QUESTION: Our practice has a problem with patients no-showing for appointments. I’ve tried several things, but I haven’t been overly successful in fixing the issue. I’d like to create a credit card no show policy in which we keep a credit card on file and charge patients a fee if they don’t show up. Is this allowed or will it get us into trouble?
Anonymous, Houston, TX
ANSWER: Charging patients a fee for no-shows or implementing a credit card no-show policy is not a decision that you should be make lightly. It can certainly reduce your no-show rate, but if done incorrectly, it can also lead to a reduction in your patient base.
Before deciding to charge patients for no-shows, try and overcome the reasons that might be contributing to them missing their appointments. Do patients have trouble finding your practice due to it being in a metropolitan area, on a large medical campus or hard to park area? If so, consider maps and verbal scheduling instructions that patients should expect reaching you to take longer than anticipated. Do you have a large number of patients who travel far distances to reach your office or have ambulatory challenges? These patients may no show on inclement days that make travel more difficult.
Legally, you can keep a credit card on file to charge just in case of a no show, as long as you inform your patients, and they sign a document acknowledging and authorizing how their card will be used. However, before doing so, you should carefully consider the negative impact on patient satisfaction and retention. This can be compounded if your practice is in a highly competitive market. However, if you have a strong patient based, in less of a competitive market, you may experience less risk in implementing no-show fees.
Consider No Show Credit Card Friendlier Alternatives
Before implementing a missed appointment fee, there are some other options that might work better and not lead to lost patients, for example:
- Rather than automatically charging your patient’s credit card for a no-show, implement a self-pay fee that you collect the next time they come in. The financial result is the same, but the patient won’t be surprised by the charge.
- Instead of hitting a patient with a no-show fee on their first offense, consider giving a grace period. This can be implemented based on the number of no-shows total or within a time period. For example, after two no shows without a call or after two no shows within a year, you will charge a no-show fee of $10-$50.
Whatever method you choose to reduce your no-shows, the most important variable is communication with your patients. You should implement a formal no-show policy in writing, and provide this to all patients to review and sign (see sample verbiage below). You should train your front desk staff on how to clearly explain how the policy works and why it is being implemented. Also, to ensure patients know about the policy, put your policy in a frame at your front desk clearly spelling out the consequences for missed appointments.
Remember, the goal of reducing no-shows is to improve revenue. If you implement a no-show policy poorly and end up losing patients, you’ll end up worse off.
Provide No Show Credit Card Authorization Written Policy
Sample policy verbiage could be:
No Show Policy/Credit Card Authorization Agreement
I understand that I must cancel appointments within 24 hours before the scheduled appointment time. If I fail to notify the office with an answered phone call before that time, I agree that you will charge my credit card listed below $25 as a no-show/no-cancel fee.
In the event, I do not show and cancel an appointment accordingly, I hereby authorize you to charge my credit card [number of credit card, name on credit card, expiration date of credit card, security code].
Have the front desk verbally explain the policy and ask for a verbal agreement from the patient. The front desk receptionist can confirm with the patient, “Do you understand that you must cancel appointments within 24 hours before your scheduled appointment and if you fail to reach us by phone, you agree that we can charge your credit card on file the stated fee?”
Remind patients of the no show policy in your email appointment reminders, as a Website FAQ, on your patient portal, and in your policy office signage. Many practices include with appointment schedule cards and reminder e-mails a brief statement such as, “Please remember to cancel your appointment by phone within 24 hours prior to your scheduled visit. You have agreed that failure to do so will result in your credit card on file being charged a no-show fee of $25.”
Do not charge the no show fee to insurance. This is a patient self-pay charge and you should set up a dummy miscellaneous code to record the transaction in your practice management and billing systems.
Holding a credit card in your system requires a third-party vendor. Contact your credit card processing company for information. The credit card info should be stored in a secure system for PCI compliance.
What else can you do to better manage patient no-shows, reduce your legal risk and avoid massive revenue losses? That’s where nationally-recognized healthcare compliance attorney, Jennifer Searfoss, Esq, CPOM, CHCI, CMCS, can help. During her upcoming live online rebroadcast on Tuesday, October 29th at 1pm ET, Jennifer will provide you with step-by-step answers to this costly, lawsuit-ridden issue.
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