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When Can You Charge Patients After Insurance Denials?

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When Can You Charge Patients After Insurance Denials?

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Patient billing

It’s a common occurrence at medical practices: You submit a claim to the insurer and in return, you get a denial. You don’t want to absorb the cost of the service you’ve already provided, so your next step is to determine whether you can bill the patient directly. While patient billing may be a complex area to investigate, understanding the issue can help you collect more.

Check out a few essential considerations you should know when it comes to patient billing at your practice.

Confirm Your Practice’s Status

Whether or not you can bill a patient after an insurer denies a claim depends on a variety of factors, the first being whether you’re providing emergency care or you’re an out-of-network provider offering care at an in-network facility. These two categories are protected under the No Surprises Act, which ensures that insured patients won’t be responsible for balance bills or out-of-network cost-sharing in certain situations.

If you’re at an outpatient practice providing non-emergent care, the No Surprises Act may not be in effect for denials, but always check with a qualified healthcare attorney to make sure.

Are You In-Network With the Payer?

If you’re an in-network provider with the patient’s insurer, then your practice has agreed to accept the fee schedule amount that the payer has designated. If the insurer denies a portion of the charge because it’s over and above the fee schedule-designated amount, you cannot typically charge the overage to the patient, due to the limitations of your contract with the payer.

There may be other features in your contract that prohibit you from billing the patient directly for costs not approved by the insurer. For instance, your payer may require that certain services go through preauthorization first, before you can submit claims for them to the insurer. If you fail to go through preapproval as outlined in your contract and then the payer denies the claim, you can’t pass the costs on to the patient, since you missed a step in the billing process.

Is the Patient Covered by Medicare?

For patients on traditional Medicare (and not on Advantage plans), certain rules apply before you’re allowed to bill a patient for charges that Medicare has denied. In essence, if your practice has a reason to believe an item or service will be denied by Medicare and that item or service is not excluded from Medicare coverage, you must have the patient sign an advance beneficiary notice (ABN) before you render care. The ABN must specifically note why you think the service may be denied and how much the patient will be responsible for paying if Medicare does deny the service.

The patient can then think about whether they still want to move forward with the care, and if so, they must sign the ABN and date it. If you then get a denial for that service, you can bill the patient for the charge. If you don’t have an ABN on file, however, you won’t be able to charge the patient for the non-covered amount, unless it’s something Medicare specifically excludes from coverage (like cosmetic surgery).

Although it may seem logical that you should therefore ask every patient to sign an ABN “just in case” the payer denies a service, that’s considered noncompliant. CMS specifically prohibits practices from issuing “blanket ABNs,” so you can only have patients sign them if you have legitimate reason to believe the charge may be denied. For instance, suppose the patient’s plan only allows three steroid injections a month and the patient can’t remember if she already had three at her previous provider.

For that reason, it’s essential to confirm that a specific service is covered under a patient’s plan before you administer the care. That way, you can issue ABNs only when necessary, and you can calculate the appropriate projected charges if you foresee care being denied.

Strengthen Your Preapprovals

Knowing when you can charge patients starts with understanding exactly why you might have to charge them. This is why it’s essential that your front desk gathers a patient’s insurance information up front, then calls the insurer to authorize every service you plan to perform. During these preauthorization and preapproval calls, you’ll be able to get information about whether an upcoming service is covered or not, what the patient’s portion will be (including copays, deductibles and potential denials), and any other details. You can then share that information with the patient ahead of time so they can make an informed decision about care and the resulting costs.

Shore up Your Financial Policy

Even with the most robust preapproval process, you will probably still receive occasional denials from payers — an unfortunately side effect of doing business for most medical practices. When those denials do come in, it’s up to your revenue cycle and billing teams to evaluate which should be appealed and which can be billed to the patient. If you do plan to bill the patient, you should check back on the financial policy they signed and make sure you’ve included verbiage in it that indicates they may be billed for denied services.

If you keep a credit card on file that you bill for patient balances, also ensure that the language in your financial policy covers that as well, and confirm that the patient has signed a credit card policy to protect yourself from accusations of wrongful billing.

Creating a solid financial and credit card policy may require input from a qualified health care attorney, so reach out to one for help if you don’t have this information in your policies. By putting in the work and being proactive up front, you’ll be able to bill patients for denied services without stress.

Talking to patients about balances and financial concerns can be stressful, but help is here! Expert Sherri Lewis, CPB will share tips and strategies to help ease these talks during her 60-minute training event, Simplify Difficult Money Conversations With Patients, Boost Pay Up. Register today!

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