How often may we change the prices we charge for our services?

You may change your prices whenever conditions in your practice warrant a change and the marketplace will allow it. There is no standard as to the time that should elapse between price changes. The particular circumstances of a clinic may require price changes on a more frequent basis than the 1 year interval typical among most professional organizations.

Are we required to send our patients or insurance companies a written notice when we change our prices?

While there is nothing to preclude a chiropractor or any business person from sending a written notice of a price increase, nothing in the law requires it. There are very few examples of businesses which routinely provide advance notices of price changes. Consider your every day life. You frequently purchase food and gasoline. Can you imagine what your mailbox would look like if your grocery store routinely wrote to inform you of price changes on their products?

The only types of companies which routinely notify customers or clients in advance of price changes are those in which price is a contract component or when price and the volume of goods purchased are integral to maintaining a business relationship.

Receiving notice of an increase in price quite logically affects us all in a negative way. We forget that every business faces increases in its costs; and, unfortunately, the consumer is faced with higher prices as a result. Since many of your patients come in for care on an irregular basis a written notice of a price increase may irritate them unnecessarily.

Unless required by a managed care agreement, notifying insurance companies of price changes is unnecessary. Every time you send a claim to an insurance carrier, the data from your claim is entered into its database. They review this information themselves or submit it to an outside agency for review. They have, in effect, received notice of your price.

How can we speak with patients who are more concerned with the cost than they are with the care?

Patients who have this concern probably have very limited financial resources. For truly indigent patients, your doctor may have a policy on providing care without charge. For the rest, your response is never easy, because money is an important consideration to the patient. A suggested response would be:

“We all wish that health care was less expensive, Mrs. Baldwin. But the rules and regulations we must follow are very expensive. Dr. Smith will do everything possible to get you healed quickly so we can limit the expense.”

Our office has a policy that patients receive a discount only if they pay on the same day of service. My patients want discounts even if they make their payments late. How do we enforce this policy?

You need to explain to your patients why they receive discounts:

“Mrs. Hanson, Dr. Smith offers a discount for payment on the same day of service, because it saves us the administrative work of billing and collecting an account. The law requires us to treat all patients equally. If we were to offer discounts for everyone no matter when they made the payment on their account, we would have to give the same discount to insurance companies. That would mean the cost of your care would have to be increased.”

Can a doctor offer lower prices to a patient without insurance who pays in full on the same day of service?

Yes. A doctor may choose to offer a discount to a patient who pays on the same day of service. The policy would apply to all patients who pay on the same day of service. The doctor may also choose to extend discounts on an individual basis, as long as they do not discriminate. The discount may be on a percentage basis, or the price may be set in the actual dollar amount.

Can a doctor offer lower prices to a patient without insurance who cannot immediately pay for their services?

Yes. A doctor may make an individual arrangement with this patient. The arrangement may include extended payment terms. A patient never has to fill out a “financial hardship form” to qualify for this or any other discount.

Can a doctor offer lower prices to a patient with insurance who pays for their services immediately and files their own insurance claim?

Yes. A doctor may choose to offer a discount to a patient who pays on the same day of service. The patient may file his or her own insurance claim. Any receipt or “master bill” given to the patient must accurately list the amount actually paid by the patient. It is fraud if the patient submits a claim for more than they actually paid for the service.

Can a doctor create special pricing if all family members are treated at the same time?

Yes. A doctor may make individual payment arrangements with a patient. The fact that individuals are part of a family would not be a deterrent. A doctor may offer a “family plan” as long as the plan is available to any family and services are not prepaid (prepayments are likely to be violations of insurance law). If a patient has group health insurance, a “family plan” may not waive the patient’s responsibility to pay required co-payments or deductibles.

Can a doctor offer a plan in which the patient makes a monthly payment and an individual or a family receives unlimited chiropractic care?

Most likely, no. This has all of the appearances of a doctor who is selling his/her own insurance plans. That is only allowed if a doctor has paid the appropriate fees and has fully complied with the filing requirements of the insurance statutes.

Any chiropractor attempting to create this type of plan should not do so until they have fully complied with the licensure requirements defined by the Office of the Insurance Commissioner. Wi. Stats. 601.64 provide for significant penalties for any individual violating the insurance statutes.

Can a doctor offer a pre-payment plan in which the patient receives a discount if they pre-pay for services? This is often sold as a type of punch card?

The difficulty with this type of plan is that the doctor offering it may be required to file as an insurance company. The doctor is collecting what could be perceived as a premium and may not have the resources to provide the services requested by the patient/s on the day they are requested. In addition, there are issues as to:

• the period in which the benefits must be used
• transferability of the benefits
• refunds for unused benefits
• plan requirements (definition of care)
• unwarranted exclusions for worker’s compensation or personal injury care
• grievance procedures

Any chiropractor attempting to sell prepaid services should do so only after consulting an attorney and only if the attorney receives written approval for the plan from the Office of the Insurance Commissioner. Wi. Stats. 601.64provide for significant penalties for any individual violating the insurance statutes.

What is the proper way to give a patient a discount for paying on the day they receive their service/s?

The use of the term “cash patient” generally refers to an individual who does not have insurance coverage. The term is perfectly acceptable but more precise terms should be used when describing billing or discount policies. To use the term “cash discount” is inappropriate for the following reason. When patients make payments by means of a check, every doctor considers this to be a “cash payment”. Insurance companies pay by check. If the term “cash discount” were only used to refer to the method by which payments were made, all insurance companies would be entitled to a “cash discount” because they also pay by check.

The term that should be used is a “discount for payment on the same day of service”. Everyone, including an insurance company, who pays their bill in full on the day the services are rendered, is entitled to this discount. Since insurance companies do not pay for services on the day they are rendered, they are not entitled to this discount. The difficulty comes with patients who would like to receive these discounts but do not pay their bill on the same day of service.

A doctor who grants a patient the discount but allows them to pay for their services over time has a real risk of being accused of price discrimination. After all, the law requires all groups of payors to be treated in a similar manner. If a group of patients and a group of insurance companies both pay their bills over time, the law requires that they both receive the same price. A doctor could offer a different discount for payment on the same day of service, a smaller discount for payment with 7 days of services; and yet another for payment within 14 days of service. However, a multiple discount structure would be difficult to administer, and patients who need additional time usually need months rather than weeks to pay their bill.

