Collect Co-pays, Deductibles, and Co-insurance Every Time

Do you know how many patients leave physician practices without paying their co-pays? The number is startling, and the cost for rheumatology practices is substantial.

A good collections process requires adequate communication between physicians, patients, staff, and payers. Rheumatology practices should understand what services Medicare or a third-party payer will cover, and patients must understand the amount for which they will be responsible for services rendered.

Establish Co-pay Collection Policies and Procedures

A co-payment is the flat amount the insured is required to pay up front for medical services or medication. The deductible is an amount the insured is responsible for paying prior to receiving most medical services—other than what is applied to a patient’s co-pay. Co-insurance is the amount for which the patient is responsible after the deductible or co-payment and the carrier’s payment are applied.

To boost revenue in an office, there should be a written policy—for both staff and patients to read and understand—explaining when and how co-pays, deductibles, and co-insurance will be collected.

Some suggest that practices collect all co-pays before services are rendered—unless other arrangements are made prior to the appointment. Some practices prefer to handle co-pay collection as part of the checkout process, but it is recommended that co-pays be collected in advance of the encounter. “The best time to collect co-pays is while patients are still in the office,” says ACR reimbursement specialist, Melesia Tillman, CCP, CPC. “Once they leave, collections become more expensive and more difficult. In fact, with forms, envelopes, stamps, and staff time, the cost of collecting co-pay after the fact can be nearly as much as the amount of the co-pay itself.”

Tillman suggests that, as soon as a patient arrives at the office, a staff member should contact his or her insurance carrier to verify that the patient’s coverage is still in effect, check if the deductible has been met, and (if possible) determine what percentage is co-insurance.

“Co-pays can account for 20% of revenue in a rheumatologist’s office, and if all co-payments are not collected, this could amount to a vast revenue loss—hurting the practice’s bottom line and jeopardizing the physician contract with the carrier,” she explains.

Many contracts state that the physician must collect the co-pay from each and every patient. Physicians are bound by the Office of Inspector General laws and regulations as well as private contractual obligations to collect co-pays. Failure to collect co-pays is a violation of the False Claims Act. Providers who do not collect patient co-pays are subject to prosecution for fraudulent billing under federal law. Penalties for physicians who are found guilty of not collecting co-pays include a maximum fine of $25,000, five years in prison, or both.

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