay up front (true emergencies excluded).  In addition, if they have an outstanding balance (and they have been given ample opportunity to bring their account current) they are sent to collections and discharged from the practice. But before we get to collections and discharge, a strong financial policy may keep you and your patients on even ground.

The beauty of having you’re own business is you get to make choices. There are a few patients I do see without any payment of any kind, but I choose those folks carefully. Usually they are the ones falling through the cracks of our system or are waiting for coverage to begin. No one knows about it other than the receptionist who needs to let them in and my business partner (who occasionally does the same thing). It’s our way of also giving back.

Financial Policies

You should have your financial polices a part of your new patient registration. Have them sign, and perhaps even initial certain sections. Remember as you write these policies that you can change them! If you find they are not strong enough, or are too strict for your type of practice, change it to fit your comfort level and you tolerance.

-> Clearly state when payment is due (at time of appointment or when the bill is sent), how it is collected and in what form (cash, checks, credit cards?). If they are on Medicare, do they understand the 20% they are obligated to pay? Do they understand that even if they have a supplemental plan, they may still have out of pocket expenses?

-> Do you want to offer a payment plan for those with outstanding balances? If so what are your terms? Is there a finance charge? And what if they don’t pay it? This can be a huge problem at the beginning of the year when people have deductibles to pay.

-> How many statements do you want to send out prior to taking action? What terms and warnings will you include with those statements?

-> Who is responsible for collecting money, and how will it be collected? When they come in the door? As they leave (not recommended)?

-> How will you account for money collected? What kind of a receipt book and accounting will you do? If you are not doing the collecting yourself, how will you ensure money collected is accounted for?

-> While you are thinking of these things, also consider who will be making deposits for you (if it’s not you) and how will you ensure that it’s correct?

-> Once you make your polices, stick to it. For example, in the beginning, the person at our front desk, was willing to work with anyone. Unfortunately, we lost some money because our co-pay policy was not enforced.  This is no longer the case as co-pays are now collected when people check in for their appointment.

-> Again, realize your policies will need to be reflective of the type of patients you see. For example, my business partner sees only cash or commercial insurance patients, and rarely has a problem with co-pays or lack of payment.

While collecting money from insurance carriers can difficult, collecting money from some patients can be worse. Fortunately, it is only a small percentage of patients that are dishonest and have no intention of meeting their financial obligation to us.

(c) 2007 Barbara C. Phillips, NP

Comments 5

  1. Barbara,

    I have seen two Medicare patients, and they said they have NEVER been asked to pay 20%, and they have never heard of this pr paying a co pay. I do agree with you, Medicare customer service says this, but I also saw my dad never paid, as he had a supplemental policy, but when I worked for a retail clinic, and we accepted Medicare, the patients were never asked to pay a co pay ever. It was not in any type of policy either. So if this is the case, why do all the Medicare patients seem shocked? And why do other clinics not mention it for Medicare? Anyone with helpful information would be appreciated. Carla /Oregon

  2. Post


    Yes, I know…many patients do not seem to understand the 20% co-insurance that medicare does not cover. One thing I’ve found is not to use the term co-pay in this situation – because it really is not. I think many offices do try to collect, and others just feel it’s not worth the hassle.

    Many people expect that their co-insurance or supplemental insurance will pick up everything – unfortunately that is not the case.

    The other part that is very difficult for people to understand is their deductible. This is true not only for those on Medicare, but commercial insurance as well.

    I will say, I have people who have no supplmental insurance, and they pay their 20% without a problem. Then there are those who just don’t want to pay anything.

    The cardiology office upstairs from me has posted on their office sign the following:

    “We accept Medicare assignment. The 20% not covered by Medicare must be paid by you or your supplemental insurance.

    Thank You.

    I think I may post the same thing, only I’ll add something about the deductible as well.


  3. That is a good idea. But the 20% is of what Medicare allows correct? Not what we are billing, so we have to go by the 2007 Medicare provider coding sheets correct? For example, I dont have it off hand, but a patient may end up with an odd figure, like a 20% co insurance might be 14.74 cents..right? so at the end of the visit we would calculate that? Carla

  4. Thanks for such a great article. I am working on setting off on my own, psych np, and this is the BEST website! So much helpful info.

    At my current office, a group practice, the collections are so sloppy. Re: copays, it is my understanding that HIPPA regs state that copays MUST be paid at time of service. Otherwise, it is a violation. If anyone has more info on this HIPPA thing, let me know.

    Thanks to all.

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