Regardless of the amount of the discount it must be offered to all parties that meet the terms. Under no circumstances may a doctor waive the co-payment or deductible required of a patient. Co-payments and deductibles are requirements imposed by the insurance company as a condition of insurance, and a doctor who waives these requirements has violated two sections of the statutes Wi Stats. 943.395 and Chir. 6.02 (14).

Are there any restrictions on my right to discount the price of my services to an individual?

The discounts you may choose to offer your patients must be offered on a non-discriminatory basis. You could not, for example, offer reduced fees to a particular ethnic group or to individuals that practice a certain religion. The issue of discounts is always a sensitive one, because people who do not receive them feel as if they are somehow being cheated.

What do I say to my patients when they bring in their explanation of benefits and it states that the doctor charges more than is usual, customary or reasonable for this area?

Your job is to make patients understand a little about how insurance companies process claims to their own advantage.

“I understand your concern, Mrs. Keller, and I will do my best to explain why the insurance company would say something like this. When insurance companies decide how much they are going to pay, they do not call around the area and ask doctors what they are currently charging. Instead, they take information from the claims that doctors have submitted, and they put it into their computers. If they had information from the last month or so, that would be fair. But instead, they have information from as long as a year and a half ago. In the last year and a half a lot of our costs have gone up, and we have had to raise our prices.”

“The second thing insurance companies do, Mrs. Keller, is treat every doctor the same when they compare the fees. This is not fair. Dr. Smith is a lot more experienced and has invested a great deal in his practice. These are important factors that result in us giving you such great chiropractic care. The insurance company might not think these things are important, but we are going to do everything necessary to get you the treatment you deserve. I will be happy to call the insurance company for you and do my best to get your claim paid.”

If your office billing and collections policies state that patients are responsible for paying any balance due, you should have this conversation with patients before any services are rendered. It is better for patients to know in advance that the insurance company may not treat them fairly, than to find this out after the care has been given.

If I wait until the end of my care to bill for my services, does that insure that an insurance company will not “cut me off”?

Your billing cycle has no effect on the programs an insurance company may use to review the “necessity” of your care. Many chiropractors do not understand that individuals are not involved in the initial processing of a claim. A computer does all of the preliminary work.

• After the claim is opened it is assigned a number and photographed.
• Depending on the sophistication of the insurance company, the claim is either electronically read or the data on the claim is keypunched into a computer.
• Computer software edits the claim to insure that the patient is a policyholder and that they are entitled to the benefits that they are claiming.

Past the initial processing, the insurance company may also do additional screening based on the level of service they have sold to the employer. Every employer makes a different screening decision. Medical necessity may be challenged based on:

• the diagnosis
• the number of services for that diagnosis
• the cumulative number of services for that diagnosis by all health care providers
• the cumulative number of services by chiropractors
• the cumulative claim value for that diagnosis
• the cumulative claim value for all diagnosis in a given time period
• a treatment profile of the chiropractor

The threshold for services or claim value can be, and often are, set at zero which means that the medical necessity of the patient’s care will be challenged beginning with the first claim that is received. In virtually all of these instances, an actual review of the care has not been completed. The words “the medical necessity has not been established” are an indicator that office records must be submitted before payment will be made.

The more sophisticated review systems require the chiropractor to justify their care repetitively as they reach different review levels. Regardless of the review system used, a computer keeps track of every service that is rendered to a patient. A doctor will have to contend with the same review systems whether single days’ services are submitted for reimbursement or several months worth of claims are submitted. Delayed billing only gives the insurance company use of money that belongs to the doctor.

What do I do if an attorney signs my lien or a fee protection agreement but then gives the settlement check to the patient before paying my balance due?

If an attorney does not honor an agreement he/she signed, you have two very powerful remedies. The first is that a legal action can be brought against the attorney. Second, attorneys have an organization similar to the Chiropractic Examining Board that examines issues related to unprofessional conduct. You may send a complaint to:

Wisconsin Department of Regulation & Licensing
Board of Professional Responsibility
PO Box 8935
Madison, WI 53708

Some of our patients are constantly discussing our doctor’s prices. Can you tell us some of the factors that go into setting a doctor’s price?

Helping patients recover from their health care problems is the enjoyable part of chiropractic practice. No matter how difficult the problem of the patient, your doctor can usually find ways to help alleviate the patient’s discomfort. Diagnosing and treating a patient is often like putting together a complicated jigsaw puzzle. Your doctor has prepared for this challenge through years of education and experience.

Chiropractors have also invested in an array of technology to assist them in this process. To the patient it may seem fairly simple, the doctor examined me, treated me and I got well. But the process only seemed simple because of the intense preparation of the doctor to make the experience as pleasant as possible for the patient. The investments the doctor has made in education, technology and staff are expensive and the costs are recovered by billing patients for services they receive.

As strange as it may seem, some staff people actually feel guilty charging the patients for their care. The amount of money they have to collect at the end of the visit may seem like an enormous amount for the time the patient spent in the office. People sometimes forget what it costs for the doctor to be able to treat the patient. Here are just some of the costs:

Education
• Chiropractor’s education
• Chiropractor’s continuing education
• Staff training and continuing education

Facilities
• Building costs - lease or mortgage
• Utility expenses
• Telephone expenses
• Outside maintenance expense
• Inside cleaning services
• Property taxes

Equipment
• X-ray equipment
• Adjusting tables
• Diagnostic equipment
• Rehabilitation equipment
• Computers
• Copiers and printers and fax machines
• Office furniture and carpeting

Administrative costs
• Staff salaries
• Health insurance
• Disability and life insurance
• Payroll taxes
• Office supplies
• Malpractice insurance
• Bad debt expense
• Accounting and legal fees
• Dues for professional associations
• License fees
• Contributions to retirement plans
• Contributions to research and development

Every one of these items is important to the successful operation of a practice. If you try to eliminate any of them, the doctor may not have the tools needed to meet the needs of the patient. The expectations of the patient are high. The costs to meet those expectations can also be high. If you have a patient standing at the front desk complaining about his or her bill, this list may help the patients understand the investment that has to be made to provide excellent care.

We have patients that do not have insurance. May we offer them a discount?

You may offer anyone a discount; however, if the discount is one that is available to a broad group of patients everyone that qualifies must be offered the discount. This includes insurance companies if they qualify.

We offer a discount for patients that pay on the same day of service. Must we take back the discount if the patient delays their payment?

A discount that applies to a broad class of patients must be offered on equal terms to everyone. Your choice when patients delay their payments is to offer extended payment terms to everyone or rescind the discount if the patient no longer qualifies based on your payment terms.

We keep our prices as low as possible. Can we compensate for this by using higher level E/M or CPT codes?

There is no justification for using any CPT code improperly. A patient may never be billed for services they did not receive. This includes:

• billing for evaluation management services at a level higher than actually performed.
• billing for CMT services at a level higher than actually performed.
• billing for physical therapy services in units higher than were actually performed or for services that were not performed.
• using an x-ray code improperly to increase reimbursement
• billing any CPT code inaccurately in order to receive greater reimbursement than is actually due.

Can we give a rebate to patients that come in for wellness, preventative or maintenance care based on the amount of care they receive or the frequency of their care?

There is nothing wrong with setting up a rebate plan based on any utilization pattern as long as it is made available to all payers if they qualify. Since insurance plans do not cover wellness, preventative or maintenance care, you do not have to worry about insurance companies qualifying for this type of rebate.

I have patients that have financial hardships. Can I offer them care at reduced prices and do I need to document their financial hardships?

You are entitled to offer reduced prices to anyone on an individual basis regardless of their financial condition. However, if you offer a reduced price to a patient with insurance, the insurance company may only be billed for the amount that was actually paid by the paid by the patient. Some organizations, such as Medicare, require the documentation of financial hardships, other do not. To be on the safe side, all financial hardship should be documented.

We have patients that do not have insurance for whom paying the entire cost of care at the time of service is not possible. May we offer them an extended payment plan?

When a doctor offers a patient an extended payment plan, he/she is financing the care received by the patient. If the doctor chooses not to have a late payment fee or to charge interest, the state does not have any regulations that control the conditions under which extended payment terms may be offered.

In order to maximize the probability that the patient will pay for the care under the terms of the agreement, these steps should be followed:

• The extended payment agreement should be in writing.
• Particular emphasis should be placed on the due date of each payment.
• The patient should receive regular statements to reinforce their knowledge of their indebtedness.
• The staff should meticulously follow-up to insure the patient is complying with the terms of the agreement.
• Immediate collection action should be taken against patients that violate the terms of their agreement.

Are there any special laws we have to follow before we offer financing to our patients?

A doctor that offers financing to patients is treated no differently under the law than a department store, car company, or credit card company that offers credit to its customers. Because it is easy to take advantage of an individual, there are very specific laws that must be followed before you can charge late fees or charge interest to a patient. These laws are the Wisconsin Consumer Credit Act, the Federal Truth in Lending Act, and the Wisconsin Marital Property Law. Copies of these laws can be obtained through federal and state websites or from the WCA.

Does the state publish suggested notification language for a late charge?

Yes. The following is the notification language the state suggests for patients who are potentially responsible for a late charge.

Payment is due within 30 days of treatment or the sale of a product. A 1% per month (12% per year) late payment fee will be assessed on any unpaid balance remaining after 30 days.”

Once a late charge has been added to a patient’s account, do they have the right to take as long as they want to pay their balance?

No. A patient that is assessed a late payment charge does not have the right to defer payment on the account. State law requires you to treat the account as past due if payment is not made and not allow the patient to add more charges to the account. This means that the patient will have to pay cash at the time of service until all of the overdue charges have been paid.

It is important to remember that this is not an area over which the doctor or staff has discretion. If patients were allowed to continue to bill charges to their account, you have, in effect, created an open – ended credit account for the patient in violation of the law. If the patient were to complain, or sue you, there could be substantial penalties.

Why would a patient complain or sue us if we overlook the law and allow them to continue to add to their account even when it is past due?

While most patients are very honest, some are always looking for a way to escape their payment responsibilities. A patient that has already broken their agreement with you to pay for their care on the schedule you arranged with them has shown themselves to be less than responsible. Once they find out that a simple complaint or lawsuit may get them out of paying for their services, it might be too enticing an offer them to pass up. In effect, the state is punishing you for your goodwill or compassion.

What is the maximum amount we may add to a patient’s account as a late charge?

The maximum allowable late charge is 1% per month or 12% per year. All interest is calculated on a “simple interest” basis and is not compounded. You may use an absolute dollar amount instead of an interest rate as long as the amount imposed does not exceed 1% per month or 12% per year.

We set an interest rate below 12%. May we raise the rate?

If your initial interest rate is below 1% a month or 12% a year you may not raise the rate without having the patient sign an agreement or providing the patient with a new disclosure. If you should decide to raise your interest rate, the new rate can only be applied to future charges after the patient has been informed of the new interest rate.

What are the major differences between finance and late charges?

• A late charge is imposed on a closed end credit plan. That means that once you have added a late charge to the account a patient cannot add any new charges to their account until all of the past due charges have been paid.

• A finance charge is imposed on an open-end credit plan. You can think of an open-end credit plan to be just like your Visa or MasterCard account. A patient may continue to add charges to this type of account, even if they have been late with previous payments or have missed a payment.

• The maximum fee for late charges is 1% per month or 18% per year. There is no interest rate limitation for finance charges.

We want to begin charging our patients finance charges on past due balances. Are there any special requirements before we get started?

The state treats you just like any business that offers open-ended credit; which is another way of saying that you allow your patients to charge their services and add finance charges if their balance is not paid in full. Any business that extends open-end credit, regardless of the annual percentage rate, is required to file a registration form with the Department of Financial Institutions. The forms can be down loaded from the state’s website or, you can order them by mail. The form should be filed before any patient is assessed a finance charge. However, if you have been charging finance charges without filing the form, you should file the form as soon as possible.

In addition, if your practice has an average monthly outstanding balance of $250,000 in open credit transactions (transaction on which you are charging finance charges), you must file an annual report with the state and pay a tax based on the amount of your open credit transactions balance. If you have overlooked this responsibility, this report should be filed as soon as possible.

May finance or late charges be charged to a patient with an overdue worker’s compensation account?

No. A patient never pays for any expenses related to a worker’s compensation injury. If the worker’s compensation carrier is late making their payment, you may charge them interest at the rate of 12% per year (see the index for more information).

Does the state require us to have anything in writing before we charge interest or finance charges?

Both the state and the federal government require that you give your patients a written disclosure of all of your credit terms before you add interest or finance charges to their account. To be liable, a patient must sign an agreement regarding the terms and must be given an exact copy of the agreement. You must disclose all of the following:

1. When finance charges begin and any period (commonly known as a grace period) in which the patient may make payment to avoid a finance charge.

2. The method of determining the balance on which the finance charge will be computed.

3. The method of determining the amount of the finance charge.

4. The periodic rates, such as 1.5% per month, as well as the corresponding annual percentage rate of the finance charge (i.e., 18% APR).

5. The minimum payment required.

6. The amount of any other charges that may be imposed in addition to the finance charge.

7. Any security interest that will be taken under the agreement.

8. A notice regarding the patient’s right to dispute billing

Fortunately, the state has prepared model credit agreements that you can download from their website or can obtain by written request from the Department of Financial Institutions. Each paragraph in these model agreements is important because it conforms to a requirement under state or federal law. Please be sure to consult with your attorney if you make any changes in these model credit agreements.

We have several old personal injury cases in which we have not received any payments. May we begin to charge interest on these accounts if we have the patient sign the appropriate disclosure forms?

No. Interest or finance charges can never be charged unless the patient gives their written agreement before the services are performed. You cannot have the patient waive this right by having them sign a disclosure form after the fact.

Is there an alternative to my patients signing an open ended credit agreement?

The law allows you to have a patient sign an open-end credit agreement, an approved credit application or, a transaction that that states each person signing the receipt for services rendered on every visit will be obligated to the terms of the credit agreement.

What are the requirements for a credit application?

Each credit application must contain:

• The Annual Percentage Rate (APR)
• The possibility and effect of an increase in APR
• When the finance charge begins to accrue
• Whether an annual fee is charged and, if so, the amount
• Any other charges or fees

This information may be part of the credit application or attached to the application. In addition, all credit agreements must contain a “Marital Agreement Notice”.

What is the purpose of a “Marital Agreement Notice”?

A Marital Agreement Notice is the method the state and federal government use to make sure that both parties in a marriage have been notified that they may be responsible for the debts that are being incurred by the spouse. This means that in the event of a divorce both parties assets may be used to pay any outstanding balances. This agreement protects you against a spouse claiming that they have no payment responsibility for charges made by their partner. Your patient must provide you with their spouse’s name and address so that you can mail the notice to them. The notice must be mailed before the first payment is due. A copy of the credit agreement is sufficient notice or you may provide a cope of the model language available at the state’s website or by mail from the Department of Financial Institutions. There are penalties if you fail to mail the notice as required.

The notification requirements of the Marital Agreement Notices are exempted from the HIPAA laws. Our chiropractic assistant’s are responsible for making collection calls to patients that are past due on their account. Are there any special laws that we have to be aware of?

Anyone who makes a collection call to a patient, whether it is the doctor or a member of the staff, is considered a debt collector under the law. Here are some of the requirements of the law (the full text of the law is part of the Chiropractic Law Book available from the WCA.

• You may contact a patient in person, by mail telephone or fax. However, it can’t be at inconvenient times or places, such as before 8 a.m. or after 9 p.m.
• You may not contact a patient at work if their employer disapproves.
• You may not contact a patient if you know that the patient has retained an attorney.
• A patient may stop you from calling by saying so in writing within 30 days after the first contact.
• Once a patient tells you not to call, you can no longer do so except to tell the patient that there will be no further calls.

In addition, you may not:
• Tell anyone that the patient owes money
• Send or put anything on an envelope that identifies you as a debt collector
• Use threats of violence to harm anyone or anyone’s property or reputation
• Use any false name
• Imply that you represent the U.S. or state government
• Falsely imply that you are an attorney or represent that papers are legal forms, when they are not
• Falsely imply that the patient committed any crime
• Falsely represent that you operate or works for a credit bureau
• Falsely give credit information about the patient to anyone
• Collect any amount greater than the amount of the debt
• Deposit a postdated check before the date written
• Make the patient accept collect calls.

What can a patient do if to us if we break the debt collector’s law?

The patient has the right to sue you in a state or federal court within one year from the date the law was violated. If the patient proves that you broke the law, the patient may recover money for the damage they suffered. This can include damages for “emotional suffering”.

Where did the concept of Usual, Customary and Reasonable Payment (UCR) come from?

Usual, customary and reasonable (UCR) systems were originally created by insurance companies to control abuse by a small percentage of providers who charged fees considerably above those of other providers in the community. Over the last five to seven years, these UCR systems have taken on an entirely new meaning as insurance companies use them as a cost containment device.

The idea behind the original UCR systems was to resolve the occasional case of price abuse. The insurance industry did not want to dictate the fee structure of providers and hospitals. They knew that the pricing for services was generally fair, with the exception of a small minority of individuals. Rather than set the fees for the entire group, they merely placed an artificial limit on the upper end of the price spectrum.

Were limited to the “usual” charge for that particular service in their community. As time went on and providers rebelled against this standard, the additional terminology of “customary” and “reasonable” was added to further contain prices. But even this was not sufficient control for the insurance industry. They began to define UCR by using mathematical measurements. These formulas compare one provider’s price against a computed average of all providers in the geographic area chosen by the insurance company.

Initially, insurance companies found they could solve pricing abuse by limiting reimbursement to the 98th percentile of all charges. This means that 98 % of all charges would be paid in full and 2% of the claims would have been reduced. At the 98th percentile this was not an unbearable amount of control. As time went on, insurance companies inched the standard down to the 95th percentile, and then to the 90th percentile.

A cycle began which has only increased in intensity. The insurance industry now looks at UCR systems as a means to control costs, not just provide discipline to a small percentage of overcharging providers. Today many insurance companies hide behind statistical formulas that use aged data, improper sampling techniques, and arbitrary geographic areas. Every insurance company has a different philosophy; but they all have the same result - to control costs by trying to limit reimbursement to providers.

Since the process of reimbursement has now become somewhat adversarial, it is useful to review the office procedures which can help insure that insurance companies do not unreasonably reduce your charges.

How do we know if an insurance company collected accurate data on which it calculated its UCR payment?

Not all of the information in a data base comes from provider claims. Pricing surveys are also used, particularly by private companies, to compute average prices. Pricing surveys are useful only if they are compiled professionally and accurately. While surveys can eliminate some of the problems with aged data, it depends on the reliability of the sample itself.

The data base company does not survey all of the providers in a given community; that would be too expensive. They base their sampling on what they claim is a statistically representative group of providers. This may be true when the sample is initially prepared, but what happens over the course of time? To be accurate, all the elements of the sample should be reconfigured each time the sample is compiled.

Some companies take short cuts which affect the reliability of the data. It could be that the same respondents are relied upon to complete all surveys. Or worse yet, respondents may be chosen whose prices are well below those of other doctors in the area. If the sampling is not fair for each survey, increasingly large errors will result with a corresponding impact of the validity of the data base.

When determining UCR values, companies may develop their own relative value formulas, adjust for technology available in an area, or analyze the clinical resources of the area. All of these approaches may be valid. They are not fair unless there is complete disclosure about the standards they use to make their determinations. The potential for abuse on the part of an insurance company is enormous when hundreds of millions of dollars are at stake if an arbitrary compensation formula is used.

We do not feel the insurance company has accurately calculated it UCR payment. How can we challenge their decision?

Doctors are notified through an “explanation of benefits” (EOB) when an insurance company declines to pay a portion of a bill because it exceeds the UCR for that service in the community. Because the deduction is made from the amount which is due, the tendency of the doctor may be to accept this reduction in payment. If the charges are truly outside the UCR for the area, this may be acceptable; however, many insurance companies use a completely inaccurate means of calculating UCR.

There are several ways that a chiropractor can challenge these deductions. The first is to dispute the right of the insurance company to make the deduction. The questions that should be asked are:

1. Under what section of the patient’s insurance policy doyou have the right to reduce the price charged by the provider?

2. Does the policy state the methodology which will be used to determine the UCR price?

3. Is the doctor’s education or experience considered a valid reason for a higher unit charge?

The second area to question is the reliability of the UCR data. The questions that should be asked are:

1. Is the data charge or fee based?

2. Does it include Medicare, Medicaid, or PPO plan data?

3. How old is the data included in the sample?

4. If applicable, on what basis do they justify any data over 12 months old?

Questions should not be asked of customer service representatives. They are trained to give standard replies to questions about fees and the reductions that are made. Any questions should be directed to supervisors or their bosses until you get satisfactory answers. Because of the personal contact, telephone calls work much better than written correspondence.

It is important to point out in your conversation or correspondence that you do not have two fee schedules. You need to state that the fees you charge are your usual and customary fees for the services performed. If you feel that your fees are reasonable, there is no reason to accept a reduction in reimbursement. You have every right to collect the unpaid balance from your patient if the insurance company makes a deduction from your bill. You also retain your option to go to small claims court to obtain the full amount of your fees.

Are there any reasons we can use to justify our fees which are higher that those of other chiropractors?

You can use the following data/factors to challenge a fee reduction:

• The postgraduate education of the doctor, including diplomates earned or areas of specialization A doctor who has specialized education brings the patient a broader and more informed set of skills. This education helps the doctor reach a better understanding of the patient’s problems and deliver higher quality care.

• The doctor’s years of experience

If an insurance company tries to tell you that experience is not a valid reason to have a higher fee, ask this question. “If you had a heart attack and needed immediate surgery, would you rather have the surgeon operate who graduated last week or one with 10 years experience?

The same holds true for the chiropractic profession. The newest member of the profession may have graduated at the top of the class, but you can only gain practical knowledge through the day to day practice of chiropractic. Every case is different, and patients bring in complications the new doctor never dreamed of in school. As a doctor’s experience grows, his or her ability to understand the subtleties of a problem increases.

Exceptional costs due to the location of the practice.

The cost of operating a practice varies greatly from one chiropractor to another. One of the biggest factors is the cost of leasing office space. For practices located in downtown areas or newer office parks, the cost of leasing office space can be many times higher than that for rural areas. Even something as simple as parking can add extra expense to a practice. For the rural or small town doctor, parking is never an issue. The office either has a parking lot attached or parking is easy to find on the street. In a large city, the opposite is true. Parking for patients may have to be obtained by paying a considerable fee to the owner of a parking ramp. These costs, as well as the higher leasing costs, have to be passed along to patients.

• Special services offered in your practice.

The insurance industry rarely looks at the uniqueness of each doctor, and yet, it is that uniqueness which attracts patients to a doctor. In some cases, it may be an office dedicated to disabled patients; in another, the doctor may choose to work only with elderly patients who have special needs. If chiropractors did not meet the special needs of patients, these patients might not be able to obtain care. Any time your doctor offers patients something which is unique; it is a factor which ought to be considered by the insurance company when evaluating your fees.

• Your usual and customary fee

Some health care providers have multiple fee schedules, so an insurance company does not know if the fee being charged is the usual and customary charge of the doctor. This is not true with chiropractors. It is important to point out to the insurance company that you do not have two fee schedules. The fee you charge is your usual and customary fee for the service provided. If the insurance company makes a deduction from your bill, you have every right to collect the unpaid balance from your patient.

Insurance companies are not used to chiropractors, or their staffs, asking detailed questions about their operational standards. As you have these discussions by phone or mail, it is useful to remember that a professional attitude is much more effective than an adversarial one. You always retain your option to go to small claims court to collect the fees due to you. Give yourself the best opportunity to avoid this course of action, by proceeding professionally through each step in the fee resolution process.

If I deposit the check the doctor receives from the insurance company, are we giving up our right to fight the reduction of our charges?

Absolutely not. The insurance company would like you to believe that the case is closed once a check has been issued for your services. Cashing the check does not take away the rights you have to collect money which is owed to your doctor. You still have all of the following options:

• You can call or write the insurance company and find out if the amount due was unreasonably reduced. Each of questions you need to ask is outlined in a previous question.

• You may balance bill the patient.

• If the insurance company will not pay your full charges and you choose not to balance bill the patient, you may file an action against the patient in small claims court. To do this you will need to obtain an assignment from the patient. The process of going through small claims court is described in the chapter “Managing Accounts Receivable for the Insurance Patient.

Can we balance bill the patient for the amount the insurance company reduced our fee?

Unless you have a contract with the insurance or managed care company which prohibits balance billing, you always have the right to bill the patient for services which are not paid for by the insurance company. When the doctor agreed to provide care to the patient, he or she accepted the insurance of the patient as a courtesy. When the insurance company decides not to pay a portion of a legitimate bill, the doctor is under no obligation to waive the charges.

The battle over the payment of charges resembles a contest of wills. The insurance company wants to make you feel as if you are doing something wrong. Unless you, or the patient, stand up to the insurance, the insurance company wins. The patient, of course, feels that he or she should have nothing to do with this argument. That is not true. The insurance contract is between the patient and the insurance company. The doctor bills the insurance company as a courtesy, but the ultimate responsibility for the bill is with the patient.

To avoid having to pay the charges themselves, patients can be involved in the process. Patients have the right to ask every question your doctor asks. An insurance company which is unwilling to answer a doctor’s question may be more responsive to the patient. It is not easy for patients to address this problem, since patients are not used to asking questions about UCR. However, if patients are willing, you may be able to help them with the questions they can use to get their claims paid.

My doctor does not like to be involved in billing matters, unless it is absolutely necessary. And yet, some of the patients insist on making financial arrangements only with the doctor. Is there a way we can help our doctor avoid this situation?

If patients need to make special financial arrangements, they may be embarrassed to have to admit this to a CA. These patients may prefer to deal directly with the doctor, whom they feel they can confide in more easily. Allowing patients to confide in the doctor is one thing; making financial arrangements is another. To control these situations:

1. As part of the billing and collections policies you give to the patient, print the following on the bottom of the page:

We recognize that some of out patients experience financial difficulties from time to time. If you need to make special payment arrangements, please see . We will do everything possible to meet your needs.

If a patient does bring this subject up with the doctor, the doctor can respond by saying:

Is it more expensive to collect accounts with staff people or with the specialists from a collection agency?

It is always more expensive to use an outside agency to collect your accounts. Whether it is a collection agency or an attorney, either one will charge you more to collect an account than the costs of doing it yourself.

Just like your office, these outside sources have to pay staff people to make the calls. They must pay for office space, telephones, computers and everything else it takes to run their businesses, just as you do. The difference is that they will add a charge to cover the profit they need to keep the business operating. These costs are why the percentage they charge to collect a claim is so high. There is nothing wrong with using a collection agency or an attorney. However, if you are using them more frequently, you should review your own collection procedures. There is a good possibility that with more aggressive follow up you can eliminate the need for some of this outside help.

“Jerry, we want to do everything we can to help you. The person on my staff who handles these things for me is . As soon as we are finished, I will make sure she spends a few minutes with you discussing your needs.”

At what point in the visit is it best to speak to patients about past due bills?

As soon as you become aware of a problem, you should discuss it without delay. If a CA has the responsibility to speak with the patients about past due bills, the conversation should occur as soon as the patient arrives for their appointment. After greeting the patient, and updating their file, you would say:

“Mr. Mears, before you go back to the treatment room, we need to have you go over some administrative matters with . If you will follow me, I will take you to her office.”

Please remember that any financial problems should always be discussed in a private area of the office.

Our office has a policy that patients receive a discount only if they pay on the day of service. My patients want discounts even if they make their payments late. How do we enforce this policy?

You need to explain to your patients why they receive discounts:

“Mrs. Hanson, Dr. Smith offers a discount for payment on the same day of service, because it saves us the administrative work of billing and collecting an account. The law requires us to treat all patients equally. If we were to offer this additional discount to you, you would have to offer it to everyone and, unfortunately, that is not possible.”

If the patient “forgets” their check book or wallet, the amount due would reflect the full charge, not the discounted amount unless they were return later that day to make payment. Naturally, this will disappoint your patients. You should always be sympathetic and explain that you wish the policies could be different. After this happens the first time to a patient, they will likely bring their checkbook or wallet on their next visit.

Is it acceptable to call patients a couple of days before their payments are due to remind them of the due date?

Yes. The tendency on the part of some CA’s is to let the due date for a payment pass before making the call. Not only is the call not made on the day the payment is due, a few more days are usually allowed to elapse “just in case” the payment is in the mail.

That method is quite understandable for patients who routinely pay their bills on time. For patients who are typically late, however, a more effective means is to place the following call to the patient a couple of days before the payment is due (leaving the message on a telephone answering machine is perfectly acceptable):

“Hello, Mrs. Goodson, this is Robin Pierce at Dr. Smith’s office. This is just a reminder that your payment is due on Thursday. If you should have any problems, would you please give me a call? We can be reached at 555-1212. Thank you.”

When patients are always late with their payments, they are taking advantage of their relationship with you. Making this call helps remind them, in a nice way, that they have agreed to make a payment by a certain date. It eliminates the possibility of them “forgetting”, and also lets them know that if they have a problem they should let you know as soon as possible.

Why is it so important to call patients as soon as their accounts are past due? Isn’t everybody a few days late with their bill payments?

Is there any way to screen potential patients to determine if they are likely to pay their bills?

Every city or county has credit bureaus which will provide you with financial profiles of your patient, as long as they are not new to the area. You can also call their previous health care providers to see if they will give you financial references. Some providers will be cooperative in this area, others will not.

The best way to avoid having problems in this area is to stick very closely to your billing and collections policies. If you follow up constantly with patients and their insurance companies, you are likely to be able to solve problems while they are still small instead of watching them grow into a major financial disaster.

Not everybody is a few days late when payment is due. As a matter of fact, if you look at your patient records, you will see that most patients prefer to pay their bills as they come due. The reason you need to call patients as soon as their accounts become past due is to let them know that you take the payment of their bills very seriously.

May we question the age of the data used by an insurer to calculate UCR?

Any data base should have strict rules governing the age of the information it used. Because computers have the capacity to update the UCR data base virtually at will information should be updated at least every 6 months. It is unfair to have any pricing information over 12 months included in the data.

Remember, the intended purpose of a UCR system is to measure the reasonableness of the doctor’s current price against other providers in the area. If aged data is used, the system is comparing today’s prices against what was charged last year. Before technology could easily collect pricing information, that may have been necessary. Today, however, the practice of using excessively old data is unjustified.

As long as your conversations with patients are professional and never rude, there is no need to hesitate when making a call. It is the patient who has promised to pay you on a certain day. If that promise is broken, it becomes your responsibility to remind the patient.

Most patients are very aware of the due date of their bills. For whatever reason, they do not want to pay you and are looking for additional time. Every day you do not contact these patients gives them the opportunity to use the money, which is supposed to go to you, for something else. The faster your follow up, the less likely it is that this will happen.

Isn’t it easier and faster if I just send out a form letter to patients who have past due bills, rather than making phone calls?

Form letters will motivate a certain percentage of past due patients to pay their bills, but not all of them. The advantage of letters is that you save the time of making phone calls. The disadvantage is that a problem account will just ignore your form letter. The problem account is much more likely to pay the bill only after speaking to someone about it.

If you do choose to use form letters, you must be specific about the action you want the patient to take as in Exhibit .

Daniel Smith, D.C.
Family Chiropractic Center
1122 E. Main Street
Milwaukee, WI, 53203

May 31, 2003
William Jones
2947 Williamsburg Way
Milwaukee, WI 54819

Dear Mr. Jones:

We have reviewed your account and noticed that your payment of $75.50 was due yesterday, May 30, 2003. Unfortunately, we have not yet received that payment.

Would you please mail us a check today; or if you prefer, you may stop by our office to make your payment. If by chance your payment is already in the mail, we appreciate your help in keeping your account current.

If you should have any problem making the payment by June 10th, please give us a call. We will do everything we can to work out a solution with you.

Sincerely,
Kimberly Shaw
Accounts Receivable

Your follow up date for this letter would be June 11th. At that time another letter would not be productive. The best approach would be to follow up with a phone call. When a patient ignores your request to pay, that is a sign to accelerate your collection efforts. The more personal those efforts are, the more success you will have.

If the insurance company mails us a check for only part of the claim, are we giving up our rights to collect the balance of the claim if we cash the check?

In most cases the answer is no. You can always cash the check of an insurance company, without giving up your right to collect the balance of the claim, unless there is an endorsement agreement printed on the back of the check. That would read something like:

By endorsing this check you are agreeing to accept the face value of this check as full payment for the services rendered in connection with this claim. You agree not to bill US American Health Insurance company or its subscriber for any balance due on the account.

If this language is not acceptable to you, you would not be able to cash the check. Even if you did endorse a check with this language, you have not necessarily given up your rights to the balance of the claim. However, before you do so, it would be wise to call your attorney and ask for advice. What do I do when someone refuses to follow one of our collection procedures?

Here are the possible problems:
- The individual was not aware of the procedure.
- The person did not understand the procedure.
- He or she did not know why it was important or how it relates to other work in the office.
- The employee just does not care.

The only way to find out which of these is the cause of the problem is to professionally discuss the problem with the other staff member. You might begin by asking if he or she knew that there was a procedure for the collection activity. Whether the answer is yes or no, you then want to explain why the procedure is necessary and how it makes the office more efficient. You might also explain the problems which are caused if the procedure is not followed.

If there are disputes over some of the services patients received, should we suspend our collection activity until the disputes are resolved?

You will always have some patients who will call or write with questions after receiving their bills. They may not understand some of the procedures which were done, or they may think there are items which should not have been billed. Naturally, it is best if you can provide a quick explanation which will resolve the question.

Some problems take time to research. This is especially true if an insurance company is involved. It is not a good idea to hold up collection of the entire amount until the dispute is solved. Ask the patient to pay all of the charges which are not being disputed. When you make this offer, patients feel more comfortable knowing they do not have to pay for something they find questionable. You win as well, because you receive payment for most of the claim instead of having to wait for payment until the dispute is resolved.

At this point, you are almost certainly going to get a favorable response from the employee. After all, once people understand why something is important, they are usually only too happy to cooperate. Misunderstandings most often occur because people assume the procedure is not really necessary. Once they understand, things usually improve. In the rare case that it does not, then you should ask for a private discussion with the doctor or the office manager. He or she can stress the importance of the procedure to that employee.

Should we give a patient a copy of our price list when it is requested?

It is quite appropriate, and indeed advisable, to have your complete price list available for reference or distribution when patients inquire about it at the front desk or over the telephone. It would be unprofessional not to provide complete price information to a consumer who requests it. However, it is important to insure that the individual responsible for giving price information is fully trained in the proper method to disseminate that information.

Information should be given discreetly so as not to embarrass the inquiring individual. Individuals who have not been previously treated by the doctor should be offered complete information about what happens at every stage of treatment. Office staff should never estimate the cost of treatment without the involvement of the chiropractor.

Quite often, a question about price is followed by a specific question about the necessity of a particular x-ray, treatment or modality. Once again, if the staff is not competent to answer these questions, they should be referred to the doctor. Providing incorrect information could cause an unrealistic expectation of the patient regarding the cost of their care. If the dispute is serious, it may cause delay in payment of claims or even result in litigation.

Can a doctor offer lower prices to a patient without insurance who cannot immediately pay for their services and to whom the doctor wishes to extend a discount?

Yes. A doctor may choose to offer a discount to a patient who pays on the same day of service. If the patient does not pay on the same day of service they cannot receive this type of discount. However, a doctor may make an individual arrangement with the patient. The arrangement may include a discounted price and/or extended payment terms. A patient never has to fill out a “financial hardship form” to qualify for this or any other discount.

Can insurance companies arbitrarily pick any amount as the usual, customary and reasonable charge for a service?

It may seem from their answers that insurance companies believe they can do anything they want in this area. This is not true. Insurance companies have the obligation to process their claims fairly, or they will be in violation of the insurance laws in the state. Unfortunately, not enough patients bring complaints in this area, so state insurance agencies do not force insurance companies to disclose their procedures.

Between you and your patient, you can find out the methods the insurance company uses to calculate UCR for charges in your area. An insurance company must tell its subscribers the methodology it uses to calculate UCR. It is frustrating and time consuming work, but you will be successful if you stay with it long enough.

We would like to be competitive with other chiropractors that work for managed care companies. Can we waive a patient’s co-payment, deductible or co-insurance if we feel we need to do so to be competitive?

No. Insurance is a contract between the patient and their insurance company. One of the terms of that contract may call for the patient to pay a deductible, a co-payment or co-insurance. Chiropractors may not interfere in this contractual obligation. The use of “no out-of-pocket expense” payment arrangements may constitute insurance fraud, and may violate the standards of conduct found in Wi Admin. Code Chir 6 as well as Wi stat 943.395.

What are the potential problems in waiting until the patient has been discharged before collecting the amount due?

While a patient is still coming in for care, you have personal contact on a regular basis to collect for the doctor’s services. If the patient has a balance due when treatment is completed, your collection problem is more difficult. If the patient does not clearly understand his or her responsibilities, it is less likely that you will collect this balance.

If a patient believes that they do not have the same responsibility to pay their health care bills as they do to pay telephone or electric bills, it is because the doctor or staff has not properly educated the patient. What value can a chiropractor’s services have if payment is not expected at the time of service?

My patient has a health policy that states that the insurance company will provide legal assistance if the doctor tries to collect the part of the fee that was over the UCR standard. Does this mean we have no way to collect this money?

Insurance companies do try to intimidate you and your doctor from collecting unpaid balances by using this terminology. When you see language like this, it means that the insurance company is willing to defend its method of calculating UCR charges.

This actually can work to your advantage. If a company is willing to defend its methods, it should be willing to give you all of the information it used to calculate the value for the service in question. Once you know that their methodology is flawed you should be able to explain why you fee is justified. A company willing to defend its methods in court understands how expensive that process can be. When both the doctor and the patient are asking the same questions about a company’s procedures, the company should be willing to give you the answers without forcing you to take them to court.

May we offer a rebate to patients who do not have insurance for their acute care?

Rebate plans can be helpful in making chiropractic care affordable but you have to be careful to make sure that all of the individuals that qualify are given the rebate or discount. The fact that a patient does not have insurance cannot in itself qualify them for a discount. It is the payment terms, not the nature of the care, that is the controlling factor. If you wanted to offer a rebate to a patient with an acute condition, you would further have to qualify it by requiring payment within a certain number of days of service.

Is a doctor allowed to have more than one price list?

While in the past it may have been unusual for a doctor to have more than one price list, things have changed since the advent of managed care. If a doctor participates in Medicare, Medical Assistance and managed care they may have a number of price lists depending on the number of managed care companies with whom they do business. There is no limit on the number of price lists a doctor may have as long as they are applied on a non-discriminatory basis and within the terms required by the government agency or managed care company.

Some of our patients can only pay us when they receive their paychecks from their employers. Should we modify our payment policies to accommodate them?

When you design your collection policies, it is best to take into consideration the individual needs of your patients. For example, your procedure might call for patients to make payments every week. This might not work for patients who are paid every two weeks and have to wait for their paychecks before being able to pay you.

If they were paid every two weeks, you would ask them to pay you on the same schedule. If you try to force patients to comply with an unrealistic payment schedule, they will not be able to pay on time. They might feel so bad about this that they look for another doctor. If you find ways to meet their needs, you will receive predictable payments, and your patients will be grateful for your flexibility.

What is the potential problem when a doctor offers a “cash discount”?

Offices that offer a “cash discount” face a potential problem. If payment terms are not specified, there is the possibility that insurers could qualify for the cash discount. For example, an insurance company could argue that if a patient is allowed to keep an open balance for more than 30 days and then pays for the services with a check; they should be entitled to the same discount, since they are paying on the same terms.

To avoid this from happening, the discount offered to patients is generally based on the patient paying on the same day of service or paying within a certain number of days of service. If an insurance company can pay within those terms, they would also be entitled to the same discount. In these days where payments can be made electronically directly to a doctor’s bank account, insurers have the capability to pay much faster than they have in the past. This fact should be considered when setting payment terms.

We would like to add a late charge for patients that due not pay their bills on time. Can we add a late fee to the patient’s bill without notifying them?

It is just as important to tell a patient about your late charge as it is to tell them the price for your services.

After all, a patient that sees an unexpected late charge is likely to have a negative reaction that could cost you that individual as a patient. In addition, the law requires that you contract for all late charges. This means that patients should be given a notice or sign an agreement before a charge is incurred notifying them that payment is due by specific date and of the fee if the payment should be late.

Why should we always bill at our “list” price?

There can be a big difference between the amount charged by a doctor and the amount paid by an insurance company. Doctors may have agreements with managed care plans to discount the price of their services. If a doctor bills the discounted price of a service instead of the list price for that service, it would have a negative impact on the UCR calculation for that area.

Billing at “net prices” occurs when staff tries to simplify accounting entries. Instead of billing the list price and automatically writing off the difference to a “price discount” account, they take a short cut and bill at the lower discounted price. Taking this short cut reduces the paperwork necessary to write off the balance, but it has a very negative side effect as it artificially reduces the UCR value for the eniter area.

We give all of our patients a monthly statement with their interest charges. Does this meet the disclosure requirements of the law?

The state and federal government require you to provide patients with a statement containing specific billing information for each billing cycle. The format of the statement must meet the specification of the law. Fortunately, the state has prepared a model statement format that you can download from their website or can obtain by written request from the Department of Financial Institutions. Each paragraph in this model statement format is important because it conforms to a requirement under state or federal law. Please be sure to consult with your attorney if you make any changes in these model credit agreements.

My patient paid for their services out of their own pocket and received a discount because they paid on the same day of service. Several months later, my patient requested a copy of their claims so they could send them to the insurance company. The patient wants me to send the claims at our “list price” and not the discounted price they paid. Can I do that?

No. To do so would be insurance fraud for both you and the patient. Patients who pay out of pocket for their services may request a bill that can be submitted to their insurance company for reimbursement. The amount shown on the bill must equal the amount actually paid by the patient. Any amount shown on the bill greater than the amount paid by the patient would constitute insurance fraud.

Should we ever ask patients to bring in a payment rather then waiting for them to mail it?

As long as patients are complying with your payment terms, they should be able to make their payments in whatever way they wish, in person or by mail. The only time you need to concerned is when they begin to make their payments late.

If you phone a patient about an overdue payment, it is quite reasonable to ask that patient to drop the payment off. The reason you make this request is to give a sense of urgency to the patient. Dropping the payment at the office is not as convenient as mailing it. The patient will know you are making the request, because he or she has not kept previous promises to pay.

Are there penalties for doctors that violate the interest/finance charge laws?

Yes. Under Wisconsin law doctors are liable for actual damages, twice the amount of the finance charge up to $1000, and damages for emotional distress. In additional to these penalties, the doctor is liable for additional penalties under federal law and the patient retains the option to sue under the civil laws.

How can we speak with patients who are more concerned with cost than they are with care?

Patients who are more concerned with cost than the care they receive are likely to have limited financial resources. For truly indigent patients, your doctor may have a policy on providing care without charge. For the rest, your response is never easy, because money is very important to them. A suggested response would be:

We all wish that health care was less expensive, Mrs. Baldwin. I’m sure you are looking forward to getting rid of the pain you have been experiencing, and Dr. Smith is doing everything he or she can to get you healed as quickly as possible.